BBG - That's a headline ! : the average of all U.S. bonds are trading at 86 cents to the $ (including all USTs, corps bonds, mortgages and al) >>> Hedge Funds continue to short treasuries at historic levels while asset managers are building their largest long positions ever recorded! (have charts if you need them)
Nearly 700 US banks now exceed the 2006 Commercial Real Estate (CRE) loan concentration guidance/Thread
OpenAI is reportedly raising funds at a valuation of $80 billion to $90 billion
Pressure on China Evergrande intensifies; chairman under police watch, risk of liquidation
FTC calls Amazon a monopolist in massive antitrust case (...which could last years?)
A top European Union official says the social network X, formerly known as Twitter, is the biggest source of fake news and urged owner Elon Musk to comply with the bloc’s laws aimed at combating disinformation
More Japanese companies are moving their production facilities from China to Japan, fearing further disruptions from the novel coronavirus pandemic as well as the increasing friction between Washington and Beijing
The Senate voted to advance a short-term funding bill Tuesday to avoid government shutdown
The 10y UST bond is down about 3% YTD, this would represent the 3rd consecutive annual decline, which has basically never happened (down 4% in 2021 and 18% in 2022)
Fed's Kashkari revealed his interest rate "dot" from the latest SEP : one more hike this year, and only one cut next year under his modal outlook for the economy
MS’s Mike Wilson calls this economy “purgatory land.” “This is the most difficult part of the economic cycle. What you can argue is the late-cycle can persist for a lot longer than people have expected.”
Markets :
Investors have to 'adjust' to Treasury yield curve at higher levels than anticipated few weeks back, pre FOMC >>> makes me think of 2010-12period, when the market was constantly asking, wondering when ZIRP, NIROP and QE would stop...it took a decade.....now we are going to wonder for a decade whether rates go down and how far ? >>> so all in all, there is no doubt that higher rates are biting hard on consumers and various businesses, more downside risk than upside risk overall
USD stays bid, if it was to really rally hard on further risk-off, beware the likes of MXN (posiitoning..), CNH, EMG, AUD, even CAD
For equity markets : a higher for longer period of rates in this 'late cycle', means a continuation of 'quality investments, balance-sheets' remain a preference vs 'growth at any costs' kind of company
Markets continue to allocate funds to government bonds, TLT etc hoping for a return to a disinflationary environment, IMHO, we could very well go back to a world that needs 1 to 2% real rates, so on 3% US inflation (as an example), the markets will require more of a 5% yield in 10y UST than a 3% yield, particularly with the fiscal situation that is not going to improve in a hurry..
If ever 'investors' need to cash in' on the big winners of 2023, a quick reminder that they are still up big YTD: (not saying it will happen, just pointing out where profits 'may' be taken, as the divergence between TLT and QQQ is pretty extreme, and could well matter/correct in the intermediate term)
NVDA +180%
NFLX +30%
AMZN + 50%
META + 150%
AAPL + 32%
MSFT + 30%
Pressure on China Evergrande intensifies; chairman under police watch, risk of liquidation | Reuters
Outlook for Public and Private Markets - Apollo Academy 'ten downside risks to the U.S economy' - many well documented lately already, but imho not entirely priced in, lag reaction in markets from higher rates ...
$75mio..
Seems bang on
SPX - while sub 4350 area, we should be heading towards 200dma which is around 4200 area, once/when trendline supports gives way on weekly chart - with quarter-end flows and ODTE things can happen pretty swiftly
