๐ปโ๏ธโ๏ธโ๏ธโ๏ธโ ๏ธ๐ฉ๐บ๐ป๐งฎ
Global Macro Review 03/27/22
1/8
Nothing but #Quad3 #stagflation
as far as the ๐โ๐จ can ๐
Commodities โ๏ธ
Yields โ๏ธ
Equities โ๏ธ
Letโs dig into the ๐งฎ!
2/8
The ๐ to โ๏ธ prices is โ๏ธ prices?
Chart: The $CRB closed at a new cycle high 307.33 +5.16% and is now within striking distance of the June 2014 ๐
2a/8
Hydrocarbons put in another shift this week ๐
(w) = week (T) = Trend = 3 months
$BRENT +8.75% (w) +53.05% (T)
$GASO +7.15% (w) +56.35% (T)
$NATGAS + 15.45% (w) +54.55% (T) โฌ
๏ธ
$WTIC +10.5% (W) +54.35% (T)
Chart: Uncle Joe is going to bottle up Natty and sell it to the EU
2b/8
Grains were also โ๏ธ on the week
$CORN +1.65% (w) +24.45% (T)
$SOYB +2.55% (w) +27.5% (T)
$SUGAR +3.6% (w) +2.14% (T) ๐ โ๏ธ
$WHEAT +4.55% (w) +34.1% (T)
Chart: $SUGAR +9.0% over (t) = trade duration = 1 month and now โ๏ธ Trend
2c/8
But not everything is โ๏ธ in the ag space
I will take my โ๏ธ black, please
Chart: $COFFEE +0.9% (w), -7.1% (t), -3.95% (T), but is that a ๐ I see?
2d/8
Metals were more of a โ๏ธ ๐ผ this week
$PLAT -2.65% (w) +3.45% (T)
$COPPER -0.85% (w) +7.05% (T)
$GOLD +1.3% (w) +7.85% (T)
$SILVER +2.07% (w) +11.65% (T)
Chart: $DBB +5.8% (w) industrial metals remain bid โ๏ธ +17.25% (T) but on weakening volume
2e/8
And, of course, we have to mention $LUMBER which has broken bad - not surprising given the ๐ in rates and the effect on housing.
Chart: $LUMBER -17.05% (t), -16.5% (T)
3/8
10Y treasury yields around ๐ ๐ฅ โ๏ธ
This is not normally indicative of growth slowingโฆ but it could just be the markets doing CBs jobs as investors demand +yield given sticky #inflation
Chart: UST 10Y 2.48% ๐บ๐ธ
3a/8
Chart: DET 10Y .59% ๐ฉ๐ช
3b/11
Chart: JPT10Y 0.23% ๐ฏ๐ต
3c/8
UST volatility remains ๐
Chart: MOVE 125.27 ๐ฑ
3d/8
The belly of the curve is threatening the long-end with #inversion raising the specter ๐ of #recession 12-18 months hence
5Y 2.561% +41.5 BPS this week alone ๐ฎ
30Y 2.602% +18.1 BPS
Chart: 30/5s 4.1 BPS dropped 23.5 BPS this week, a massive move โ๏ธ
4/8
Bond ETFs and 60/40 portfolios have been ๐ฅ
$TLT -3.6% (w) -13.35% (T)
$IEF -2.75% (w) -8.0% (T)
$LQD -2.1% (w) -10.1% (T)
$HYG -1.45% (w) -6.7% (T)
$BNDD -0.65% (w) - 4.63% (T)
$CWB +0.75% (w) -8.1% (T) โฌ
๏ธ
Chart: $LQD -4.45% this month alone
5/8
Turning to equities โฆ ๐บ๐ธ
$SPX +1.8% (w) - 3.85% (T)
$COMPQ +2.0% (w) - 9.5% (T)
$IWM +1.4% (w) - 7.15% (T)
โฆ as vol โ๏ธ
$VIX 20.81 -3.06 pts
$VXN 27.34 -0.42 pts
$RVX 26.77 -3.0 pts
Chart: $COMPQ +3.45% (t), but still ๐ป (T)
5a/8
US Sectors
Alpha generators
$XLE +6.6% (w) + 43.45% (T)
$XLB +3.7% (w) +1.1% (T)
$XLU +2.8% (w) +5.9% (T)
Hurting returns long side
$XLV -0.55% (w) - 2.2% (T)
$XLRE -0.2% (w) - 5.6% (T)
$XLY +0.8% (w) - 9.75% (T)
Chart: $XLU +7.7% (t) is getting you ๐ฐ this month
5b/8
Get some!
Chart: $SPYV +1.3% - large cap value has flipped to โ๏ธ (t) +2.55% and (T) +1.45%.
5c/8
Short some! ๐ฉณ
Chart: A #quad4 long, $XHB ๐ -8.8% (w) -5.35% (t) -6.4% (T) is getting decimated by โ๏ธ mortgage rates with 30-year fixed at 4.54%
6/8
Internatโl indices more of a โ๏ธ ๐ผ
$NIKK +4.95% (w) - 2.2% (T)
$KOSPI +0.85% (w) - 8.95% (T)
$HSI -0.05% (w) - 7.7% (T)
$DAX -0.75% (w) - 9.2% (T)
$CAC -1.0% (w) - 7.75% (T)
$SSEC -1.2% (w) - 11.85% (T)
Chart: $NIKK ๐ฏ๐ต - the best performing index over (t) duration +6.32%
6a/8
Resource rich countries getting you ๐ฐ
$EWZ +8.75% (w) +35.8% (T)
$EWA +3.15% (w) +6.0% (T)
$EWC +2.05% (w) +6.95% (T)
$EWW +1.9% (w) +7.75% (T)
Chart: $EWW ๐ฒ๐ฝ Jarabe Tapatio ๐๐ฝ +7.0% (t) โ๏ธ
7/8
In #FX, the ๐ด continues to get ๐ฅ
$FXY -2.4% (w) -6.35% (T) ๐ป
$FXE -0.65% (w) -3.35% (T)
$FXB +0.02% (w) -1.8% (T)
$FXF +0.15% (w) -1.6% (T)
$UUP +0.6% (w) +2.65% (T)
$FXC +1.0% (w) + 2.65% (T)
$FXA +1.47% (w) +3.68% (T) โ๏ธ
Chart: $FXA +3.97% over (t) duration ๐ฆ๐ฆโ๏ธ
8/8
Bond market vigilantes doing #CB work, but yields not โ๏ธ enough to attract ๐ฐ from $SPX or $CRB
Quarterly #opex on 3/31 + โmonth-end markupโ + systematic rebalancing = possible ๐
Stick with ๐ and have a super profitable ๐ฐ week!
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