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Individual investor and trader.Endurance athlete, avid cyclist, swimmer, runner, and triathlete. #fintwit #macro #oldwallwarrior #5Real Not investment advice

Mar 27, 2022, 21 tweets

๐Ÿปโ™‰๏ธโ†—๏ธโ†˜๏ธโ†”๏ธโš ๏ธ๐Ÿšฉ๐Ÿ”บ๐Ÿ”ป๐Ÿงฎ

Global Macro Review 03/27/22

1/8

Nothing but #Quad3 #stagflation
as far as the ๐Ÿ‘โ€๐Ÿ—จ can ๐Ÿ‘€

Commodities โ†—๏ธ

Yields โ†—๏ธ

Equities โ†—๏ธ

Letโ€™s dig into the ๐Ÿงฎ!

2/8

The ๐Ÿ”‘ 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 ๐Ÿ”

2a/8

Hydrocarbons put in another shift this week ๐Ÿš€
(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) ๐Ÿ†• 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 ๐Ÿ˜„ I see?

2d/8

Metals were more of a โ†”๏ธ ๐Ÿ’ผ 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 ๐Ÿš€ in rates and the effect on housing.

Chart: $LUMBER -17.05% (t), -16.5% (T)

3/8

10Y treasury yields around ๐ŸŒ ๐Ÿ’ฅ โ†—๏ธ

This is not normally indicative of growth slowingโ€ฆ but it could just be the markets doing CBs jobs as investors demand +yield given sticky #inflation

Chart: UST 10Y 2.48% ๐Ÿ‡บ๐Ÿ‡ธ

3a/8

Chart: DET 10Y .59% ๐Ÿ‡ฉ๐Ÿ‡ช

3b/11

Chart: JPT10Y 0.23% ๐Ÿ‡ฏ๐Ÿ‡ต

3c/8

UST volatility remains ๐Ÿ›—

Chart: MOVE 125.27 ๐Ÿ˜ฑ

3d/8

The belly of the curve is threatening the long-end with #inversion raising the specter ๐Ÿ‘€ of #recession 12-18 months hence

5Y 2.561% +41.5 BPS this week alone ๐Ÿ˜ฎ
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 ๐Ÿ’ฅ

$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 โ€ฆ ๐Ÿ‡บ๐Ÿ‡ธ

$SPX +1.8% (w) - 3.85% (T)
$COMPQ +2.0% (w) - 9.5% (T)
$IWM +1.4% (w) - 7.15% (T)

โ€ฆ 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 ๐Ÿป (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 ๐Ÿ’ฐ 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! ๐Ÿฉณ

Chart: A #quad4 long, $XHB ๐Ÿ  -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

Internatโ€™l indices more of a โ†”๏ธ ๐Ÿ’ผ

$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 ๐Ÿ‡ฏ๐Ÿ‡ต - the best performing index over (t) duration +6.32%

6a/8

Resource rich countries getting you ๐Ÿ’ฐ

$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 ๐Ÿ‡ฒ๐Ÿ‡ฝ Jarabe Tapatio ๐Ÿ’ƒ๐Ÿฝ +7.0% (t) โ™‰๏ธ

7/8

In #FX, the ๐Ÿ’ด continues to get ๐Ÿ”ฅ

$FXY -2.4% (w) -6.35% (T) ๐Ÿป
$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 ๐Ÿฆ˜๐Ÿฆ˜โ™‰๏ธ

8/8

Bond market vigilantes doing #CB work, but yields not โ†—๏ธ enough to attract ๐Ÿ’ฐ from $SPX or $CRB

Quarterly #opex on 3/31 + โ€˜month-end markupโ€™ + systematic rebalancing = possible ๐ŸŒŠ

Stick with ๐Ÿ“ˆ and have a super profitable ๐Ÿ’ฐ week!

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