Thread by @MacroTechnicals

MT GLOBAL MARKETS Momentum & Sentiment weekly 22May20 wk21/22 thread 1/n

• another overall RiskON wk21 with global stocks up, EM firm, credit spreads tighter, vola down

• China/HK + China/US tension clearly getting headline momentum and intense "War of Words"

• US/UK NIRP ?

2/n last week performance table

• green RiskON board

• China/Hongkong headlines led to capital outflow = underperformance

• Energy sector outperforming

• commodity-driven FX shining

3/n housekeeping : global markets YTD as of wk21

4/n and one more housekeeping: global markets MOMENTUM / TREND / EXHAUSTION wk21

5/n as we all read in the media: China is not able to give detailed economic growth guidelines (err, it's not +6.5% template anymore)...

what's also interesting, EVERYONE wears facemask and NOBODY is social distancing. pfffff

6/n screenshot from this morning.. . but this is relevant: as CV19 fades away, China pushes once again to get more control of HK (special status as we all know) = protests again... on top of other "war of words" towards the US, delisting Chinese stocks, trade war = Cold War 2.0

7/n a re-escalation between China/US would add uncertainty to the unknown shape of re-opening with the world is trying to ease lockdown.

It's also important to remind ourselves, not every index = stock market, and stock market sometimes are not the economy.

uncertainty = box

8/n this chart is also a good representation of how a few stocks ( #WFH future ) leading or diverging from overall sectors like financials or discretionary.

Energy sector one of the best performers since FED floor, but still one of the worst performer Y/Y or YTD

9/n while all major CDX & ITraxx indices traded tighter last wk,they also remain way off from pre-CV19. In other words, this uncertainty about further defaults going forward hasn't changed a lot.

For getting really bullish on stocks, these protection levels should be much lower

10/n for the US market, this is basically it :

CV19 shutdown, sell-off, FED stepped in as well as fiscal pot-hole rescue as they saw what the real economy will look like for the time being.

QQE “unlimited” the main reason for the bounce,but uncertainty for recovery remains

11/n just an update for my crimechart, initial jobless further slowing "as expected", but the real question is, how many will get re-hired with more re-opening taking place. = consumer confidence = spending = growth recovery

12/n infographic "America’s cautious comeback"

graphics.reuters.com/HEALTH-CORONAV…

13/n albeit the usual "leading" indicators are lagging now given the unprecedented CV19 shutdown reaction, what macro players still want to see:

is this the bottom ?

next week US manufacturing regional surveys chart

14/n ...and here next week US regional SERVICES surveys.

slowly, they all should turn up within the next prints.

15/n next week will also see reports of some global consumer confidence surveys:

hopefully, they also turn UP

16/n next week's European ESI Economic Sentiment report forecast vs long term history chart

was this the bottom already ?

17/n next week's major European business surveys all expected to go better

- Germany's IFO
- France INSEE
- Belgium NBB

all part of ESI

18/n ...because based on the mini cycle forwards, we could be close to a rebound.

Obviously, CV19 and the global shutdown reaction was very severe and unprecedented.

chart: business surveys 2Y/2Y vs 10Y yields 2Y/2Y 18M shifted (inv scale).

19/n update (and slightly amended to make it a little more user-friendly):

not sure if the historic overlay can be used anymore with FED stepping in early and hard, but we could have a temporary calmer season, before a next big wave of uncertainty is ahead (election?HK?China?)

20/n as everyone is aware of the "Tuesday effect", let's see if this statistics keeps rolling. CV19 in UK

21/n bit more of housekeeping : will probably switch to weekly as the table gets too stretched now, but again to highlight the inventory destruction of USO ETP with the roll exercise.

now, as the CL curve changed from steep contango to near flat, what to say ? LMAO

22/n one more “food for thought” : borrowed this, has anyone read it ?

23/n and this is how our UBER looked like in CV19 (yesterday). felt like being in a bad movie

24/n enough already...

time to get ready for this:

Tiger Woods and Peyton Manning team up to face Phil Mickelson and Tom Brady at Medalist Golf Club in The Match: Champions for Charity

25/end

HAPPY SUNDAY

Monday :
UK BANK HOLIDAY
US MEMORIAL DAY

c ya later

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