Thread by @tdarling1

Weekly Global Macro Review 10/07/21

1/15

@hedgeye calls it #Quad2 reflation, but I rather prefer @jam_croissant’s colorful description of “endless gamma squeezes” oh so reminiscent of 🎉🍾🥳 like it’s 1999!

Let’s dig into the macro 🧮 for the week

2/15

A 🕊 #FOMC on Wednesday and a 💪🏼 #NFP report on Friday with underlying wage #inflation of 4.9% y/y was enough to ignite a rally in the $UST market ↗️

WTF, you say?

3/15

Indeed, the MOVE 66.30 ↘️ from 78.34 on Tuesday as the 10/2s curve remained 🥞 at 105

2Y .405 -9.6 bps
5Y 1.056 -12.9 bps
10Y 1.455 -10.6 bps
30Y 1.888 -5.1 bps

Chart: Despite a strong #NFP, the $TNX ↘️ -10.6 BPS to 1.455 and at critical support

4/15

Bond ETFs rallied ↗️ led by convertibles and long duration with dividends paid on Friday

$CWB +1.37%
$TLT +1.22%
$LQD +1.21%
$BNDX +1.04%
$IEF +1.01%
$HYG +0.98%
$TIP +0.97%
$BND +0.7%
$IVOL +0.62%

Chart: With this move, $TLT is now ♉️ (t) +5.23% and (T) +1.15% but ⛅️

5/15

This move ↗️ in the bond market begs the question of whether #inflation has peaked 🔝?

Chart: $CRB -1.13% after hitting a cycle 🏔 the previous week

5a/15

Chart: $INFL -0.57% also 🏔 last week and ↘️ this week

6/15

Indeed, hydrocarbons 🛢⛽️ came under pressure ↘️ , even as OPEC+ refused JB’s request

$WTIC 81.27 -2.75% with $OVX 37.84
$BRENT 82.55 -2.17%
$GASO 2.32 -2.11%
$NATGAS 5.52 +1.66% 🔺

Chart: $WTIC remains ♉️ (t) +2.42% and (T) +19.02% BUT momentum 🎢 is rolling over

7/15

Grains were ↔️ on the week with the big 3 ↘️

$WHEAT 676 -0.68%
$CORN 553 -2.68%
$SOYB 1204 -3.63%
$SUGAR 19.90 +3.27% 🔺

☕️ 204 -0.2%

Chart: $CORN flipped to neutral (T) -0.63% but remains ♉️ (t) +4.24%

8/15

While $COPPER was ↘️, precious metals traded ↘️

$COPPER 4.34 -0.69%
$SILVER 24.16 +0.88% with $VXSLV 29.84 🔺
$PLAT 1036 +1.48% ♉️
$GOLD 1817 +1.84% with $GVZ 16.64 🔺

Chart: $GOLD is now ♉️ (t) +3.38% and (T) +3.05%. Do with that as you may ⛅️

9/15

With SPX Q321 company sales +18.85% and earnings +41.8% per @hedgeye, domestic equities 🚀 to new ATHs with small caps leading

$IWM 242 +6.03%
$COMPQ 15972 +3.05%
$SPX 4698 +2.0%

Chart: $IWM broke from a multi-month trading range with room to 🏃🏿‍♀️

10/15

Top US Sectors
$XLY +5.03%
$XLK +3.44%
$XLB +3.17%
$XLP +2.46%

Underperformers
$XLV -0.72%
$XLF -0.6%
$XLU +0.46%

Chart: $XLY ♉️ is +15.7% over (t) duration and +16.71% over past 3 months 🍋 #squeeze #parabola

10a/15

Chart: Retail 🏪 busted a move this week with the $XRT +7.85%

10b/15

Dark pool players ♥️♠️♦️♣️ bought the $FOMC with $DIX ↗️ to 47 but took 💰 on Friday, per @SqueezeMetrics 🍋

Chart link to $DIX: squeezemetrics.com/monitor/dix

11/15

Major international indices ↔️ with 🇫🇷↗️ and 🇭🇰↘️

$CAC 7041 +3.08%
$NIKK +2.49%
$DAX 16054 +2.33%
$KOSPI 2969 -0.05%
$SSEC 3492 -1.57%
$HSI 24870 -2.0%

Chart: $NIKK flipped to ♉️ (t) +5.57% and (T) +6.44%

12/15

Strongest internat’l ETFs

$EWJ +2.87%
$EWQ +2.77%
$EWW +2.73%
$EWI +2.69%

Weakest
$FXI -2.45%
$IDX -1.66%
$EDEN -0.58%

13/15

Little change to the $USD on the surface of things, but ↗️ sharply vs. 🇦🇺 and 🇬🇧

$USD 94.207 +0.09%
$JPY 0.882 +0.52%
$CHF 1.096 +0.34%
$EUR 1.157 +0.07%
$CAD 0.803 -0.61%
$GBP 1.35 -1.4%
$AUD 0.74 -1.58%

Chart: A 🕊 BOE led to a steep ↘️ in the $GBP 🐻

14/15

New buy signals:
EWJ, EWW, INDA, EWD, XRT, XME, XLP, GLD, TLT

New sell signals
DBB, FXI

15/15

Despite a #FOMC threat to take the 👊🥣 away, equity investors 🎉🍾🥳 like it’s 1999.

Bond investors sniffed an #inflation 🔝 and joined the 🎉🍾🥳

Some #MeanReversion expected this week - especially since the $DIX took 🤑 off the 🍽

Have a super profitable 💰 week!

Addendum

I do this work for myself but share it with #fintwit.

If you find value in it, please ♥️ and retweet.

After all, I’m a 🐒 like everyone else!