Big-Tech Best, Bitcoin Battered As Event-Risk-Ridden Week Looms

TME daily: chasing fa(i)t

The real AI

Unstoppable LLY and NVO continue marching higher. Zoom out and you see just how big of a laggard NYFANG is.

Source: Refinitiv

Fat over AI

Two year chart showing LLY well ahead of “hot” NVDA…and NVO practically “there”. Leather jackets falling out of fashion lately…

Source: Refinitiv

Never underestimate surprises

Citi US economic surprises have moved higher recently, leaving the SPX behind. Watch this gap closely, especially post the latest reduction in risk.

Source: Refinitiv

They sold the long quickly

CTAs follow models…and they would need to reload those longs should this market continue to move higher.

Source: GS

Riding the oil bull

Momentum chasers enjoying the oil squeeze…

Source: DB

CTAs and oil

They have played momentum well and would be sellers in a possible down scenario, but selling oil doesn’t seem to be the most urgent trade.

Source: GS

Multiple expansion may have run its course

As for rates, which may or may not be peaking as the economic data remains robust, the read through for stocks is a bit tricky. Jefferies looked at the price and multiple changes for the SPX at the end of the last 7 rate hike cycles and found…a bit of a mixed bag. Index performance can be quite strong or quite weak (though arguably, the rallies observed in ’07 and ’19 wound up being opportunities to top tick the market), with no real pattern. However, the SPX has tended to derate once the hiking has stopped, which is yet another sign that multiple expansion may have run its course for the meantime.

Source: Jefferies

Bonkers

Albert Edwards writes: “US corporate net interest payments fell yet again…and are now down 30% yoy despite higher rates.” Truly bonkers…

Source: Soc Gen

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