Big-Tech Bounces; Bonds, Bitcoin, & Black Gold Struggle As Rate-Hike Odds Rise

TME Weekend: Extremely many “extremes”

Bull markets in extremes

Yes, you can always find a bear market in something and you can always find extreme observations / charts / data-points. But we wonder if we right now are witnessing an extreme amount of these extremes – and especially so considering the relatively low equity volatility. Below is a total random list of current extremes. Presented without analysis or conclusion.

Lowest ever money supply growth

U.S. and ECB M2 money supply growth rates have fallen to their lowest year-over-year levels ever recorded.

Source: State Street

Downside protection has never* been cheaper

Since the data began to be collected in 2008, the cost to hedge S&P 500 downside protection has never been cheaper.

Source: BofA

Mortgage rates highest in 23 years

US 30-Year fixed-rate mortgage reached 7.53% on Friday, the highest rate since October 2000.

Source: bankrate.com

Debt ATH

The US now has $17.1 trillion in household debt….$12 trillion in mortgages….$1.6 trillion in auto loans….$1.6 trillion in student loans….$1 trillion in credit card debt….all of those are all time records.

US net interest payments highest since 1999

And this is of course not a bullish development…

Source: Jefferies

Bond vigilante extreme

The comeback of bond vigilantes: US 10y real rates have jumped to 1.77%, almost the highest level since 2009.

Source: Bloomberg

Companies with negative earnings

More than 40% of the companies in Russel 2000 have negative earnings. These are levels not seen since the peak of the pandemic, but more importantly the height of the great financial crisis of 2008.

Source: Apollo

European beats: Lowest in 5 years

European earnings have been the weakest in three years in terms of the breadth and magnitude of EPS and sales beats. Only 8% of companies have beaten consensus expectations at the top line, the lowest reading since 1Q18. Meanwhile, only 14% of companies have beaten consensus EPS expectations this quarter, below Q1 at 35%. Consumer Staples have been underwhelming. Similar to the US, price action around beats/misses has been negatively skewed. (Morgan Stanley)

Europe all time high discount

Europe is trading at an all-time-wide discount on 12m forward P/E (34%).

Source: Bernstein

All-time-low in HY issuance

HY issuance at maturities greater than 8 years has dropped to an all-time low in 2023.

Source: Dealogic

Tech valuations at “crazy” Covid highs

Tech valuations got back to those crazy 2020/21 pandemic liquidity frenzy levels (and a key difference now is the record pace and magnitude of monetary tightening globally vs easing back then).

Source: New Edge

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