Traders Market Weekly: When Logic Hits You in The Face

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  • #38609

    Ok one more time ….

    U.S. Treasuries sit on their lows with shorter tenors remaining behind. Treasuries opened the day on a sharply lower note while recent trade saw 10s and 30s slip to fresh lows. Equities started the day on a weak note with the S&P 500 (-2.7%) staying a bit ahead of the Nasdaq (-3.1%). Last week, the market saw a jump in expectations for the possibility of a 75-bps rate hike on Wednesday.

    The fed funds futures market ended last week with a 21.3% implied likelihood of a 75-bps increase and the implied probability of such a move increased to 30.0% today. High-yield debt is showing notable weakness with the iShares iBoxx High Yield Corporate Bond ETF (HYG 73.02, -2.61, -3.5%) falling to its lowest level since March 2020.

    • This reply was modified 9 months, 2 weeks ago by TradersCom.

    High-yield debt showing defined weakness:

    Shares iBoxx High Yield Corporate Bond ETF $HYG 73.10 ▼ 2.53 (▼3.35%) falling to its lowest level since March 2020 at 72.90 earlier


    ^^^^ +1s for excellent posts to highlight weekly trading concerns ahead 🙂
    And BITCOIN is down 15% today alone in 23,000 range – along with all other kryptonite investments
    as INFLATION + rising interest rates are making 2022 a bad year for stocks & even USA MAIN STREET itself
    and I do hope tide turns for sake of those struggling – but it is wise to hunker & bunker down for now



    Why $ES_F $CL_F $NDX bounce?

    FX & #bonds big leaders under the hood
    O/N Flattening #yield curve 2s10s briefly inverted this AM spread narrowed to just 5bps now widened back to double digits at 12 bps, tighter by 4bps to Friday settle


    I wish I had better news … SELLING is accelerating into close on equities
    DOW -900 …. NASDAQ -500 …. BITCOIN 23,000 … Bear market levels now on most indexes


    Dow 30,518.06 -874.73 -2.79%
    S&P 500 3,749.91 -150.95 -3.87%
    Nasdaq 10,809.23 -530.80 -4.68%
    GlobalDow 3,584.72 -118.56 -3.20%
    Gold 1,824.70 -50.80 -2.71%
    Oil 120.19 -0.48 -0.40%

    This features best in Air Force & one of best band/guitarists all-time 🙂


    The global equity markets are mixed. S&P Futures are up about 22 points to trade around the 3775 area. Although the market is higher, it has slid from the best level of the night. The peak at 3807.50 occurred at the tail end of the Asian trade. The low was established early at 3754.50.

    S&P Futures vs Fair Value: +27.0
    10 yr Note: 3.322%
    USD/JPY: 134.24 -0.18
    EUR/USD: 1.0456 +0.0049
    Europe: FTSE: -0.1% DAX: -0.2% CAC: -0.5%
    Asia: Hang Seng: 0.0% Shanghai: +1.0% Nikkei: -1.3%
    Gold (1824.00 -7.80) Silver (21.09 -0.16) Crude (121.30 +0.38)


    IN Asia, China rose 1.0% while Japan dropped 1.3%. The Shanghai Composite reversed early losses after a buying spree took place in the last hour. This helped the index close at the high of the day. In Japan, the Nikkei followed Wall Street lower to notch its third consecutive loss. Market heavyweight, SoftBank, continued to outpace declines with a loss of nearly 3% on Tuesday.
    In Europe, the major bourses saw an early bid give way to modest declines. Hotter than expected inflation data out of Germany threw cold water on the markets. The German CPI for May rose 0.9% and far exceeded the forecast of 0.0%. Semiconductors are off to a weak start with STMicroelectronics and Infineon down 1-2%.
    Market Updates


    Braze (BRZE) beats by $0.02, beats on revs; guides JulQ EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus… BRZE up 3.1%
    Oracle (ORCL) beats by $0.16, beats on revs; guides on the call: sees AugQ EPS in-line and revs above consensus; expects its cloud business to organically grow over 30% yr/yr in FY23…. ORCL up 11.8%
    Xperi’s (XPER) Adeia receives decision in Videotron litigation… XPER down 6.4%


    Fair Value for Tuesday, June 14th:

    S&P 500: 3,748
    Nasdaq 100: 11,307
    DJIA: 30,455


    Dozens of Democratic lawmakers and party officials are privately saying that President Biden should not run again in 2024. One DNC member wants him to announce he is not running after predicted Democratic losses in midterms, according to the New York Times


    National Vision (EYE 29.04, +3.76, +14.9%): to join S&P SmallCap 600, effective prior to the open June 16
    Continental Resources (CLR 69.60, +5.10, +7.9%): announces receipt of “take private” proposal from Hamm Family of $70/share


    Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note.

    Japan’s Nikkei -1.3%;
    Hong Kong’s Hang Seng unchanged;
    China’s Shanghai Composite +1.0%;
    India’s Sensex -0.3%;
    South Korea’s Kospi -0.5%;
    Australia’s All Ordinaries -3.7%.


    China’s May FDI 17.3% YTD (last 20.5%) o Japan’s April Industrial Production -1.5% m/m (last -1.3%) and Capacity Utilization 0.0% m/m (last -1.6%)
    India’s May WPI Inflation 15.88% yr/yr (expected 15.10%; last 15.08%)
    Australia’s May NAB Business Survey 16 (last 19) and NAB Business Confidence 6 (last 10)

    The Bank of Japan offered to buy JPY100 bln worth of 10- to 25-yr JGBs and JPY50 bln worth of long duration JGBs in addition to its scheduled buying scheme.
    Samsung warned that its factories in South Korea are dealing with disruptions due to the truckers’ strike.
    China Securities Journal speculated that the People’s Bank of China has room to lower the reserve requirement ratio in the second half of the year.

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