Big time pivot, it was… I guess Macro Tourists just had the direction a little off…
- USD – Strong Dollar in #Quad4 remains (don’t forget we’ve only hit the 1st of 4 straight #Quad4s for company P&Ls = ROC of REVS and EPS slowing, at the same time) and the Pound (GBP/USD -1.1%) is getting #pounded this morning, as the BOE tightens into a nasty UK slowdown. Chinese Yuan coming unhinged here post a Recessionary Services PMI of 48.4 (and they make up the numbers!)
- RATES – PIVOT HIGHER = NEW CYCLE HIGH FOR THE UST 2YR YIELD – yes I’m going all CAPS on you this morning because the BOND MARKET (and FX) market was signaling the opposite of the uniquely American US stock market FOMO narrative – UST 2yr = 4.72% this morning crushes the Yield Curve to -52 on 10s/2s. Powell is hell bent on crashing this plane into a #Quad4 Recession
- RUSSELL – I had hundreds of client/subscriber questions on “why, why, why” the Russell was up. Then it went straight back down -3.4% on the day, taking its #Quad4 Crash to -26.7% from its all-time bubble high of NOV 2021 (in #Quad2). Positioning dynamics mattered, big time, with many L/S Hedge Funds seeing their LONG books implode (AMZN) and forced to de-gross (cover smaller cap shorts)
Immediate-term @Hedgeye Risk Ranges: SP500 = 3; UST 10yr Yield = 3.93-4.31%
KM
