Grab your coffee and let’s kick off the week with some sharp, actionable insights. At Hedgeye, we're all about cutting through the noise with data, discipline, and a focus on timing.
Here's what you need to watch today and in the week ahead:
1. USD Weakness = Opportunity, Not Narrative Driven
The U.S. Dollar is softer this morning, and let’s be clear: our position is NOT based around headlines like Moody’s credit downgrade.
We should consider this USD weakness as another opportunity to:
- Bitcoin (IBIT): Roll into BTC exposure against a weak Dollar (BTC/USD correlation +0.88).
- Gold: Lighten up towards minimum asset allocations as USD bottoms short-term (Gold/USD correlation -0.75).
2. Rates – Yields Rising, Recession Fading?
Treasury yields keep pushing higher, marking the third consecutive week of gains. The market’s recession fears are fading and being replaced by confidence in strengthening U.S. economic data.
This opens opportunities to capitalize on the widening yield spread (+54bps between 10yr and 2yr). Join Elite Macro to see how we’re positioning to profit.
3. Volatility – Navigating "The Chop"
The SPX pre-market drop today isn’t just random noise—it’s exactly the kind of volatility we typically see after Options Expiration days like last Friday. Think of it as the market hitting a quick reset button, shaking things up before settling down.
Our Risk Range™ for the VIX (market volatility gauge) remains wide, hinting that more chop is likely ahead.
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Dive into what's driving shifts in the CLO Market—essential insights for credit investors:
- The health of the leveraged loan market
- Shifts in credit quality and default risk
- Where institutional capital is flowing—and why
- How macro volatility is reshaping the search for yield
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