“Increasingly we enter a money and credit age. Pecuniary standards make headway over all other standards…”
- Stuart Chase
That was an economist’s quote from the late 1920s. It could easily have been Wall Street’s preview to last night’s election. Forget your politics for a second - as a profession, where are we really at this morning? What “stimulus” do we need next?
Back to the Global Macro Grind…
As of the time of this writing, there is only one crystal clear loser of last night’s US election – whoever shorted US Treasuries at the top-end of my UST Bond Yield Risk Range.
Since many people probably won’t be reading anything apolitical this morning, I’ll keep this tight. Here are the Top 3 Things that I just emailed to our premium paying Institutional Subscribers (they get this note, daily, by 6AM):
- 10YR – biggest loser last night was whoever bet on A) rising interest rates and B) a steepening yield curve – UST 10yr Yield buried in the backfield for a -12 basis point loss and the curve compresses in kind after UST 10yr Yield went literally right to where it plugged people on June 8th – for now, it’s #Quad3 in the USA, not #Quad2
- VIX – while many people trade their political emotions back and forth, don’t forget that only perpetuates this Bullish @Hedgeye TREND Regime of Volatility; the LOW end of my Risk Range on the VIX = 30.97! and there’s immediate-term upside in VIX and #NazVol (VXN) to 43 and 45, respectively – pressing my Financials (XLF) short
- ASIA – there’s always a Bullish @Hedgeye TREND somewhere in Global Equities and everything we are long in Asia (Japan up another +1.7% overnight, Taiwan +1.0%, China +0.2%) continues to act great with nothing remotely resembling US Equity Vol Signals; remember China remains #Quad1; South Korea now #Quad1
Nope, no political “feelings”, themes, or views required to execute in this morning’s Global Macro OODA Loops – Observe, Orient, Decide, and Act – that’s what we do. I slept 6 hours and “feel” like I have less covid in between my ears too.
Here’s an extended list of @Hedgeye TREND Signals (in brackets) and Risk Ranges to OODA on:
UST 10yr Yield 0.73-0.91% (bearish)
UST 2yr Yield 0.13-0.18% (bearish)
SPX 3211-3399 (bearish)
RUT 1 (bearish)
NASDAQ 10,763-11,298 (neutral)
Tech (XLK) 108.42-116.17 (bearish)
REITS (XLRE) 33.33-36.15 (neutral)
Utilities (XLU) 62.09-65.94 (bullish)
Financials (XLF) 23.23-25.27 (bearish)
Shanghai Comp 3 (bullish)
Nikkei 23006-23791 (bullish)
DAX 114 (bearish)
VIX 30.97-42.93 (bullish)
USD 92.32-94.40 (bearish)
EUR/USD 1.160-1.189 (bullish)
USD/YEN 104.12-105.21 (bearish)
GBP/USD 1.289-1.315 (bullish)
USD/CHF 0.90-0.92 (bearish)
Oil (WTI) 34.93-41.07 (bearish)
Nat Gas 2.90-3.46 (bullish)
Gold 1 (bullish)
Silver 23.05-25.15 (bullish)
Copper 3.02-3.18 (bullish)
MSFT 196-210 (bearish)
AAPL 106-114 (bearish)
AMZN 2 (bearish)
FB 255-275 (neutral)
GOOGL 1 (bullish)
NFLX 468-502 (bearish)
TSLA 374-441 (neutral)
Bitcoin 12,709-13,921 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
