✅ 𝗚𝗔𝗦 𝗪𝗲𝗲𝗸𝗹𝘆 𝟭𝟱𝘁𝗵-𝟭𝟵𝘁𝗵 𝗙𝗲𝗯 𝟮𝟬𝟮𝟭 ✅

𝗪𝗲 𝗵𝗮𝗱 𝗮 𝘀𝗹𝗶𝗴𝗵𝘁𝗹𝘆 𝗰𝗼𝗿𝗿𝗲𝗰𝘁𝗶𝘃𝗲 𝘄𝗲𝗲𝗸. 𝗧𝗵𝗲 𝗺𝗮𝗷𝗼𝗿 𝗱𝗿𝗮𝗴 𝗼𝗻 𝗲𝗾𝘂𝗶𝘁𝗶𝗲𝘀 𝘁𝗵𝗶𝘀 𝘄𝗲𝗲𝗸 𝘄𝗮𝘀 𝘁𝗵𝗲 𝗰𝗼𝗻𝘁𝗶𝗻𝘂𝗲𝗱 𝗿𝗶𝘀𝗲 𝗶𝗻 𝘁𝗵𝗲 𝗹𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 𝘆𝗶𝗲𝗹𝗱𝘀 𝗮𝗰𝗿𝗼𝘀𝘀 𝗮𝗹𝗹 𝗺𝗮𝗷𝗼𝗿 𝗱𝗲𝘃𝗲𝗹𝗼𝗽𝗲𝗱 𝗰𝗼𝘂𝗻𝘁𝗿𝗶𝗲𝘀. 𝗥𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴 𝘀𝗲𝗮𝘀𝗼𝗻 𝗮𝗹𝘀𝗼 𝘀𝗹𝗼𝘄𝗹𝘆 𝗺𝗼𝘃𝗲𝘀 𝘁𝗼𝘄𝗮𝗿𝗱𝘀 𝘁𝗵𝗲 𝗲𝗻𝗱. 𝗦𝘁𝗶𝗹𝗹 𝘃𝗼𝗹𝗮𝘁𝗶𝗹𝗶𝘁𝘆 𝘀𝘁𝗮𝘆𝘀 𝗳𝘂𝗹𝗹𝘆 𝘂𝗻𝗱𝗲𝗿 𝗰𝗼𝗻𝘁𝗿𝗼𝗹.

The US yield curve widened up to 134bps. Similar steepening of the curve happened in the Euro Area and even Japan. Higher inflation expectations keep settling into investors’ minds for good slowly. The rise in yields caused some worries around equity investors. The question is when the long-term Treasuries can become a serious alternative for stocks. Currently the $SPX500 dividend yield is 157bps and FCF (as of Nov ’20) was 110bps. So another 30bps move in the yield curve could already put a more decisive pressure on equities relative to bonds.

𝗟𝗮𝘀𝘁 𝘄𝗲𝗲𝗸

👉 It was a shorter week for US equity markets and Monday was closed for President’s Day.
👉 Early Tuesday the 30-yr Treasury yield ticked above 2%, adding to the worries that dominated the headlines till the end of week. Equities actually pointed to another ATH opening, but slid somewhat intraday later on.
👉 The mindful watch on the USD1,9tn Covid stimulus saga on Capitol hill continued.
👉 The underperformance of tech-heavy indices like Nasdaq and $NSDQ100 was also clear whole last week. The $DJ30 on the other hand managed to eke out a new record on Wednesday.
👉 Also on Wednesday Ark Invest announced that it has added to its $TSLA (Tesla Motors, Inc.) holdings. Cathie Wood said they see a lot of value in ride sharing and that adds to their confidence in the company. On the other big corp front $BRK.B (Berkshire Hathaway Inc) announced it took a sizeable stake in $VZ (Verizon) , causing the stock rise over 5% on that day. $CVX (Chevron) was 3% for the same reason.
👉 On Thursday hearings before the US House Committee on Financial Services on the $GME (GameStop Corp New) drama took place. They included the CEO of Robinhood.
👉 Fed minutes revealed showed that “Participants noted that economic conditions were currently far from the Committee’s longer-run goals and that the stance for policy would need to remain accommodative until those goals were achieved,”. The Fed put is still in place.
👉 Stocks slid on Thrusday after weaker-than-expected jobless data (861k vs. 773k exp) and bleak numbers (with a bleak f’cast) from $WMT (Wal-Mart) . Investors continue to rotate out of the big-tech space. $AAPL (Apple), $MSFT (Microsoft), $GOOG (Alphabet) and other bellweathers all took the pain of higher yields.
👉 Friday ended with tiny losses for main indices as well.
👉 𝙀𝙛𝙛𝙚𝙘𝙩𝙞𝙫𝙚 𝙬𝙚𝙚𝙠𝙡𝙮 𝙞𝙣𝙙𝙚𝙭 𝙘𝙝𝙖𝙣𝙜𝙚𝙨: $SPX500 -0,7%, $NSDQ100 -1,6%, EuroStoxx600 +0,2%, $GER30 -0,4%, $JPN225 +1,7%.

𝗢𝘁𝗵𝗲𝗿 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗲𝘃𝗲𝗻𝘁𝘀:

👉 𝘽𝙤𝙣𝙙𝙨: the US yield curve (10y-FF) is wider again at 131bps, the German curve (10Y Bunds-3M) at 29bps. EuroArea AAA-rated bonds yield curve at 30bps. High Yield Spreads at 3,4.
👉 𝘾𝙤𝙢𝙢𝙤𝙙𝙞𝙩𝙞𝙚𝙨 (𝙚𝙭 𝙤𝙞𝙡): $GOLD -2,3%, $SILVER -0,3% on week.
👉 𝙊𝙞𝙡: -0,8% on week.
👉 𝘾𝙪𝙧𝙧𝙚𝙣𝙘𝙞𝙚𝙨: DXY (Dollar Index) -0,2% on week, $EURUSD +0,0%.

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