✅ 𝗚𝗔𝗦 𝗪𝗲𝗲𝗸𝗹𝘆 𝟮𝟮𝗻𝗱-𝟮𝟲𝘁𝗵 𝗙𝗲𝗯 𝟮𝟬𝟮𝟭 ✅

𝙒𝙚 𝙟𝙪𝙨𝙩 𝙛𝙞𝙣𝙞𝙨𝙝𝙚𝙙 𝙖𝙣𝙤𝙩𝙝𝙚𝙧 𝙘𝙤𝙧𝙧𝙚𝙘𝙩𝙞𝙫𝙚 𝙖𝙣𝙙 𝙩𝙝𝙞𝙨 𝙩𝙞𝙢𝙚 𝙖𝙡𝙨𝙤 𝙢𝙤𝙧𝙚 𝙫𝙤𝙡𝙖𝙩𝙞𝙡𝙚 𝙬𝙚𝙚𝙠. 𝙏𝙚𝙘𝙝 𝙨𝙩𝙤𝙘𝙠𝙨 𝙩𝙤𝙤𝙠 𝙩𝙝𝙚 𝙢𝙖𝙞𝙣 𝙝𝙞𝙩, 𝙖𝙨 𝙖𝙣 𝙚𝙛𝙛𝙚𝙘𝙩 𝙤𝙛 𝙧𝙞𝙨𝙞𝙣𝙜 𝙏𝙧𝙚𝙖𝙨𝙪𝙧𝙮 𝙮𝙞𝙚𝙡𝙙𝙨. 𝟭𝟬𝙔 𝙮𝙞𝙚𝙡𝙙 𝙞𝙨 𝙣𝙤𝙬 𝙖𝙩 𝙤𝙧 𝙖𝙗𝙤𝙫𝙚 𝙩𝙝𝙚 𝙙𝙞𝙫𝙞𝙙𝙚𝙣𝙙 𝙮𝙞𝙚𝙡𝙙 𝙤𝙣 $𝙎𝙋𝙓𝟱𝟬𝟬 . 𝘼𝙡𝙡 𝙢𝙖𝙞𝙣 𝙩𝙧𝙖𝙙𝙞𝙩𝙞𝙤𝙣𝙖𝙡 𝙖𝙨𝙨𝙚𝙩 𝙘𝙡𝙖𝙨𝙨𝙚𝙨 𝙬𝙚𝙧𝙚 𝙙𝙤𝙬𝙣 𝙩𝙝𝙞𝙨 𝙬𝙚𝙚𝙠, 𝙬𝙝𝙞𝙘𝙝 𝙞𝙨 𝙥𝙧𝙚𝙩𝙩𝙮 𝙪𝙣𝙪𝙨𝙪𝙖𝙡.

The repricing of cost of equity was the main theme this week. I wrote about it extensively here: etoro.tw/3pOkOdO . Rotation out of growth sectors was pronounced.

𝗟𝗮𝘀𝘁 𝘄𝗲𝗲𝗸

👉 Monday brought steep losses for $NSDQ100 to start the week ending -2,5%. Broad market ($SPX500) outperformed in general as rotation from hi-techs supported sectors like energy and financials (higher yields are generally better for banking business).
👉 Same day ECB Chief Christine Lagarde played down the rising rates in EU.
👉 On TuesdayFed Chair came to help and rescued the day, which was starting in the red already due to rising rates. Mr.Powell said that “the economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved,”. Indices wiped out losses for the day mainly after his remarks. $AAPL (Apple) was down even 6$ intraday to finish flat. Many other tech stocks performed similarly.
👉 Stocks continued higher on Wednesday as fears momentarily receded.
👉 Yields continued higher again on Thursday and the 10Y yield trespassed the $SPX500 dividend yield for the first time in a long time. A treasuries became a natural competition to holding equities, the latter asset naturally sold off again. Indices were down -1,8% ($DJ30) to -3,5% (Nasdaq).
👉 As I wrote in the post I gave a link to in the 1st paragraph, it is notable that the sell-off in equities generally did not cause a flight-to-quality reaction (bid into LT treasuries and $GOLD). This is very imporant in understanding the nature of what’s happening right now. This is a repricing and rotation mainly. No risk-off signs are seen (yet).
👉 Screens stayed red on Friday as well for the same reasons.
👉 “The PCE index, which the Federal Reserve watches closely, rose 0.3% for the month, slightly ahead of the 0.2% expectation but was up just 1.5% year over year, matching Dow Jones estimates.” (CNBC)
👉 𝙀𝙛𝙛𝙚𝙘𝙩𝙞𝙫𝙚 𝙬𝙚𝙚𝙠𝙡𝙮 𝙞𝙣𝙙𝙚𝙭 𝙘𝙝𝙖𝙣𝙜𝙚𝙨: $SPX500 -2,5%, $NSDQ100 -5%, EuroStoxx600 -2,4%, $GER30 -1,5%, $JPN225 -3,5%.

𝗢𝘁𝗵𝗲𝗿 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗲𝘃𝗲𝗻𝘁𝘀:

👉 𝘽𝙤𝙣𝙙𝙨: the US yield curve (10y-FF) is wider again at 138bps, the German curve (10Y Bunds-3M) at 32bps. EuroArea AAA-rated bonds yield curve at 40bps. High Yield Spreads at 3,4.
👉 𝘾𝙤𝙢𝙢𝙤𝙙𝙞𝙩𝙞𝙚𝙨 (𝙚𝙭 𝙤𝙞𝙡): $GOLD -2,8%, $SILVER -2,5% on week.
👉 𝙊𝙞𝙡: +4,4% on week.
👉 𝘾𝙪𝙧𝙧𝙚𝙣𝙘𝙞𝙚𝙨: DXY (Dollar Index) +0,6% on week, $EURUSD -0,4%.

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