𝘼 𝙘𝙤𝙧𝙧𝙚𝙘𝙩𝙞𝙫𝙚 𝙬𝙚𝙚𝙠 𝙤𝙣 𝙚𝙦𝙪𝙞𝙩𝙞𝙚𝙨 𝙗𝙚𝙝𝙞𝙣𝙙 𝙪𝙨. 𝙑𝙤𝙡𝙖𝙩𝙞𝙡𝙞𝙩𝙮 𝙞𝙣𝙘𝙧𝙚𝙖𝙨𝙚𝙙 𝙨𝙤𝙢𝙚𝙬𝙝𝙖𝙩 (𝙑𝙄𝙓 𝙞𝙣𝙙𝙚𝙭 𝙞𝙣 𝙩𝙝𝙚 𝟯𝟬-𝙞𝙚𝙨 𝙛𝙧𝙤𝙢 𝟮𝟬-𝙞𝙚𝙨 𝙩𝙝𝙚 𝙬𝙚𝙚𝙠 𝙗𝙚𝙛𝙤𝙧𝙚). 𝙊𝙩𝙝𝙚𝙧 𝙖𝙨𝙨𝙚𝙩 𝙘𝙡𝙖𝙨𝙨𝙚𝙨 𝙬𝙚𝙧𝙚 𝙢𝙤𝙧𝙚 𝙨𝙩𝙖𝙗𝙡𝙚. 𝙍𝙚𝙥𝙤𝙧𝙩𝙞𝙣𝙜 𝙨𝙚𝙖𝙨𝙤𝙣 𝙧𝙤𝙡𝙡𝙨 𝙤𝙪𝙩.
Not much readacross seen yet from the equities sell-off onto safe havens. 10Y Treasury yields fell slightly, $GOLD was pretty much flat on week. Equity indices corrected by 3-3,5% around the world.
𝗟𝗮𝘀𝘁 𝘄𝗲𝗲𝗸
👉 Monday pointed to a higher opening on Wall Street. Recent divergence between $NSDQ100 and $SPX500 continued generally (appx. 3% outperformance of the former index on YTD basis). Both indices closed at record highs on Monday.
👉 The $GME (GameStop Corp New) frenzy started right into the start of the week. The stock started skyrocketting after a Reddit thread urged a big group of day traders to push the stock higher to squeeze out a relatively big portion of equity being shorted by Hedge Funds. This phenomenon is something that is a general new threat to the equity markets. It also spurred negative sentiment around Wall Street for the rest fo the week.
👉 13 $DJ30 and 111 $SPX500 components released numbers last week. Among the biggest were: $AXP (American Express CO) , $MMM (3M), $JNJ (Johnson & Johnson) , $GE (General Electric Co), $VZ (Verizon) , $MSFT (Microsoft), $AAPL (Apple), $TSLA (Tesla Motors, Inc.), $FB (Facebook) . Next week comes $GOOG (Alphabet) by the way. In general the vast majority of companies delivered better-than-expected results, but market reaction was often mixed to negative, as the “sell the facts” phenomenon clearly prevailed.
👉 On Tuesday the S&P/Case Shiller home prices reported showed an 8,8% jump in home prices for Nov 2020.
👉 $AAPL showed blowout 4Q20 on Wednesday, having booked more than USD100bn revenues for the 1st time in history. Still investors realized recent gains post the release. Stocks were under quite some pressure that day (worst sell-off in 3 months). Major drag lower was $BA (Boeing) (-4%) and the Tech bellweathers also sold off. the $GME short squeeze continued. The mania gathered increased scrutiny from the SEC. Some other stocks behaved similarly, which increased fears that this can become the new normal. Level of speculation in markets is high in general and that’s possibly a reason good enough for a correction happening.
👉 Thursday brought a rebound. Robinhood was made to stop accepting trading in shares and options of some of the heavily shorted names.
👉 On Friday equity indices turned back lower. The worries about the Hedge Fund industry beeing squeezed out by groups of stock rookies gathered in social media group spelled a generall risk aversion. $GME ended the week 400% higher.
👉 “While we expect some more deleveraging, ultimately the scale of the problem appears quite limited. The total dollar value of short interest is ~$800Bn but that for stocks with a short interest to float ratio greater than 20% is only $40Bn,” Barclays strategist Maneesh Deshpande said in a note.
👉 𝙀𝙛𝙛𝙚𝙘𝙩𝙞𝙫𝙚 𝙬𝙚𝙚𝙠𝙡𝙮 𝙞𝙣𝙙𝙚𝙭 𝙘𝙝𝙖𝙣𝙜𝙚𝙨: $SPX500 -3,3%, $NSDQ100 -3,3%, EuroStoxx600 -3,1%, $GER30 -3,2%, $JPN225 -3,4%.
𝗢𝘁𝗵𝗲𝗿 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗲𝘃𝗲𝗻𝘁𝘀:
👉 𝘽𝙤𝙣𝙙𝙨: the US yield curve (10y-FF) turned briefly below 100bps on the risk-off mood we faced into end of the week, the German curve (10Y Bunds-3M) at 9bps. EuroArea AAA-rated bonds yield curve at 12bps. High Yield Spreads at 3,8.
👉 𝘾𝙤𝙢𝙢𝙤𝙙𝙞𝙩𝙞𝙚𝙨 (𝙚𝙭 𝙤𝙞𝙡): $GOLD -0,3%, $SILVER +5,8% on week.
👉 𝙊𝙞𝙡: 0,0% on week. Not much action again.
👉 𝘾𝙪𝙧𝙧𝙚𝙣𝙘𝙞𝙚𝙨: DXY (Dollar Index) +0,33% on week, $EURUSD -0,3%.
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