𝘼𝙨 𝙩𝙝𝙚 𝙮𝙞𝙚𝙡𝙙𝙨 𝙘𝙖𝙡𝙢 𝙙𝙤𝙬𝙣, 𝙩𝙝𝙚 𝙚𝙦𝙪𝙞𝙩𝙮 𝙢𝙖𝙧𝙠𝙚𝙩𝙨 𝙣𝙖𝙩𝙪𝙧𝙖𝙡𝙡𝙮 𝙧𝙚𝙨𝙩𝙤𝙧𝙚 𝙩𝙝𝙚𝙞𝙧 𝙜𝙧𝙤𝙬𝙩𝙝 𝙩𝙧𝙖𝙟𝙚𝙘𝙩𝙤𝙧𝙮. 𝘼 𝙨𝙝𝙤𝙧𝙩𝙚𝙧 𝙬𝙚𝙚𝙠 𝙞𝙨 𝙗𝙚𝙝𝙞𝙣𝙙 𝙪𝙨, 𝙖𝙨 𝙢𝙤𝙨𝙩 𝙢𝙖𝙧𝙠𝙚𝙩𝙨 𝙬𝙚𝙧𝙚 𝙘𝙡𝙤𝙨𝙚𝙙 𝙤𝙣 𝙁𝙧𝙞𝙙𝙖𝙮 𝙛𝙤𝙧 𝙀𝙖𝙨𝙩𝙚𝙧 𝙝𝙤𝙡𝙞𝙙𝙖𝙮 𝙨𝙚𝙖𝙨𝙤𝙣. 𝙂𝙧𝙤𝙬𝙩𝙝 𝙧𝙚𝙜𝙖𝙞𝙣𝙚𝙙 𝙢𝙤𝙢𝙚𝙣𝙩𝙪𝙢 𝙩𝙝𝙞𝙨 𝙬𝙚𝙚𝙠.
Both $DJ30 and $SPX500 made new ATHs this week with the latter having trespassed the psychological 4000 pts. level. Best performing story of the week was Growth though, with $NSDQ100 clearly outperfoming other benchmarks. Down-beat high-tech stocks regained momentum.
𝗟𝗮𝘀𝘁 𝘄𝗲𝗲𝗸
👉 Headlines on Monday were concentrated around Archegos Capital Managment, a hedge fund that was seemingly forced to close large positions in some of the media and banking stocks (i.e. ViacomCBS, Discovery, Nomura and CS). The Dow set a new ATH.
👉 The 10Y treasury yield touched its high from Jan 2020 on Tuesday, causing a typical sell-off in the tech stock, which have almost ideal negative correlation with the rates for a few weeks now. Nasdaq was down more than 1%.
👉 The big dispute of Value over Growth continues with more and more sellside brokers as well as buyside AMs calling the “comeback of Value stocks” due in coming years. This is mostly supported by the expectations of higher inflation, lower bond yields, higher cost of capital (dragging down Growth stocks valuations). The last big name to call this scenario is Amundi. We’ll see, time will tell. I have a feeling we’re in 2010/11 again, whne infaltion expectations were rising very rapidly as well, causing a surge in resources for instance. But eventually CPI was low and slow for the next decade. Let’s keep in mind that with the unprecedented increase of fiscal debt collected over the last year by most countries to fight the Covid-10 downturn, much higher interest rates will not be bearable for the governments to service debt burden. Still the central banks are easy with their policy rethorics, not expecting inflation running out of control any time soon. Eaither the CB’s are right, or we get really high inflation (as some call it to happen) and then comes….a series of debt crises. Remember Greece 2011????
👉 We had a quarter end on Wednesday with all indices ending green. The $SPX500 ended March +4,2%. For the quarter Dow and SP500 were up 7,8% and 5,8% respectively, whilst Nasdaq u/ped with a +2,8% QoQ gain. Also President J.Biden announced a $2tn infrastructure plan, supporting markets.
👉 Thursday was rather calm, as most investors prepared for holiday season.
👉 𝙀𝙛𝙛𝙚𝙘𝙩𝙞𝙫𝙚 𝙬𝙚𝙚𝙠𝙡𝙮 𝙞𝙣𝙙𝙚𝙭 𝙘𝙝𝙖𝙣𝙜𝙚𝙨: $SPX500 +2,8%, $NSDQ100 +4,3%, EuroStoxx600 +2,2%, GER30 +3,3%, JPN225 +2,3%.
𝗢𝘁𝗵𝗲𝗿 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗲𝘃𝗲𝗻𝘁𝘀:
👉 𝘽𝙤𝙣𝙙𝙨: the US yield curve (10y-FF) narrowed to 163bps, the German curve (10Y Bunds-3M) at 32bps. EuroArea AAA-rated bonds yield curve wider again at 38bps. High Yield Spreads at 3,3.
👉 𝘾𝙤𝙢𝙢𝙤𝙙𝙞𝙩𝙞𝙚𝙨 (𝙚𝙭 𝙤𝙞𝙡): GOLD -0,1%
👉 𝙊𝙞𝙡: +0,9% on week.
👉 𝘾𝙪𝙧𝙧𝙚𝙣𝙘𝙞𝙚𝙨: DXY (Dollar Index) +0,3% on week, EURUSD -0,3%.
Best, GlobalAlphaS
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