✅ 𝗚𝗔𝗦 𝗪𝗲𝗲𝗸𝗹𝘆 𝟭𝟰𝘁𝗵-𝟭𝟴𝘁𝗵 𝗝𝘂𝗻𝗲 𝟮𝟬𝟮𝟭 ✅

𝗦𝗼 𝘄𝗲’𝘃𝗲 𝗵𝗮𝗱 𝘁𝗵𝗲 𝘃𝗲𝗿𝘆 𝗶𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗙𝗢𝗠𝗖 𝘁𝗵𝗶𝘀 𝘄𝗲𝗲𝗸 𝘁𝗵𝗮𝘁 𝘀𝗮𝗶𝗱 𝘁𝘄𝗼 𝘁𝗵𝗶𝗻𝗴𝘀: 𝟭. 𝘄𝗲 𝗮𝗰𝗸𝗻𝗼𝘄𝗹𝗲𝗱𝗴𝗲 𝗵𝗼𝘁 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗿𝗮𝗶𝘀𝗲 𝘁𝗵𝗲 𝗱𝗼𝘁 𝗽𝗹𝗼𝘁 𝗳𝗼𝗿 𝟮𝟬𝟮𝟯 𝗼𝗻𝘄𝗮𝗿𝗱𝘀 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁 𝘁𝗼 𝘀𝘁𝗮𝗿𝘁 𝗱𝗶𝗴𝗲𝘀𝘁𝗶𝗻𝗴 𝗵𝗶𝗴𝗵𝗲𝗿 𝗿𝗮𝘁𝗲𝘀 𝘀𝗼𝗼𝗻𝗲𝗿 𝗮𝗻𝗱 𝟮. 𝘄𝗲’𝘃𝗲 𝗸𝗲𝗲𝗽𝗶𝗻𝗴 𝘁𝗵𝗲 𝗮𝘀𝘀𝗲𝘁 𝗽𝘂𝗿𝗰𝗵𝗮𝘀𝗲𝘀 𝗮𝘀 𝘁𝗵𝗲𝘆 𝘄𝗲𝗿𝗲 (𝗻𝗼 𝘁𝗮𝗽𝗲𝗿𝗶𝗻𝗴). 𝗘𝘅 𝘁𝗵𝗮𝘁 𝘁𝗵𝗲 𝘄𝗲𝗲𝗸 𝘄𝗮𝘀 𝗮𝗯𝗼𝘂𝘁 𝗚𝗿𝗼𝘄𝘁𝗵 𝗼𝘂𝘁𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗶𝗻𝗴 𝗩𝗮𝗹𝘂𝗲 𝘃𝗲𝗿𝘆 𝗰𝗹𝗲𝗮𝗿𝗹𝘆 𝗮𝘀 𝘁𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁 𝗳𝗶𝗿𝗺𝘀 𝘂𝗽 𝗶𝘁𝘀 𝗯𝗲𝗹𝗶𝗲𝗳 𝗶𝗻 𝘁𝗵𝗲 𝗙𝗲𝗱 𝗯𝗲𝗶𝗻𝗴 𝗿𝗶𝗴𝗵𝘁 𝗼𝗻 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻. 𝗥𝗮𝘁𝗲𝘀 𝘄𝗲𝗻𝘁 𝘂𝗽 𝟭𝘀𝘁 𝘁𝗵𝗶𝗻𝗴, 𝗼𝗻𝗹𝘆 𝘁𝗼 𝗴𝗼 𝗯𝗮𝗰𝗸 ​𝘄𝗵𝗲𝗿𝗲 𝘁𝗵𝗲𝘆 𝘄𝗲𝗿𝗲 𝗮𝘁 𝘁𝗵𝗲 𝗯𝗲𝗴𝗶𝗻𝗻𝗶𝗻𝗴 𝗼𝗳 𝘁𝗵𝗲 𝘄𝗲𝗲𝗸.

The Fed did manage to smuggle the “higher rates sooner” message quite subtly, without causing a disaster on risky assets. The clue was about keeping the QE purchases. At the end of the day that’s all that matters, as it keeps the Fed put on for the market participants playing equities and similar assets.

L𝗮𝘀𝘁 𝘄𝗲𝗲𝗸

👉 Monday started out with new ATH for $SPX500 and Nasdaq, as stocks continues positive momentum from the previous week. Especially hi-tech names we’re looking good. Given the FOMC outcome on 10Y treasuries (flat on week), the Growth space was actually doing good on relative basis whole last week.
👉 On Tuesday $SP500 started a 4-day loosing streak that lasted up until Friday. Sell-off was not deep though -2% on week and there’s no signs of higher risk awareness (VIX still in the low 20’s). The Fed started its 2-day meeting.
👉 CNBC: “This is what the Fed has been doing for the last several months — warning that an inflation surge was coming but that it is transitory so no need to taper,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. “Moreover, this is probably the most expected outcome from the Fed meeting.”
👉 On Wednesday we saw a pretty sharp slide post the FOMC decision, but stocks rallier back up partially into the end of session, as J.Powell reiterated his view that inflation is purely transitory. Fed effectively signalled 2 rate hikes in 2023 and no change in asset purchases.
👉 On Thursday Chinan announced its decision to sell out to the market some of its commodities reserves (among others $COPPER ) in a trial to curb rising commodity prices. The effect was sudden ad deep. Commods fell sharply across the boards, led by $COPPER, palladiuam, platinum, also causing commodity stocks to plunge.
👉 $USDOLLAR was the major gainer of Fed’s Wed decision. The currency gained almost 2% on week, adjusting it’s valuation to other currencies on higher expected interest rates in US. 👉 The sell-off continued on Friday and the indices closes at weekly lows. Clearly reopening plays struggled, whilst high-tech showed quite nice resilience again.
👉 𝙀𝙛𝙛𝙚𝙘𝙩𝙞𝙫𝙚 𝙬𝙚𝙚𝙠𝙡𝙮 𝙞𝙣𝙙𝙚𝙭 𝙘𝙝𝙖𝙣𝙜𝙚𝙨: $SPX500 -1,9%, $NSDQ100 +0,4%, EuroStoxx600 -1,2%, $GER30 -1,6%, JPN225 +0,0%.

𝗢𝘁𝗵𝗲𝗿 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗲𝘃𝗲𝗻𝘁𝘀: 👉 𝘽𝙤𝙣𝙙𝙨: the US yield curve narrowed (10y-FF) at 143bps, the German curve (10Y Bunds-3M) at 35 bps. EuroArea AAA-rated bonds yield at 46bps. High Yield Spreads at 3,1. 👉 𝘾𝙤𝙢𝙢𝙤𝙙𝙞𝙩𝙞𝙚𝙨 (𝙚𝙭 𝙤𝙞𝙡): $GOLD -6% on week. 👉 𝙊𝙞𝙡: +1% on week. 👉 𝘾𝙪𝙧𝙧𝙚𝙣𝙘𝙞𝙚𝙨: DXY (Dollar Index) +2% on week, EURUSD -2%.

Best, GlobalAlphaS

Disclaimers: None of the ideas, views and thoughts presented here shall ever be taken as a recommendation to buy or sell stocks,bonds,FX,commodities or any other financial instruments as stated in REGULATION (EU) No 596/2014 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC or the Polish Act of 10 February 2017 amending the act on trading in financial instruments and some other acts. The article is for educational reasons and purely presents private views of the author, thus the author shall not be held accountable for any losses of a third party resulting from any potential trading activities in any instruments, both specifically or by category of assets. The author uses his best knowledge and data from sources believed to be reliable, but makes no representations as to the accuracy of the data.Full Disclaimers&Liability Limitations page.