October 2024 DDD

[ducati916]

The People's Bank of China (PBoC) has announced monetary stimulus that includes cutting the reserve requirement ratio (RRR) by 0.5 percentage points. It also plans to implement further interest rate reductions and inject approximately 1 trillion yuan of long-term liquidity into the economy. This move has helped alleviate concerns about economic activity, as indicated by discrepancies between the NBS and Caixin PMIs and deteriorations in several official PMI components shown in the table.




Crypto:




Volatility is down, way down.

The correlation with NASDAQ is waning, at least currently. Why?



The Savage 7 are stalling. Equal weight in ascendance. Why?

Mr FFF

Insane China Squeeze Underway​

Mon Sep 30, 2024 10:22am EST 0



Last night the Asian markets took on a ribald quality, with the NIKKEI capsizing more than 4.9% due to their new Prime Minister and looming rate hikes, which in turn will unwind the Yen carry trade and China shooting higher by 8%, based off this notion that the government will actively intervene in markets to boost share prices. We heard people like David Tepper declare “buy everything” in China last week in response to this news.
The subsequent results have been nothing less than staggering, with Chicoms ripping 30 to 40% the past 2 weeks.



The double leveraged $CWEB ETF is +89% in the past two weeks.


Clearly, this is overdone to the upside; but now China bulls are pointing to the very large short positions in these stocks and wanting more. Bear in mind, like the oils and basic materials, the China bull trade has been dormant for a very long time, which was a convenient hedge for long short funds to constantly bet against. Now with the fervor pointing straight up, we have ourselves a classic short squeeze playing out and once these things get started, it’s really hard to predict when they’ll end: case in point $GME.



As we stand currently




The thesis:

China's stimulus will attract money out of the US back to China. If it's a significant repatriation, we will have issues in the US.


jog on
duc

 

[ducati916]

Oil News

Europe is preparing for a colder winter this year as meteorologists see an 80-85% probability of the La Niña phenomenon developing, bringing cooler weather to the Atlantic Coast as soon as October.

- According to forecasters, France, the United Kingdom, and Scandinavia will be the coldest parts of Europe this month, whilst the Eastern Mediterranean will continue to see extreme heat, above 90° F.

- European gas inventories are now 94% full, with Denmark being the only country with stocks below 70% fullness, whilst the UK might need to ramp up its purchases of US LNG as its inventory rate stands at 57%.

- The prospect of colder weather has started to push TTF futures higher, with the November contract currently trading at €38 per MWh ($13.5 per mmBtu), just as the Old Continent’s LNG imports dipped to their lowest this year, posting 6.4 million tonnes in September.

Market Movers

- Privately held US shale producer Validus agreed to purchase rival Citizen Energy in a deal worth more than $2 billion, including debt, marking yet another episode of consolidation in the US upstream sector.

- Renewable fuels refiner Vertex Energy (NASDAQ:VTNR) has filed for bankruptcy and is exploring a sale, driven under by a failed foray into biodiesel at its 75,000 b/d refinery in Mobile, Alabama.

- China’s Guangdong Energy Group is set to commission a new $1 billion LNG import terminal in Huizhou in Guangdong province, boasting a capacity of 4 mtpa, with ExxonMobil (NYSE:XOM) securing 20-year access.

Tuesday, October 01, 2024

OPEC+ is facing an uphill battle as its ministerial panel is set to meet on October 2 to discuss the current state of the oil markets. Brent futures edged lower to $71 per barrel on news of Libya’s eastern government potentially lifting the oil embargo, with fear of more crude supply overpowering positive stimulus developments from China.

US Oil Demand in the Summer Surprises to the Upside. According to EIA data, US oil demand rose in July to the highest seasonal level since 2019, rising 1.2% from June to a total of 20.48 million b/d, driven by a post-pandemic peak in jet fuel demand and seasonal highs in gasoline and diesel.

Mexico Ships Its First Ever Export LNG Cargo. US LNG developer New Fortress Energy (NASDAQ:NFE) has shipped the first-ever export of liquefied gas from Mexico from its 1.4 mtpa capacity Altamira plant, with the Energos Princess carrier sailing towards a yet unknown European destination.

Libya Agrees on New Terms for Central Banks. Libya’s eastern government based in Benghazi agreed earlier this week to approve the nomination of Naji Mohamed Issa Belqasem as governor of the central bank, potentially paving the way for the gradual lifting of the oil embargo that’s still in place.

Siemens Turn Too Competitive. The US Justice Department fined the American subsidiary of Germany’s industrial giant Siemens Energy $104 million over alleged misappropriation of confidential information from GE and Mitsubishi Heavy Industries to win a bidding process for a gas turbine plant in Virginia.

OPEC Members Vie for Disputed Islands. Two African OPEC members, Gabon and Equatorial Guinea, have started legal proceedings at the International Court of Justice over the maritime delimitation of two small islands in the Gulf of Guinea, Cocotier and Conga, believed to contain untapped oil reserves.

Iron Ore Spikes on Easier Chinese Homebuying. Iron ore futures rose more than 10% this week after Shanghai, Guangzhou, and Shenzhen loosened rules on home buying, including lower downpayment ratio and laxer mortgage refinancing rates, sending Singapore benchmark prices to $110 per metric tonne.

The Fight Is On for Citgo Assets. Amber Energy, an affiliate of private equity group Elliott Investment Management, has been selected as the top bidder in an auction for Venezuelan-held US refiner Citgo, with a bid of $7.286 billion, expecting to keep the brand and close the deal by mid-2025.

French Major Eyes Pioneering Suriname Project. France’s energy major TotalEnergies (NYSE:TTE) is set to kickstart Suriname’s first-ever offshore project, the $10 billion Gran Morgu development located in Block 58 some 140 km off the coast, tapping into some 700 million barrels of oil equivalent.

Japan Wants LNG Deals Destination-Free. Japan’s LNG importers have asked the Tokyo government to help negotiate better terms on long-term supply deals, potentially lifting strict destination clauses on Qatari exports as recent terms on the latter’s recent deals with Germany are believed to be more flexible.

Britain Becomes First G7 Nation to Fully Shed Coal. The country that industrialized coal, the United Kingdom shut down its last coal-powered thermal plant in Ratcliffe-on-Soar this week, becoming the first G7 country to fully shed coal energy and ending over 140 years of coal generation in the country.

Israel Attacks Yemen’s Key Port. Israel attacked oil storage units and energy infrastructure at the Red Sea ports of Hodeidah and Ras Isa in Yemen the day after Israel’s assassination of Hezbollah leader Hassan Nasrallah, raising the geopolitical risks of further escalation in the Middle East.

White House Ramps Up SPR Buying Before Election. The US Department of Energy bought 6 million barrels of oil for the Strategic Petroleum Reserve for delivery through May 2025, with more than half coming from ExxonMobil (NYSE:XOM) as well as smaller volumes coming from Shell and Macquarie.

Australia Cuts Met Coke Outlook for 2024-2025. Australia cut its projected metallurgical coal exports for 2024-2025 by 6% to 161 million tonnes, down 9 million tonnes from the previous forecast, prompting a rally in Australian coking coal prices as they gained $30 per metric tonne last week and rose above $230/mt.



This morning as I type, off day.



Been talking about it for a while: Hedge Funds are the current buyers of UST paper. They like the short end.



So I'm off to work shortly. Wanted yesterday to open a position in MSTR. Couldn't get the fill. Today it's off $10. C'est la vie.



China still moving higher.

Rotation?

jog on
duc

 

[ducati916]

One of the best measures of living standards and real GDP growth is electricity consumption.Since electricity is difficult to store in large quantities, electricity generation tends to be a reasonable proxy for electricity consumption.



Numbers that have not been fudged.





I hate the phone. No ******* way I use glasses. LOL.



Numbers fudged?



Market seems a little 'toppy' to me. But with the Treasury and Fed combining to provide increased liquidity, the bears will always have a bit of a tough time.



Why would you actually trade the VIX?





But wait...there's more!

pg2.

 

[ducati916]

So despite Yellens best efforts, USD having a moment. Looks like a good place to get short.



China: LOL. All humour aside, this is a serious signal. China is signalling for Chinese capital to repatriate. If it does, in size, that could be a sell-off in US equities/debt. Not good.



Who knows.



So I have been up quite early today working for some fills.

Filled: META (Zuckerberg trade), MSTR (Saylor trade), AVGO (alternate sign the t1ts trade), So Zuckerberg I blame for dumbing down the entire globe with FB. Saylor I kind of admire, to go all in on 1 trade (BTC) highly leveraged with debt, could be a genius move and of course who doesn't want to be a rock star and sign titties.

They are all volatile. If the market does have a moment, I would expect these 3 to have a moment ++.

The US election is 5 November. Both are underwhelming. Neither sees nor even if they could see, can do anything to rescue the US from its demise via debt in the short term.

jog on
duc

 

[ducati916]

Last month.



Moving towards bear positioning



Complacency in bond market bottomed. Pick up in vol.



I would also add to the mix the longshoreman strike. As each day passes the cumulative damage to GDP mounts. This is the same effect that covid supply breakdowns had. Not too much mention currently, other than people are again panic buying toilet rolls. Oh and coffee.





Yellen will need to sell more short end debt. Will the Hedge Funds buy? Their balance sheets are far smaller than China, the commercial banks. Will the Fed have to step in to monetise? It will come to a crisis point. When is the question.



Meanwhile:



Pretty nowhere sort of day.





jog on
duc

 

[ducati916]

Oil News:

Friday, October 4th, 2024

Oil prices are set to post a solid $6 per barrel week-on-week increase as ICE Brent futures entrenched themselves around $78 per barrel. Iran’s missile barrage on Israel and a potential retaliatory action from the Netanyahu government boosted the geopolitical risk premium, in fact so much that the oil markets didn’t even notice the lifting of Libya’s oil embargo, returning some 700,000 b/d of crude to the market.

Libya Reopens After Haftar Lifts Oil Embargo. Libya’s Benghazi government announced that it would reopen all oil fields and export terminals after a protracted dispute over the Central Bank’s operations and staffing was resolved, with the new bank governor Naji Issa approved by both rival governments.

Israel Restarts Gas Fields After Iran Attack. Gas production from Israel’s Leviathan and Tamar fields has restarted after a one-day shutdown prompted by Iran’s large-scale missile attack, with US oil major Chevron (NYSE:CVX) reporting there was no physical damage to the Leviathan platform and the 22 TCf field.

Kazakhstan Continues to Defy OPEC+ Quotas. One of the most notorious overproducers of OPEC+, Kazakhstan produced 6.55 million tonnes of oil last month, equivalent to 1.64 million b/d, suggesting that the Central Asian country’s vows to curb output have failed as it exceeds its quota by 170,000 b/d.

US Dockworker Strike Ends After Three Days. US dock workers and port operators have reached a tentative deal for a wage hike of 62% over six years with the USMX employer group, ending a debilitating three-day strike that shut down shipping on the US East and Gulf Coast.

OPEC Calls Out Wall Street Journal. In a rare move for the market, OPEC issued a statement denouncing a Wall Street Journal article that alleged Saudi Arabia’s oil minister warned of oil prices dropping to $50 per barrel if the oil group’s members do not stick to production targets, calling it ‘inaccurate and misleading’.

Middle East Buys Up Europe’s Industrial Giants. ADNOC, the national oil company of the United Arab Emirates, has entered into an investment agreement to buy Germany’s chemical giant Covestro in a deal worth €11.7 billion, assessed at a premium of 54% over the firm’s pre-announcement share price.

IEA Sees Natural Gas Demand Soaring to Record Highs. The International Energy Agency expects global demand for natural gas to rise faster than in the past two years and move record highs in both 2024 and 2025, with the pace of demand growth accelerating to 2.5% this year, reaching 4,200 bcm overall.

Petrobras Doubles Down on South Africa. Brazilian national oil company Petrobras (NYSEBR) is set to purchase a 10% stake in TotalEnergies’ DWOB offshore block in South Africa, abutting the French major’s Namibian deepwater acreage that saw the discovery of the multi-billion-barrel Venus prospect.

US Renewable Diesel Capacity Collapses in the Summer. US renewable diesel capacity plunged in July, falling by almost 300 million gallons/year to 4.60 billion gallons/year, with Vertex Energy filing for bankruptcy, Chevron shutting two biodiesel plants and Delek also idling three of its renewable fuel plants.

Colombia’s Permitting Woes Delay Deepwater Drilling. The offshore drilling rig slated to spud the first exploration well in the untapped Col 1 block held by Occidental and Ecopetrol, aiming for the Komodo-1 prospect, is now leaving the country after the country’s environmental agency did not provide a permit to drill.

Trump to Ban EV State Mandates Once Elected. Republican presidential candidate Donald Trump promised that no state will be able to ban gasoline-powered cars or trucks once he’s elected, potentially even ending EV tax credits as he’s looking to win votes in Michigan, home to the Detroit Three.

Venezuela’s Exports Dip Lower on Outages. Venezuela’s crude and fuel oil exports declined 9% month-over-month in September, as two large electricity blackouts and equipment outages hindered normal operations, seeing outflows dip to 842,600 b/d, of which 212,000 b/d was lifted by US major Chevron.

Malaysia Tests Chinese Patience with Offshore Drilling. Malaysia is expanding offshore oil and gas exploration in the disputed South China Sea with Chinese coast guard vessels seeking to disrupt appraisal works at the Luconia Shoals, a group of submerged reefs some 80 miles northwest of Borneo.

Mr FFF

Pervasive Trend: Morning Fades​

Fri Oct 4, 2024 11:29am EST 0


People often ask me why I sell everything at the opening tick and here is why.



Look at the price action from 9 to 11am.


Some of the declines are extremely deleterious, ranging with 1% drops in a single hour.

Whilst it’s true, turning over an account 1,000% in a year isn’t exactly tax efficient, it’s also true that losing money isn’t either. These pervasive trends make it difficult to hold morning rips and because of this I will continue to fade the morning rips.

At any rate, I am 100% cash, +93bps for the session, now sitting with YTD gains in excess of 19%. Some people also ask me why I am showcasing pedestrian returns for the year and if you don’t know by now the answer is transparency. A 19% gain, regardless of what markets are doing, is a spectacular annual return to compound my account by. If you look at the Barclay’s hedge fund index, that’s up just 9.4% YTD, meaning the highest paid and most aggrandized PMs are barely up double digits. That is not to bedraggled them any more than already needed; but the point is to demonstrate a process I take and to show the good with the bad because that’s what trading is.

Bear in mind, this account was started at $100k in 2020 and this is where it is now, utilizing zero options or futures and with position sizes of 2 to 6%, many times in cash and often hedged to withstand the barrage of sell orders that comes every so often.



I’d tell you “if I could do it so could you” but that’s simply not the truth, as I am genetically superior to you and possess innate skills that permit me to function at a very high level.

GOOD DAY.

A lot of noise, not a lot of signal. Markets are just churning currently. PUT/CALL ratio falling, MOVE higher, VIX a bit lower. Positions up one day down the next: net zero for this week.

Markets remain in bull mode on the charts. Economic data, ostensibly good. Sectors: half higher, half lower on the week. Meh.

So I have been taking some profits in XLE. Oil (I believe) will remain fairly rangebound between $90 and $70. The reason being that US shale needs at least $70 to remain profitable and in excess of $90 the US economy starts to struggle badly.

I opened some new positions this week in January 2027 Options expiry's. The MMs with an Open Interest of 1 or in one case 5 have been playing games, opening the spreads $4 wide, pricing at the Ask, etc. So looking at a lot of red ink currently.

jog on
duc

 

[ducati916]

Predicted from last week:



What actually happened:







jog on
duc

 

[ducati916]

For next week:



CPI no longer a thing. Could become a thing again. Will become a thing again.



Mildly bullish for the week +1. Markets look to be a little toppy.





Still in the middle, but again heading bear.





On a run higher. Not what Yellen wants or needs.



10yr moving higher. Almost 4%.

https://www.wsj.com/business/autos/ford-china-ev-competition-farley-ceo-50ded461

"Jim Farley had just returned from China. What the Ford CEO found during the May visit made him anxious: The local automakers were pulling away in the electric-vehicle race.


In an early-morning call with fellow board member John Thornton, an exasperated Farley unloaded.


The Chinese carmakers are moving at light speed, he told Thornton, a former Goldman Sachs executive who spent years as a senior banker in China. They are using artificial intelligence and other tech in cars that is unlike anything available in the U.S. These Chinese EV makers are using a low-cost supply base to undercut the competition on price, offering slick digital features and aggressively expanding to overseas markets.


“John, this is an existential threat,” Farley said.


In the span of a few years, Chinese EV maker BYD, backed by Warren Buffett, and other domestic brands have clawed away gobs of market share in China from once-dominant foreign rivals, through a combination of lower prices, high-tech interiors and rapid vehicle updates. Today, they are quickly expanding in Europe, the Middle East and other Asian markets.


In the U.S., carmakers see EVs as their future, but for now, EV sales growth has slowed, as high prices and charging hassles turn off some shoppers.


Chinese brands have so far been kept out of the U.S. by steep tariffs, geopolitical tensions and regulatory hurdles. But some have established a toehold in Mexico, where China-built vehicles—both EVs and combustion-engine vehicles—now account for about 20% of sales.


Governments around the world are worried about China’s EV expansion, citing everything from potential job losses to data-security concerns. In the European Union, where Chinese imports make up about one-fifth of electric sales, regulators recently disclosed plans for tariffs up to nearly 50%. The Biden administration went further with a roughly 100% tariff. "



From NY Times: https://www.nytimes.com/2024/09/30/opinion/american-businesses-china.html


Apple, though still widely admired in China, is losing market share in smartphones and encountering political headwinds. While Apple has tried to remain in the good graces of the government, Chinese agencies and government-backed firms have banned their employees from bringing iPhones and other foreign devices to work. Jon Stewart’s show on Apple’s streaming service ended last year partly because potential show topics related to China and artificial intelligence were causing concern among Apple executives, The Times reported.


Apple has made moves to reduce its reliance on Chinese sources for parts but has made little progress. Nikkei Asia reported in April that Apple increased its use of parts from China-headquartered suppliers and Chinese manufacturing sites in 2023, while using fewer suppliers from Taiwan, the United States, Japan and South Korea. Apple said in March that it was expanding a research center in Shanghai and opening a new lab in Shenzhen, the tech hub near Hong Kong.


Why is this important?

1. USD and EUR are overvalued against CNY resulting in loss of market share.
2. China is moving up the value chain in goods manufactured
3. What happened when the last hegemon (Britain) suffered in this way? 30yrs of war including WWI and WWII.

Chinese stimulus means the above on steroids. Which is why Chinese stocks went parabolic last week.



They are not coming back. This is similar to March 2020 when the Fed announced bazookaville. US stocks just took off and never looked back.

The issue is as I have already alluded to is: China has $5 Trillion in US stocks. What if that $5T decided to go home where currently valuations are a fraction of what they are in the US?



That is a 9% decline.

Does other foreign hot money follow?



That's another $10 Trillion.

In total a 27% decline.

Who fills the hole?

The Fed.

What would a 30% decline do to tax revenues? They would collapse. Bring in the Fed to monetise debt to cover the shortfall of exploding deficits. Meanwhile the US is fighting a proxy wars in Ukraine, the Middle East and what happens to Taiwan?

Remember the Chinese story about manufacturing?
China manufactures most of US weaponry. LOL.

Meanwhile US stocks are at all time highs. Valuations blown way out. Cause for concern or prudence? Buffett cannot sell fast enough.


So 2 stocks that I am looking at for next week: GILD and CRM.

Mr FFF

Assessing Current Rotations in Equities​

Sat Oct 5, 2024 12:15pm EST 0


Another day passes by in the grandiose life of Le Fly, partaking in all sort of stock market winships, whilst at the same time subjected to Mrs. Fly oriented house chores. On the agenda today is the old cleaning out the garage and some “light gardening”, which will entail power washing and tending to the gardens and all matters of things swirling in her brain. I could simply decline these tasks and tell her “do you have any idea who I am and what you ask of me?” but that would not be a good intermediate term investment for yours truly, as I would almost assuredly fall prey to Mrs. Fly reprisals.

Before I delve into the market, I first wanted to chastise the bears out there for being so stupid and viewing the market through the prism of politics. The market isn’t the Biden administration, or the Fed for the matter. Well, maybe it’s a little bit of the Fed. But my point is, the market is a game and to play this game correctly you need to check your hubris and your bias at the door, else remain, inexorably, retarded.

I am now going to highlight some of my proprietary technical algorithms for some major sector ETFs and respective time frames. What I am trying to communicate to you, a largely moronic audience of grifters and spendthrifts, is factual evidence of rotation.

1 Week Algo (worst 0 to 5 best)
$KWEB 4.17
$IBIT 1.84

2 Week Algo
$KWEB 4.05
$XBI 2.27

1 Month Algo
$XLU 3.52
$XLE 2.39
$SMH 2.42

3 Month Algo
$XLRE 3.31
$XLE 2.29

6 Month Algo
$GDX 3.24
$JETS 2.45
$XLE 2.45

YTD Algo
$SMH 3.19
$KWEB 2.49

1 Yr Algo
$SMH 3.11
$KWEB 2.43

See how I just gave you some holy grail level information and it did nothing for you? It’s like banging on a ******* gong, producing nothing but a giant annoying echo, shades of the orient.

Look pal, I have things to do, lawns to maintain.

Ciao.

Listen to me,

These are the very best of days in the market. If you are cavorting the market place in puts, straddled in burlap cloth attire and only interested in gold, you should go **** yourself. This is a BULL MARKET and only men are allow to trade it.

What do I mean by that?

Women should refrain from partaking and instead go into the kitchen to bake pies.

There are two types of people in this market, those who made +134bps for the session and those who did not. I feel sorry for you. I really do. But the truth of the matter is, this is as good as it gets and you’re too stupid to figure it out.

It sort of reminds of a conversation I had with a good friend recently who thought Kirkland’s ground coffee was “the best” coffee out there. I sort of chuckled and said “I’d send you some quality beans to taste what good coffee really is, but you wouldn’t know the difference.”

Do you know what I am saying?

There is only one Señor Tropicana, the rest of you are simply existing in my program.

Good day.





jog on
duc

 

[ducati916]

Picking up on the demise of Great Britain through two world wars and war generally:









Interesting. Hat tip to Capt. Chaza for the idea.

jog on
duc

 

[ducati916]

The lesson taught and largely learned: Buy-the-Dip. Courtesy the Federal Reserve.



Picking winning stocks is not easy otherwise everyone would be rich.

What the chart shows​

This chart tracks unemployment trends from January 2019 to August 2024 for all 50 states in the US as a group. It highlights whether their unemployment rate has increased, decreased or remain unchanged compared to the previous month. According to the latest data recorded, 31 states experienced an increase in unemployment, five saw a decrease, and 14 had no change.

Behind the data​

The US jobs market is showing signs of softening. The national unemployment rate has climbed from a low of 3.4% in 2023 to 4.2% as of October 2024. This increase has not been spread evenly across states. Rhode Island, South Carolina and Ohio have seen the largest increases in their unemployment rate over the past year, each climbing by more than a percentage point. Conversely, unemployment rates have fallen in Arizona, Mississippi, Connecticut, Wisconsin, Iowa, Maine, Tennessee, Arkansas and Hawaii.

Given that promoting maximum employment is one of the Fed’s dual mandates, continued labor market deterioration could prompt more aggressive interest rate cuts from the Federal Open Market Committee (FOMC).

What the chart shows​

This chart compares global trade growth with key shipping rate indices to highlight the relationship between global trade activity and fluctuations in shipping costs, which can serve as a key indicator of supply chain pressures.

Behind the data​

Shipping has become a major issue in recent years, impacted by events such as the pandemic, the Suez Canal blockage, and now the latest concern: the International Longshoremen’s Association (ILA) strike. Nearly 50,000 ILA members have walked off the job, halting operations at ports along the East and Gulf Coasts. This disruption has affected the flow of a wide range of goods, from perishable items like bananas and European alcohol to cars, furniture and industrial parts, potentially leading to shortages and price hikes. While many holiday goods have already been shipped, continued delays could drive up prices for perishable products and other imports, further straining supply chains and fueling inflation.

What the chart shows​

This chart displays the daily return correlation over the past year between MSCI US and European sectoral indices and crude oil prices (WTI and Brent). It highlights sector sensitivity to oil price movements and shows how crude oil may impact sector performance in the US versus Europe.

Behind the data​

The results show strong positive correlations between energy sector equities and crude oil returns in both the US and Europe, with coefficients ranging from approximately 0.5 to 0.6. In contrast, other sectors exhibit relatively low correlations with crude, with some showing small positive or negative coefficients. While crude prices play an important role in energy stock valuations, they appear to have little influence on most other sectors.

What the chart shows​

This table presents a heatmap comparing the year-to-date (YTD) and recent performance of various hedge fund strategies – such as absolute return, multi-strategy, systematic diversified, market directional, multi-region, and fundamental growth equity – against global equity benchmarks.

Behind the data​

The heatmap reveals that these hedge funds have generally underperformed stock benchmarks like the S&P 500, MSCI World, and MSCI EM indices, possibly driven by factors such as the rise of AI, the resilience of the US economy amid recent softening, continued Fed’s accommodation, and renewed stimulus from China.

So, despite being exposed to higher risks, hedge funds did not necessarily outperform equities during this period.



Mr FFF

Hurricane Milton is en route for Florida, once again reminding citizens of Florida what a stupid state they live in. If not getting wiped out by ‘Canes, they’re getting CHASED AND KILLED by alligators or their faces eaten off by Miami Zombies. I can see how one might want to own a winter home in Florida, to escape the pangs of bone shattering frost. But to live there is another story, totally contemptible behavior choosing to live in the swamp amongst the gators and snakes. To choose Florida as your primary residence, it takes a certain type of person if you know what I mean: a gypsy land traveler without roots to proper areas of the nation.

As for markets, we have BIG SPIKES in crude oil, treasury bond yields and lithium. The fact the US 10yr is above 4% speaks to the hilarity of you losers attempting to buy bonds into a rate cutting cycle: TRICKED AND FOOLED again. This was a crowded traded and now you’re at zero.

The rallies in oil is intriguing and might signal a larger scale rotation into oil during the seasonally excellent period of time for the commodity.

Lastly we have $LAC and other lithium stocks taking off. I took profits on everything at the open and locked in +32bps of gains, which is better than the losses you’re sitting on now. I do see Chinese stocks flying and other low brow denizens of ill repute. I will not be lured back into the vipers pit just so that markets can red candle me to death. Since I have chores to do, people to speak to, I will remain in cash until later on.

From reading the Silver thread, there seems to be a belief that the US will win in Ukraine:

Footage Confirms Two More U.S.-Supplied Abrams Tanks Destroyed by Russian Forces in Pokrovsk

Recent footage has confirmed the destruction of two further M1A1 Abrams tanks operated by the Ukrainian Army, following a series of consecutive losses for the scarce

militarywatchmagazine.com

At close to 70 tons, and in some configurations closer to 80 tons, the Abrams is one of the heaviest tank classes in the world and carries significantly more armour than most other tanks.


The first deliveries of the vehicles to Ukraine in September 2023 fuelled widespread projections in the Western world that they would provide overwhelming superiority over Russian armour and allow Ukrainian units to may important breakthroughs - potentially even spearheading an assault on the Crimean Peninsula.


Over 20 of the 31 tanks delivered to Ukraine are now thought to have been destroyed, disabled or captured, with at least one of the kills having been achieved by a Russian T-72B3 tank after the two exchanged fire in the first week of March.


The vehicles were notably deployed to the frontlines only after almost five months in Ukraine, with the tanks first seen deployed on February 23. The first loss of an Abrams tank was then confirmed three days afterwards. After multiple further losses in February and March, the Ukrainian Army in late April withdrew its remaining Abrams tanks.


Losses have remained high, with some recent kills confirmed on July 30, on July 3, and previously in early May, all of which saw the vehicles filmed being destroyed by guided artillery. A more recent kill on August 11 was filmed being achieved by a drone.



Who is Jake Sullivan? He is the National Security Advisor. LOL.

From Robert Gates:

https://www.washingtonpost.com/opinions/2024/09/24/robert-gates-peril-china-russia-pentagon-congress-defense/

The US dollar is backed by the US Military. Oh dear.

Perpetual war has bankrupted the US. They are not losing, they have already lost. Empires don't die overnight, they take decades to roll over into obscurity: Rome, Great Britain, etc.

As such, the USD and UST are un-investable. Gold is a zero coupon perpetual bond. The allocation in a 60/40 portfolio would have gold replace the bond component. For the really brave or risk seeking you could add in BTC.

The question is: can the powers that be, Treasury & Fed, avoid a recession? From previous charts it can be seen that stocks suffer their worst drawdowns during recessions rather than war. War is inflationary and can be a boon to stocks as long as it does not break loose into a hyper-inflation. Even then, nominal gains can be made, although real returns are zero or slightly negative, but much better than the currency.

The unemployment data from individual States is not good. Much of the improvements claimed come from government jobs. This is not progress.

The longshoreman's strike, will if it continues, increase inflation (which is good for the Treasury) and nominal GDP.

Oil prices are still jumping. The US needs them to stay in the $70-$90 range. Outside that range bad things start to happen. Currently at $77/barrel. Not a problem yet and good for shale production which is looking a bit shakey (more later). But bad for everyone else if they keep moving higher.

USD on the move, but looks to be topping out? Yellen really needs this lower. She has many levers to pull to force it lower. Market forces will also drive the USD lower. This is a short that will last years as a trend.


jog on
duc

 

[ducati916]

China puking!

jog on
duc

 

[ducati916]

All about the crypto:



Catching fire again?



Rates don't matter?

Repo rates however do matter





You can see the spike...but all good.

The Repo market is a critical watch. Don't worry, I'm watching.

Mr FFF



Oil News:

China’s announcement of more economic stimulus to the country’s ailing real estate sector was well-timed, ahead of a week-long public holiday, however as normal business activity recovers in the country, the market faces further disappointment.

- Following the Tuesday briefing held by China’s National Development and Reform Commission, the country’s policy planner, iron ore futures plunged by more than $5 per metric tonne to $105/mt as the NDRC failed to provide specific stimulus steps ahead.

- Particularly, China seems to be taciturn on the pace of clearing its massive housing inventory, currently assessed at 43 million units with a further 8 million under construction, considering annual sales remain rangebound around 8 million units per year.

- Before the NDRC briefing, iron ore futures were soaring and added 18% over the past two weeks, with similarly robust gains seen across the base metal segment.

Market Movers

- According to market rumors, UK oil major BP (NYSE:BP) is set to abandon its 2030 target of cutting oil and gas output by 40% under new CEO Murray Auchincloss, eyeing new upstream opportunities in Iraq and Kuwait.

- Norway’s state oil company Equinor (NYSE:EQNR) bought a $2.5 billion stake in Denmark’s wind farm developer Ørsted, taking a 9.8% minority stake and becoming the second-largest shareholder after the Danish state.

- UK-based energy major Shell (LON:SHEL) won the bidding process for the coveted shallow water Block U in Trinidad and Tobago, beating BP and EOG Resources for the presumably gas-rich acreage.

Tuesday, October 08, 2024

The oil market was on a knife's edge all weekend and early this week, with traders awaiting Israel’s riposte vis-à-vis Iran, but when no major supply disruption came, both WTI and Brent fell, with Brent breaking below $78. If there is no large-scale strike on Iranian oil infrastructure, prices could fall even further, with Libyan supply coming back online and Chinese demand yet to materialize.

China Disappoints as Imports Fail to Recover. According to Kpler data, China’s crude oil imports averaged only 10.8 million b/d in September, a more than 500,000 b/d decline compared to August numbers, indicating that even the promise of economic stimulus did not lift the country’s buying activity.

Europe’s Hydrogen Ambitions Weaken Further. One of Europe’s most ambitious hydrogen infrastructure projects, the cross-border pipeline between Denmark and Germany, has been postponed by three years to 2031, with seemingly little industry interest to book term capacity.

Everyone Wants to Market Guyana’s Oil. According to Guyanese government agencies, a total of 27 bidders have applied to market Guyana’s share of crude oil produced at the ExxonMobil-operated Stabroek block, equivalent to 33 shipments per year, pitting Exxon, Chevron, BP and Total against one another.

Libya Quickly Recoups Production Losses. Libya’s production rates are recovering after the month-long oil blockade, with current output nearing the 1.2 million b/d peak production level as Bloomberg reported that most of shut-in wells have been restarted and production hit 1.067 million b/d.

Norway’s New Oil Project Costs Balloon. Norway’s 2025 budget shed light on the country’s runaway project costs as the upcoming Johan Castberg project is now expected to cost $8.1 billion compared to its initial assessment of $4.6 billion, whilst Aker BP’s Yggdrasil skyrocketed to $12.6 billion.

Hurricane Milton Triggers Platform Evacuations. Even though the upstream impact of Hurricane Milton is expected to be less than that of Francine and Helene, US major Chevron (NYSE:CVX) has pre-emptively shut its 65,000 b/d Blind Faith platform some 150 miles southeast of New Orleans.

Mining Giants Set Sights on Lithium Expansion. Prompted by low lithium prices, Australia’s mining major Rio Tinto (NYSE:RIO) has approached lithium producer Arcadium Lithium (NYSE:ALTM), itself the result of the recent Allkem-Livent merger, in a deal that could be valued between $4 and $6 billion.

Chevron Cuts Down on Canada Ambition. US oil major Chevron (NYSE:CVX) agreed to sell its assets in Canada’s Athabasca Oil Sands and Duvernay Shale to Calgary-based Canadian Natural Resources (TSO:CNQ) for $6.5 billion, shedding assets that produced some 84,000 b/d of oil equivalent in 2023.

Colombia Celebrates Giant Offshore Gas Discovery. Partnering up with Brazilian offshore specialist Petrobras (NYSEBR), Colombia’s state oil firm Ecopetrol (NYSE:EC) announced the discovery of a giant 6 TCf gas field with its Sirius-2 well, more than doubling the nation’s 2.4 TCf current reserves.

US Jet Fuel Demand Reaches 23-Year High. According to US BTS data, the consumption of jet fuel by US airlines in August rose to the highest for the month in 23 years, a total of 1.69 billion gallons that is 1% higher than last year’s tally, with average jet fuel costs averaging $2.47 per gallon over the month.

Panama to Decide on Its Copper Future in 2025. The government of Panama is set to decide on the future of the giant Cobre Panama copper field next year, with the project equivalent to 5% of global production before its forced shutdown, after the Supreme Court ruled that First Quantum’s contract was unconstitutional.

Kazakhstan’s Nuclear Ballot Paves Way for New Plants. The Central Asian nation of Kazakhstan held a referendum on the construction of nuclear power plants in the country, and with 71% of the electorate voting affirmatively, the world’s largest uranium miner should soon start working on new capacity.

Russia Eyes Diesel Export Ban for Traders. The Russian government has held preliminary negotiations with its oil companies to decide whether firms that do not produce diesel should be banned from exporting middle distillates, with diesel exports averaging 920,000 b/d so far in 2024.

jog on
duc

 

[ducati916]

Have to be fast, early start at work.



Tons of housing data that I don't follow too closely atm. If that's your thing, the spread between mortgage rates and 10yr UST is a thing. Housing market is important, but just dull unlike in 2008 when it was collapsing.

The issue this time round is sovereign debt, not mortgage debt. The mortgage debt fiasco was kicked up to the sovereign debt level.

jog on
duc

 

[ducati916]

End of Bull markets have lots of speculation:



Full: https://www.bloomberg.com/news/articles/2024-10-06/-100-yields-fuel-a-retail-boom-in-quick-buck-etfs



Full: https://www.ft.com/content/f7cb25ba-7329-4291-b7d3-8a34ef84f9f0



Full: https://behaviouralinvestment.com/2024/10/08/the-noise-factory/



Mr FFF

Perusing Hourly Trends​

Thu Oct 10, 2024 12:29pm EST 0


When day trading, timing is everything. If you buy into a big up day just before a minor pullback, you might find yourself BOGGED for the entire day without any hopes of respite. Having the data available can buttress assumptions or feeeeeeelings, providing you with a strategy to work from.

Case in point: the ******* recent trend of dumping out at the open is also paired nicely with large upwards movements from 11am to 12pm.




A 45bps move in a single hour is massive. If you notice by the graph above the 3pm hour also provides a nice return for longtards. These trends, however, are subject to violent change and are pervasive now because of quants and other various factors. At some point we might see a reversal of these trends, so don’t think it is the holy grail.



Full: https://www.zerohedge.com/markets/wall-street-reacts-todays-hotter-expected-cpi-report-0



Churning market this week.



10yr. WTF. I thought inflation was dead? LOL.

I remember having conversations with traders back in 2005 about the housing market. That it was a fraud, that it was going to crash. Which it did. Only it took another 3yrs and the market just traded higher.

Same thing today.

There is a sovereign debt bubble, worldwide. It will unwind or burst. But they will fight it with outright fraud to the very end and beyond.

This is not a true bull market. This is a bull market rising on liquidity and fraud. But you can't be short because it will continue to rise and rise and rise. Eventually and possibly suddenly, it will stop. The difficulty will be recognition and avoiding the BTD conditioned response.

In 2008 some British billionaire, I forgot his name, smart chap, bought Bear Stearns when it dropped from $400/share to $300/share and he bought a ton of it.

Result?



jog on
duc

 

[ducati916]

Oil News:

Friday, October 11th, 2024

Oil markets were anticipating an Israeli retaliatory strike on Iran all week and as time progressed and nothing happened, some of that disappointment nudged Brent futures lower, settling this week just below the $79 per barrel mark. As devastating as Hurricane Milton turned out to be for Florida, its oil-related impacts were relatively minor, allowing macroeconomics to play a more notable role in setting the tone of the week, especially on the back of US inflation dipping to an annual rate of 2.4%.

Oil Majors Signal Q3 Profit Weakness. UK oil major signaled a $500 million drop in refining margins and a weak performance from oil trading into its Q3 earnings, whilst its peer Shell quantified the decline in refining profit margins at 30% quarter-on-quarter, down to $5.5 per barrel compared to $7.7 per barrel in Q2.

Metal Markets Zoom in on Chinese Policy. Following the disappointing NDRC briefing earlier this week, copper prices rose slightly to $9,770 per metric tonne in anticipation of the Saturday briefing held by China’s Finance Minister Lan Foan, expecting clearer policy guidelines on Beijing’s infrastructure investment.

ExxonMobil Locks in Offshore Acreage in the Gulf. US oil major ExxonMobil (NYSE:XOM) said it purchased state leases for over 271,000 acres in Texas state waters for an offshore CO2 capture project, a year after it bid for 69 blocks in the shallow waters of the US Gulf of Mexico in the last lease sale.

Houthis Start Striking Russian Tankers. Yemen’s Houthi rebels claimed responsibility for a missile attack on Olympic Spirit, a chemical tanker carrying vegetable oils from Russia, striking it with at least four projectiles, simultaneously striking a container ship called St John sailing in the Indian Ocean.

Rio Tinto Clinches Its Lithium Megadeal. Australian mining giant Rio Tinto (ASX:RIO) confirmed it had reached a deal to buy Arcadium Lithium (NYSE:ALTM) in an all-cash deal for $6.7 billion, and its purchase of the world’s seventh-largest producer would propel Rio to the top of lithium producers globally.

East Timor Lures China to Lead Its Upstream Revival. The government of East Timor is reportedly negotiating with Chinese companies including Sinopec (SHA:600028) to develop its stalled Greater Sunrise gas field, containing some 5.1 TCf of natural gas, seeking to overcome Australia’s intransigence.

JPMorgan Warns of Metal Stocks Plunge. US investment bank JPMorgan warned that mining stocks could face a valuation drop of up to 20% if US tariffs are to be imposed after the November presidential election, potentially repeating the 10% plunge that took place in 2017-2018 after Donald Trump took office.

Libya Finally Returns to Pre-Embargo Output Levels. Libya’s total oil production reached 1.22 million b/d by the end of this week, restoring production to levels before the central bank crisis and subsequent oil embargo, with oil exports already picking up and seeing the first Mellitah export in two months.

Mexico Eyes Greater Control Over Pemex. A bill that would grant Mexico’s government greater control over state oil company Pemex was passed this week in the lower house of Congress, changing its status to a public company, and forcing it to prioritize the state’s social objectives over corporate profits.

Shell Suffers Setback as It Demands Transparency. The US Federal Energy Regulatory Commission denied the request of oil major Shell (LON:SHEL) to view non-public commissioning documents of Venture Global’s Calcasieu Pass LNG facility, still unable to obtain contract cargoes from the project.

Nigeria Ditches Costly Fuel Subsidies. Nigeria’s state-owned oil company NNPC has hiked gasoline prices by over 15%, marking the second increase in less than a month and the scrapping of the African country’s costly fuel subsidy, the first time that Nigeria is selling gasoline at market prices ($0.63 per liter).

China Doubles Down on Coal-to-Liquids. China’s state-controlled energy holding CHN Energy has started building a $24 billion coal-to-liquid project in Hami, Xinjiang, expecting the first phase of the project to be operational by end-2027 and increasing CTL output capacity by 50% to 12.2 mtpa.

Malaysia Eyes Launch of Pioneering UCO Futures. Malaysia’s stock exchange is seeking industry feedback on its plan to launch a new futures contract for used cooking oil, a key feedstock in the production of biodiesel, as Kuala Lumpur wants to use its clout as the world’s second-largest exporter of UCO.



Lots of studies looking at the consumer. Meh.

Look at the government. It is they who are bankrupt and the consumer cannot bail them out.



Tax revenues come from the market. The market needs to move higher. Constantly.







I guess they are saying that this has failed. Hmmm. Early days.



Who cares. Does not matter. Compounding interest is winning.






Will be back with the week's wrap up.

jog on
duc

 

[ducati916]

For next week:



From last week:






Mr FFF

Reminder: This is the Best Time of Year for Stocks​

Sat Oct 12, 2024 9:41am EST 0


If I had to choose just two months out of the year to trade it would be Oct and Nov. Since 1999, stocks have risen 76% of the time in November for a median return of 3%. The Turkey Gods are in fact real and trying to impose your bearish sentiments during a time of joy and gluttony is just plain wrong, perhaps evil.



Today Mr Big Shot money manager will drive Mrs Fly to the farmers market for some “fresh organic produce.” I love NC but this place does not believe in organic food. Most of the people here sprinkle some extra Round off on their food after they get it from the store. None of the farms are organic, which is likely some “northern sissy ****” that I’m used to. I suppose I do eat the Monsanto chemicals every time I dine out; but I try to be clean in the way I eat and much prefer to eat at home.

Last week Mrs Fly threw a birthday party for one of my ******* dogs. It was Twinkies 12th and I named her that back when Hostess filed for bankruptcy protection and it had nothing to do with my dog being gay, although I think she is. Largely speaking, Twinkie is a dumb dog and is what people might say is a “dog’s dog.” At any rate, Mrs Fly dressed the dog up and we took her to Home Depot, which is of course her favorite place to defecate. We then treated her to some vanilla iced cream. Since we bought her, Mrs Fly has been cooking grass fed beef for Twinkie and often times her meals are better than mine. Some night’s Twinkie might have steak sweet potatoes and some oats, while I’ll have a burger with salad.

All jokes aside, tending for animals in this way isn’t necessarily a bad thing; but it is a feminine quality, the sort of thing a man would not do. I marvel at the spectacle and do not begrudge Mrs Fly for having a kind heart for animals, which I think says a lot about a person.
Off to walk the ******* dogs.

jog on
duc

 

[Rosscoe62]

A very interesting and useful thread Ducati looking at many informative economic issues collectively from your source/s.

As I’ve discussed and stated before on other threads, I follow the 18.6 year property cycle ->

The 18.6-Year Economic Cycle - What it Means for Land, Stocks and Gold Prices | Ainslie Bullion

Explore the 18.6-year economic cycle and its impact on land, stocks, and gold prices. Learn where we currently stand and what the next phase may bring.

ainsliebullion.com.au

Also as a reference, I follow allstarcharts.com for background information for the state of play in the USA dealing with TA and charting. Latest newsletter ->

They lied to you

The worst humans on the planet have been promising you for years that this was just a "bear market rally".They warned you every day about some made up catastrophic event that was going to occur at any moment.But these people are not that dumb.They were just lying to you.Are you noticing?Here is...

www.allstarcharts.com

As we all probably know, the USA leads us in world economic affairs but more so in the stockmarket and its ongoings here in Australia.

The Australian stockmarket always lags a little way behind the US before playing catchup (remembering of course many of our top companies use franking dividends/credits,,, a little different to the USA — The US doesn’t recognise franking credits – neither as assessable income nor as a tax offset ) …

Our Stockmarket is currently playing catchup right now, with recent highs being broken. Inevitability, the Stockmarket will grind to a halt and dramatically fall at some stage.

We are just about to head into the mania stage of the 18.6 year cycle where there should be frantic madness with money pouring into stocks like there is no tomorrow. But be careful, this phase is relatively short-lived. I’d say to keep a sharp eye on developments come 2026-27, give or take a bit.

My niche and focus is solely on our Stockmarket here focussing on the XKO.

Look at the 3 phases in the 18.6 year cycle mentioned in the link above. We are currently in phase 2 ->

In Phase 2 we find increased liquidity in the system, globally - we see stocks and land continuing to move up while becoming increasingly over-leveraged, with higher price-to-earnings ratios on stocks and increased debt on land. With liquidity flooding into the system, increasing the supply of currency - we find the dollar losing value, with the DXY settling into a downtrend - and hard assets like Gold gaining value, settling into a new secular uptrend. As we move into the final years of Phase 2, the winner’s curse phase - we see the U.S. dollar index (DXY) fall off a cliff; we see stocks and land get over-leveraged and overpriced - unsustainably so; and we see hard assets like Gold and Silver perform incredibly well, in a sustained uptrend.

In the winner’s curse phase, we see investor sentiment becoming overconfident and complacent as all assets move up together - investors can do no wrong, everyone is a “winner”, and their unstoppable winning streak ends up becoming their curse, as risk management goes out the window, they get over leveraged - just in time for everything to come crashing down.

This leads to the final phase of the cycle - the collapse.

Hold on tight because this is going to be a real ride …. I’ll leave it there for all of you to digest.

 

[ducati916]

Let's start with Taleb:





I posted a chart last week showing that stock market declines correlate quite closely with recessions. Assuming that to be true for the sake of this argument, what causes recessions?

So looking at the 2001 recession. The government was actually running a surplus at this time. Which is to say that the government was a smaller part of GDP at that point. Private enterprise was the larger component. When earnings became a thing and there were none, that's when the markets entered a bear phase and government had to step in.

2007 it was the banks that collapsed. The government stepped in.

Currently the government is the largest player in the economy. GDP is goosed via deficit spending, driving debt higher. Will the government default on the debt via not paying interest?

Unlikely, with a currency based on debt (borrowed into existence) if the debt is defaulted on, your currency goes to zero. That is hyperinflation in capitals. You become Zimbabwe.

So it won't be a one time hyperinflation, it will be a slow burn inflation, where investors are tried to be placated somewhat. Essentially again you push the risk curve way out: BTC etc as UST's are going to be destroyed.

This happened in 1949. But what did the market look like in 1949?



It was a fantastic time to earn returns in stocks. This was historically one of the great buying opportunities as GDP grew significantly mitigating the inflationary pressures as government became a larger player (deficit spending) in the economy.

Today:



The starting point is very, very different. Will the outcome reflect that difference?

jog on
duc

 

[ducati916]

USD



Do not want a stronger USD for stocks.



This chart illustrates the decomposition of the 10-year US Treasury yield into its components from two perspectives: risk neutrality and term premium, further broken down into breakeven inflation and real yield from 1999 to the present. It also highlights periods of recession during this timeframe.

Considering the periods of relatively high inflation – both before the Global Financial Crisis (GFC) and after the COVID pandemic – recent risk neutrality and inflation expectations appear close to their historical norms. At the same time, long-term real interest rates have already leveled up.

The term premium shows some upside room, as it was positive pre-GFC but has remained flat lately. This upward risk is also reflected in the heightened bond-implied volatility observed in recent years.

Despite the Fed's easing cycle, upward pressure on bond yields could stem from the term premium.



In late September, the People’s Bank of China (PBoC) announced an ambitious plan to revive the struggling Chinese economy by implementing significant fiscal stimulus. The market’s response was swift, with both institutional and retail investors substantially increasing their exposure to Chinese assets. By the end of September, these inflows had reached their highest level in 2024, signaling a renewed confidence in the country's economic outlook.

However, the inflows were notably sector-specific. While several sectors experienced a moderate uptick in interest, the technology and telecommunications sector attracted a disproportionately large share of the capital. Does this show of investor preference for tech-driven industries reflect optimism about China’s digital economy?



On Tuesday, @RyanDetrick pointed out that the bull market was turning two years old!

After its longest bear market since the Great Financial Crisis, The S&P 500 bottomed on October 12, 2022. In the two years since then, it has gained roughly +61%.

Ryan points out that the average bull market since 1950 has gained about +181% over five years.

On Wednesday, @AlfCharts pointed out that the Software ETF ($IGV) was breaking out of a three-year base after clearing resistance at $89.

It was rejected at $89 twice this year, but the third time appears to be the charm...



$IGV is recovering from its third-worst drawdown on record (-45%), and October has historically been its best month. The top weights in $IGV are;

9.4% - $CRM - Salesforce Inc.
8.8% - $ORCL - Oracle Corp.
7.9% - $MSFT - Microsoft Corp.
7.2% - $NOW - ServiceNow, Inc.
6.9% - $ADBE - Adobe Inc.



On Friday, @DavidZarling let us know that a very important guest has finally arrived at the party.

The iShares Transportation ETF ($YT) had its best day in nearly two years on Friday, jumping +3.7% to an all-time high.

Transports are considered a bellwether group, similar to Homebuilders or Semiconductors. While the latter two have led this bull market, Transports have been absent until now.

The Dow Jones Transportation Average just closed at new 52-week highs. But the index is still below its highs from the prior cycle, while many of the other large-cap indexes in the United States have already broken out above those levels and moved on to higher and higher prices. See: Dow Transports hit new 52-week highs. But when you think about how important it is to equities all over the world that the Dow Transports finally break out of this huge basing period, you wonder which stocks are actually going to drive those returns. Is it going to be the airlines? lol Or could it perhaps be that software stock that was added to the index earlier this year? Here is $UBER breaking out to new all-time highs relative to the Dow Jones Transportation Average:

​

In the Dow Transports, you've got Railroads, Truckers, Airlines and other logistics companies. And now you have $UBER as well. The latest addition to the Dow Jones Transportation Average is already making an impact on the index. Say what you want. Maybe this stock shouldn't be in the Dow Transports. But it is. And it's helping to drive returns for this key market index.

How Bad Can Boeing's Week Get? Surely no one is having a more acute case of the Mondays than new Boeing CEO Kelly Ortberg, with the stock sinking to a new 52-week low below $150 to start the week. A strike by 30,000 machinists just crossed the one-month mark, costing the company an estimated $1 billion and triggering layoffs. In the monthly options series expiring after this Friday's close, traders have stacked their bets at the out-of-the-money October 140 put, with nearly 20,000 contracts in open interest.

​

Stocks are climbing, with the S&P 500 and Dow Jones Industrials posting new all-time highs and the Nasdaq-100 posting a 3-month high. Optimism around Q3 corporate earnings is boosting stock prices after last Friday's strong bank earnings. Trading volumes are below average, with trading in the cash Treasury market closed for the Columbus Day holiday.

Holding UST now is suicide. Compare UST to anything:



Nothing that should surprise there: the rich are fine, the poor are struggling. The employment data largely addresses the middle class who are definitely starting to struggle, but will really struggle if they lose their employment like the 17,000 at BA.







Add in USD top chart and:



Bond market volatility is moving higher.

Which means the Fed and Treasury will need to move aggressively to add more liquidity. If they don't, we will have problems and a hard sell-off in stocks.


Add in:



And you have a perfect storm brewing.

So you need oil to stop going up.
You need the USD to fall.
You need UST 10yr yield to fall

Or

Stocks will fall, hard.

The election is a bit of a wild card. It's not a Black Swan event, after all it's been talked about endlessly and in the end, both are powerless to overcome the math of the situation.

Also the Fed and Treasury are on standby to flood markets with liquidity. Which will work until it doesn't. When it doesn't is the problem. Then we go into free fall. No one knows if that will ever happen never mind a when.

jog on
duc

 

[ducati916]

Got to be quick, early start at work:



As @peter2 mentioned:

Mr FFF

SEMIS DUMP OUT AFTER $ASML EARNINGS LEAKED ONLINE​

Tue Oct 15, 2024 11:09am EST 0


Let me preface this blog by stating some facts, particularly about myself:

I was 100% cash heading into this $ASML leak and felt it was necessary to allay any fears some of you might have about my person being adversely affected by this most unfortunate slide.

Early this morning these ******* numbers leaked online:

3Q bookings EU 2.63B, est. EU 5.39B
ASML CUTS 2025 NET SALES, GROSS MARGIN GUIDANCE
ASML CEO:

“It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness. Regarding Logic, the competitive foundry dynamics have resulted in a slower ramp of new nodes at certain customers, leading to several fab push outs and resulting changes in litho demand timing, in particular EUV”

Umm, excuse me but that’s a 50% drop in bookings. On that news, the $SMH is down over 4% but the overall market is taking it in stride. The NASDAQ is down 150 and WTI is off by 5%, because Israel said they’d bomb Iran, but would spare their oil facilities.

How dare they!

Part of my wants to dismiss these $ASML numbers and continue to pretend all is fine. But what the **** is this all about? Those aren’t small drawdowns in bookings, but disastrous. I went to cash because I was +32bps and +5.4% for October, feeling as if I was being greedy by keeping my money exposed. I was hoping for a severe pullback to buy into, casting myself as a financial super hero in the process.

Let me think about these numbers and see if anything else comes out and get back to you later.

jog on
duc