Bloomberg says that US equities may be flashing a sell signal for first time since late August 2023. Our Doomsday Dozen on Longbow confirms that reading. The signal is at a 97 out of 100. Vol is low, but that can change fast, as we all know. Cue the CPI figure for Jan. It rose 0.3%, more than expected, and so pre-markets are down hard right now. So, 10-yr yields shoot higher. People hoped the Fed would cut in March. Now they’re wondering even about May.
A BofA survey flags that investors have a meaningful exposure to tech and are carrying lower cash levels (4.2%) with reduced macro concerns, per Bloomberg. On a similar note, CNBC reports that the US tech rally might be fueling FOMO in the overall market. Citi noted that bullish momentum has returned to stock futures, with long positioning on Nasdaq 100 futures extended and one-sided (long). If you like to be non-consensus, take note.
A prior MBA estimate got revised upward, and you need to pay attention. Almost 20% of US commercial real estate loans are due to mature this year, up 40% from the prior estimate, per Bloomberg. Hurting loans + high rates = keys being transferred to debt holders = sales at lower prices to get rid of assets = overall valuations coming down = weaker financial institutions that have to mark to market and post data to regulators….you see where this is going…
The US yield curve is only 1 mo shy from its longest inversion ever. So, you get paid more to keep your cash in the bank for a shorter period of time.
Icahn took a roughly 10% stake in Jet Blue. So, customers should expect mgmt to start cutting expenses.
Drivers for ride-sharing platforms (e.g., Uber, Lyft and DoorDash) are planning to strike on Valentine’s Day, according to NBC.
Japan’s equity markets are on a tear. Hopefully you haven’t been short. Nikkei +2.9% (highest since Jan 1990) and Topix +2.12%. At the same time, their economy is going to falter, so you may want to lock in some of those gains. Per Bloomberg, it may slip to the world’s 4th largest on weak yen, aging demographics.
GRANOLAS (GSK, Roche, ASML, Nestle, Novartis, Novo, L’Oreal, LVMH, AstraZeneca, SAP and Sanofi)—the EZ’s Mag 11—actually outperformed the Mag 7 over the past 2 years. That’s because they didn’t suffer as much when rates spiked.
Nvidia’s market value is now bigger than the entire S&P energy sector. 1995 was the year when the entire tech sector became a larger % of the S&P versus the entire energy sector. Alibaba has net cash of $69 bn.
