The Conservative Cave
Current Events => Economics => Topic started by: Ptarmigan on July 21, 2023, 09:29:59 PM
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Tech cools, retail rages and some madness
https://www.zerohedge.com/the-market-ear/tech-cools-retail-rages-and-some-madness
Hot stuff not so hot
The AI proxy, NYFANG, has been the hottest stuff around in 2023. It closed below the 21 day moving average today, by a margin not seen since late April. 50 day is still way lower...
(https://tme2.nyc3.cdn.digitaloceanspaces.com/images/d35e990b025b6b156f2adb89dc75ac7a.png)
Massive tech inflows
The inverse to early 2023. Long tech here is not unique...
(https://tme2.nyc3.cdn.digitaloceanspaces.com/images/abcd5989b1c481c2e734dcd43b19018b.png)
Retail - back with a vengeance
Retail have been very active during the squeeze. Goldman's Marshall and team show the exposion of the high retail sentiment basket. They also point that a big part of the flow has come from options chasing: "... put-call skew in single stock have shown unusually large call option buying pressure."
(https://tme2.nyc3.cdn.digitaloceanspaces.com/images/d92adfa12b817384c76bf171397343e4.png)
Not a typo
Soc Gen's Edwards shows that net interest payments have collapsed, despite the surge in rates. He writes: "Something very strange has happened, and it helps explain the recession’s tardiness."
(https://tme2.nyc3.cdn.digitaloceanspaces.com/images/cebbaafa5eb05284103120abb79ddcb8.png)
(https://tme2.nyc3.cdn.digitaloceanspaces.com/images/d6253290a96c4b7ff15e92fb4b32a712.png)
The madness chart of the day
Impressive chart via Edwards explaining why the recession refuses to kick in (yet). He writes: "We have concluded that a sizeable proportion of huge, fixed rate borrowings during 2020/21 still survives on company balance sheets in variable rate deposits. Companies have effectively played the yield curve in reverse and become net beneficiaries of higher rates, adding 5% to profits over the last year instead of deducting 10%+ from profits as usual . Hence it’s not just ‘Greedflation’ that has boosted US profit margins and delayed the recession. Interest rates simply aren’t working as they once did. It is indeed a mad, mad world."
(https://tme2.nyc3.cdn.digitaloceanspaces.com/images/d72309007c94982d36ff3ae0c93ffe83.png)
Looking at the data, there is something very strange with the economy.
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Yes, but I'm not astute enough to understand what it is.
Any ideas you want to share.
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Yes, but I'm not astute enough to understand what it is.
Any ideas you want to share.
There are discrepancies in the economy. It is wonky.