March 2022 Monthly Letter
While this is a cover letter to a monthly report, the month did end the first quarter and it was a quarter that bears mention. It was one for the record books. War. Inflation. The First U.S. Fed funds rate increase. The likely (typing with fingers crossed now) final act to U.S. Covid. Inverting yield […]
“Bite”
April 6, 2022 Good morning, Beginning yesterday morning and continuing right through the overnight trading session, bonds have been getting hammered (lower prices, rising yields) and consequently equities are looking a lot less resilient than they have over the past three weeks. The alarming 2’s-to-10’s inverted spread mentioned Monday has worked itself out of inversion […]
Breakfast: Inversion on Egg Shells
April 4, 2022 Good morning, After a bit of a “push” last week for the major equity market indexes – the S&P 500, NASDAQ and Russell 2000 were up +.08%, +.66% and +.68% respectively for the week – our investment posture remains the same. We’re giving the recent 3wk old rally the benefit of the […]
A One Day Pass
April 1, 2022 Good morning, Yesterday’s crummy market action had all the hallmarks of end-of-month/quarter portfolio rebalancing. We’ll give our fragile rally a pass for now. Today’s March employment number fooled no one – economists nailed it. It was a strong report, and it will keep the upward pressure on inflation expectations…as well as the […]
Midterm Election Year
March 30, 2022 Good morning, Equity markets overnight were soft as yesterday’s optimism around Russian/Ukraine “Talks” have evidently faded. Military operations continue in Ukraine and show no signs of letup. At the overnight lows, Futures were off half a percent. Now, an hour before the U.S. cash market open, they are off only half that […]
Quite a Worry Wall
March 28, 2022 Good morning, Following a unusually strong move up in equity indexes two weeks ago and delivering two reasonably reliable short term breadth thrust buy signals in the process, equities followed through last week – for the most part. The S&P 500, NASDAQ and Russell 2000 were +1.81%, +1.99% and -0.38% respectively for […]
According to Plan
March 25, 2022 Good morning, Futures are up about a third of one percent this morning ahead of the U.S. cash market open. They spent most of the overnight session under water and mildly in the red. The chatter making morning rounds on trading desks this morning (Bloomberg), is a call for four consecutive 50bps […]
A Year of Single Digit Returns
March 23, 2022 Good morning, World bond markets collapsed Monday with 2yr treasury yields, for example, rising from 1.93% to 2.11% in a matter of hours. Equities were flat on the day. The selloff in world bond markets deepened yesterday, putting short-dated Treasuries (2yr) on track for their worst quarter performance in almost four decades. […]
When to Re-align
March 21, 2022 Good morning, In the midst of the Fed turning hawkish and raising rates last week, and with no tangible evidence of progress on resolving the war, the market staged its largest one week gain in a year and a half. The S&P 500 jumped +6.2% on the week, effectively wiping away half […]
Another Triple Witching Day
March 18, 2022 Good morning, It is a light note this morning, It is another quarterly expiration day today, with a panoply of exercises across single-name and index derivatives providing plenty of reasons for hedging flows and erratic price action. As is customary, we don’t assign much weight or draw any conclusions from what we […]
Probably Irreparable Now
March 16, 2022 Good morning, Sorry this is so late – remote digital connectivity while traveling can still be a bumpy road. As a well anticipated Fed day begins, markets are looking at what must appear to be a mirage to traders – an up market for the 2nd day in a row (its been […]
Enduring Volatile Periods
March 14, 2022 Good morning, An eventful evening for markets last night is leading the way into an eventful week. More BS out of the Kremlin around “talks” led to a meaningful retrenchment in crude prices. This apparently led to a rout on bond prices as yields for the entire Treasury complex are at new […]