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Longer Duration Rises
Watch Bitcoin, Gold, Oil, USDJPY and GSG
Big earnings this week (GOOGL,MSFT,AMZN,META,XOM)
Post-Covid "revenge spending" has ended.
“Smaller and early stage” companies will be effected by cost of capital. (Russell 2000 is the worst)
Be aware of price-action in Nvidia for signs of risk appetite in equity markets
The 10-year and longer-duration bond yields are on the move. To clarify:
This isn't about inflation fears (for now) or immediate Fed decisions.
The term premium is a significant factor (think demanded returns)
Supply chain issues can lessen bonds' effectiveness as equity hedges.
Rise in energy will reduce real rates (bad for fed)
S&P 500 is not as strong as tech in this scenario.
QQQ: The green shaded area is the most traded range over the 3 years
Bitcoin is still holding up well. One of the best assets YTD.
Big Earnings This Week
Russell 2000 (Small Caps) are going to have a hard time with cost of capital. The worst index.
Return always wants its risk payment.
NOT INVESTMENT ADVICE. Only for entertainment.
Enjoy the alpha.