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3/10/22
STOCKS – none
MACRO – SPY, RATES,
- RTM: Options And Bonds Were Right [DAILY UPDATE]
- Who’s Smarter? Bonds And Options Or Equities [Daily Update]
- RTM: Market Liquidity Is Thin
- RTM Exclusive: Apple May Be Heading For A Big Drop
- RTM: The Recession Trade
- RTM: Live Event REPLAY
- RTM: Yield Curve Collapsing With Growth Implication
- RTM Exclusive: Volatility May Be Heading Much Higher
- RTM: Rates Explode Higher, But So Do Stocks
- RTM Yields Surge
Stocks finished the day lower, although managed to stage a mild rebound to finish out the day. The S&P 500 did fall by around 1.4% earlier in the day but then rebounded to close down around 45 bps. The decline started before the CPI report, tumbling along with the European market following the surprisingly hawkish announcement of a slower bond-buying program.
The S&P 500 gapped lower, erasing half of yesterday’s losses, but managed to claw its way back as traders sold put options. This was seen specifically in the SPY ETF, which finished the day with positive delta hedging.
It appears the SPY is consolidating sideways, and I don’t have a clear handle on how the consolidation breaks at this point. A close above $430 would be a breakout, giving the ETF a chance to rise to around the gap at $435. But a breakdown would likely lead to the lows of February 24 being taken out.
2-Yr
The 2-Year rate is now trading over 1.7% and seems to be on a path higher to 1.85% in the near term. The ECB’s surprisingly hawkish announcement should help push rates higher here in the US as European rates get pulled higher.
Financial Conditions
After falling the last two days, the IEF/LQD ratio increased today. A sign that financial conditions are back to tightening.
That’s going to be all for today.
-Mike
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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