The SP500 dropped by over 2% along side other main indexes despite multiple big banks earnings beat on Friday pre market. This is because of 1 main reason and a few sub reasons. It started on 13/10 thursday, CPI m/m came out as a beat to the upside and the market dropped by around 2%. Then the FED minute came out and the market narated it as a 'good' news which surged the SP500 by around 4%, although many disagrees with this narative. In my opinion, the market naration of 'good' news from FED minutes was just to give an opportunity for big money to exit which I will back this point up at the end of this writing with the most recent VIX movement. (13/10 made the market euphoric). Then on 14/10 which is Friday, UoM inflation expectation came out and it was at 5.1% which is a relatively big i
NJC
No personal profile
11Follow
16Followers
0Topic
0Badge
Analysis |China Stocks Soared due to Alibaba SPLIT
The majority of China stocks ralied in today's trading hour which was led by the news of Alibaba splitting into 6 different companies : Cloud Intelligence Group, TaoBao, Local Services Group, Cainiao, Global Digital Commerce Group and Digital Media & Entertainment. This split in the company caused Alibaba shares to jump by 15% in its US listed shares due to people thinking that by splitting the company, China's regulators will reduce their focus on them. This is because the regulators don't want a company to be too large thereby having too much power in the market, so by splitting the company into 6 parts, investors are pricing in the potential for regulators seeing Alibaba as 6 big companies instead of 1 mega large company, thereby reducing regulations on them. Despite this, Alibaba a
Why the market PLUMMET on Friday ? and Big Money DUMPING
Why the market PLUMMET on Friday ? and Big Money DUMPING
Why is the market surging ?
major indexes are up more than 2% in today's trading hour, the reason for that is because UN said the FED is destroying global growth and is encouraging the FED to take it slow and the RBA (Australia central bank) raising interest rates by 25bp instead of 50bp. This caused the market to rally in anticipation that the FED will pivot soon ( the pivot narrative ). But at the same time, do remember that the FED needs to keep its credibility, and the only way the FED could do that is by following its course that they have planned out, which is 2% inflation. But ultimately, these are all just speculation because the market is just a place for speculations. The next key date is probably 5/10 when NewZealand is set to have their cash rate statement, which will be an indicator of how much the UN st
Why is STOCKS RISING but BONDS FALLING ??
Main indexes like the $S&P 500(.SPX)$ ,$DJIA(.DJI)$ ,$NASDAQ(.IXIC)$ were up around 0.4% in Monday's trading hour. Despite this, the bond markets were down, with the treasuries above 3 years consistantly in the red. ( When bond prices fall, bond yield rise ). The picture below (Data from home.treasury.gov) illustrates that majority of the bonds are in the red with the anomaly being 4 months, 1 year and 3 year treasury bond. (the change: part i added myself) This is quite unusual because both stock prices and bond prices should move in tandem as they are both correlated with how the economy is performing, and they are both forward lookin
Why is STOCKS RISING but BONDS FALLING ??
Macro Analysis | Silicon Valley Bank collaspe & CME data
This post will cover why SVB collapse, its implicaions on stocks and crypto and also new CME data after SVB disaster. First of all, Silicon Valley Bank 'collasped' due to liquidity issue. SVB operates mainly by taking in silicon valley client's fund which was probably gotten from private equity investors and the money deposited in SVB is likely to be needed in the short term, hence SVB has to keep its liquidity. To do so, SVB invest a majority of these deposited money in US treasury bills as they are more liquid than loans, leases and bank premises. But as the FED raises interest rates, the amount of interest SVB gets from treasury bills has became lower than the amount they have to pay interest to clients. Smart clients noticed this and started withdrawing money, promting more a
Why is the market up now ? FED not going to pivot soon.
The SPY is up 0.82% in premarket.The main reason for it is because :- Jerome Powell speech yesterday- RBA, BOC, ECB hiked rate according to analyst expectations- Consumer credit was a big missI made a video about this : Help like it :)https://youtu.be/aog8Fheuh5YJerome Powell speech yesterday- Jerome Powell speech is priced in as a good news because the market rallied during the later half of Powell's conversation with Cato Institution's manager. The reason i can think of is that the the market thinks Powell have became more 'dovish' as his tone is alot less 'hawkish' when comparing to his tone during Jackson Hole. But it is worth to note that during Jackson Hole, he was speaking on a stage and addressing the world while this time, he is on a zoom call with Cata Institution and having a c
Why is the market up now ? FED not going to pivot soon.
The Market tanked after Powell speech, in depth analysis
Major indexes like the SP500 and dow jones tanked by around 0.6% immediatly after Powell said 'rates are going to be higher than expected.' This is because the immeidate fear that people got was firstly, the recent 0.25% rate hike that we got from the FED might be short lived and the next rate hike might go back to 0.5% which will be bad for the market especially because some analyst were already saying the rate hike cycle could be over soon after that 0.25% hike. Secondly, people fear that the terminal rate will be hiked higher than previously priced in which was at around 5.1% but has now increased to 5.25%-5.5% range according to CME data. And lastly also because of investor behaviour whereby if i know this news is going to crash the market, I will sell and short also, thereby increasin
Why is the market up before Jackson Hole Symposium ?
Jackson Hole Symposium event is coming up this weekend and FED chair Powell is expected to be hawkish according to many analyst and fund managers. The reason for this stance include Powell stating that inflation was transitory during last year's sympoium and have to rectifiy his mistake by providing solutions, inflation is now still at 8.5% which is alot higher than the FED's target of 2% etc.Why is the market up ?I believe there are many reasons on why the market is up. But in this post i will discuss 2 reasons. First is the media's narrative whereby analyst believes that Powell is going to give a timeline for pivot in the future hence the market is currently pricing in good news + student loan forgiveness was passed which can help boost economy spending as lesser mon
Why is the market up before Jackson Hole Symposium ?
Why is the market up in Pre-Market ? Don’t get too exited
The market is up during pre-market trading with sp500 up by 0.8%, Nasdaq100 up by 1% & Dow jones up by 0.6%.This rally in pre market due to mainly 3 reasons : 1 ) JOLTS is set to come out at 10am NYSE time, giving investors hope that good news will come out 2 ) Oil price decreased slightly today, causing investors to hope that inflation will ease 3 ) After 2 consecutive days of red, bullish investors are re-pricing the market, hence a correction to the upside. ( same concept as why when market is up consecutively for several day will lead to an eventual red dayBut, don't get too exited about this rally, 1) Firstly, historically ( this year ), everytime on the day when the JOLTS data comes out, it had lead to a green day (can fact check
US market thesis
The main fear factors - FED raise rates - Future earnings recession- Recession - War General market consensus now :- FED rate hike predicted to end by summer 2023 ( May/June ) - So the market is pricing it in already. ( Stock market is forward looking ) - Pricing in by 2023 summer, stock price will be higher than now.- Big money leaving - Bank of America say + VIX is lower than its suppose to be at - VIX - not as high as its suppose to be due to main fear factors : War, FED rate hike, recession, future earnings recession + usual hedging contracts. - Big money have sold alot, so need lesser option contr
US market thesis
FED says the market is TOO HIGH now !
FOMC member Bullard stated that the market is currently underpricing the term 'Higher For Longer' rates. This means that the stock market is rallying recently when its suppose to be pricing in 'below trend growth'.To support this argument : I made a video about this, please check it out and like the video :)https://youtu.be/jMNWe0q39881) Firstly, the stock market is too high now compared to bond market. Take for example the 2 year treasury bond which is the most bearish it has been since april 2021 ( according to Walter Bloomberg on twitter quoting CFTC ) while SP500 and the stock market was rallying. In addition, the 2 years yield is up while the 10 years yield is relatively flat which means that the bond market is pricing in that the FED will only pivot after 2 years. This
FED says the market is TOO HIGH now !
Investing in China
I believe that China's ultimate goal is to advance its economy and it's citizens wellbeing in the long run. The crackdowns and regulations are all part of their plan. 1. Education crackdown : non profit education makes it cheaper for everyday chinese to be educated. Ray Dalio have emphasized that for the changing world order to happen, the education quality of the country must improve.2. Alibaba, Tencent & other big tech crackdown : the crackdown mainly derived from big tech's failure to properly disclose past M&A and failure to treat its people fairly. This crackdownwill force big techs to do more self investigations to prevent future hastles.
The current market sentiment
On 2/9 friday, SP500 was down 1.05% for the day, marking the 6th day of red.On thursday, the market fell then rallied in the later end of the day despite not having any good news that will ease the inflation and the FED, the narrative by mainstream media for the rally was 'hoping for good data on friday,' which was pretty much impossible because the past week of job data came in either as expected or better than expected which is bad for inflation which leads to rate hike.Then on friday, 2/9, the market rallied during pre-market due to the anticipation of unemployment data, non farm employment data & average hourly pay data at 8:30am. Non farm employment was a beat, while unemployment was 3.7%, 0.2% higher than expected and average hourly pay was up 0.3%, 0.1% less than expec
The current market sentiment
Time to short the market ?
The US market is up quite substantially already from its bottom in June $SPDR S&P 500 ETF Trust(SPY)$. With this in mind, my analysis is based on the following points : - Labour force - FED ( raise rates + jackson hole symposium ) - Current market sentiment - Future earnings recessionLabour Force :Although the most recent unemployment data was a beat by a huge margin, but in truth, labour force particioation rate had fell since march 2022 and is below 2019 level, which is a huge contributing factor on why unemployment rates fell. Some might argue that the fall in labour force participation rate is due to people wanting to work for themselves, but in my opinoin, it is more likely that people ( mostly lower inco
Time to short the market ?
Why this rally is not sustainable ?
Key Points: - US economy is strong now - 8.5% CPI is still too high - The market is stubbornly euphoric now - Big money shunning from stocksStrong US economyThe US economy is definitely strong now ( the jobs number, PMI number etc )CPIBut the most recent CPI number is 8.5% which although is lower than analyst expectations, but is still very much higher than the FED's target of below 2% inflation. This means that the FED will have to raise rates alot more in the coming FOMC meetings. Usually, when the FED hike interest rates, the market tends to fall because the market is a forward looking indicator and an increase in interest rates will disincentive buisnesses to hire and expand ( which is what we are seeing now ). Stubbornly EuphoricBut in today's scenario,
The thesis for buying into regional bank stocks
Regional Bank stocks have rallied quite substantially on 6 June due to firstly, many executives of these regional bank stocks are loading onto them. According to reuters, a total of 778 executives and officers bought into their respective bank stocks in Q2 which is more than in Q1 when SVB collapse which only had 524, both times were attempts to boost investors and consumer's confidence. I believe that this buy in is not just a shot in the dark by these executives but rather they see an opportinity to increase their shareholding and decision making power alongside boosting consumer confidence and their own wealth. A secondreason for this rise is because the market is currently pricing in a 80% chance of the FED not hiking rate this round or decreasing the interest rate by 25 basis poi
$TENCENT(00700)$If you think China will do well in the long run. Tencent is almost investee in all of China 👀
The CPI data is WORST than you think for 2 reasons.
The US August CPI data just came out and it was a beat to the upside which is a bad news for inflation. The expected core CPI m/m was 0.3%, but it came in at 0.6%. The market reacted terribly to this. Major indexes were down 1-3%.I made a video for this topic, pls help like it :)https://youtu.be/EG_HEIKw5iQThe 0.3% beat in the market does not sound that bad at first sight. But do remember that :Firstly, this months CPI data was actually already suppressed by US using their oil reserve which was created to aid US in the event of a major war happening or events of similar magnitude. Since the creation of this oil reserve, it has not been used once at the scale we are seeing today even during wars that US directly participated in. This means that the politicians probably knows how bad the cur
The CPI data is WORST than you think for 2 reasons.
The Market Summary
The market has been falling substantially in the recent few days with the SPY falling below June's low for a few hours on friday's hours.There are 4 main reasons for this : 1) Investors repricing the FOMC statement.Powell stated 3 main fear points from CNBC :First being 'FED will plan for the worst and won't use lagged impact of shelter cost' this statement made people fearful of what the FED will do next as the FED is becoming more and more hawkish.Second being 'no one knows wether this process (hike rate) will lead to a recession, or is so how significant that recession would be' which obvoiusly makes the market fearful of multiple disasterous earning quarters.Third being 'we are still discovering what that level (final rate) is', this made the market fearful that the FED fund rate
The Market Summary
Bill Ackman just closed his short position | My Analysis
Bill Ackman closed his short positions on the 30-year treasury yield, stating reasons such as rising geopolitical tensions and too much economic uncertainty. The 30 year yield is now at around 5% range. To put things into context, when he shorted the 30 year yield, he said that the 30 year yield could hit 5.5% and the reasoning was that firstly he thinks inflation will not slow down as fast as the market believe. Secondly, government is issuing too much treasury securities to raise money for government spending (supply of bond increases, bond price fall, bond yield rise). Thirdly, the ending of Japan's Yield Curve Control, reducing the demand for US bonds. Now, after he closed the short position, the bond market actually rebounded, suggesting that bond prices might have hit a low. Th
Go to Tiger App to see more news