To The Moon

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

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 look

China VC problem Recent headlines has been pointing towards a major slump in Venture Capital and private equity money into China. According to Pitchbook, Venture capital investment in China was $26.7 billion with 3,072 deals in 1H of 2023, or an average of $8.69 million per deal, which is a huge decrease from the $40.9 billion at 3598 deals in 2H of 2023 with an average of $11.36 million per deal. At the same time, 1H 2023 data also falls short of 1H 2022 data with $28.6 billion invested into 2588 deals which averages at $11.06 million per deal. This could be explained by rising geopolitical tension between China and US which decreases investors confidence in the US and all around the world in 1H 2023. On the fund raising side of things, venture capital environment is looking bet

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

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

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

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

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

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

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