Big-Tech & Bitcoin Bid; Bonds, Bullion, & Biggest-Shorts Battered As Sentiment Slumps

It was a quiet week for macro data, but what there was ‘disappointed’ – higher continuing claims, worst deficit, slumping sentiment, and soaring inflation expectations…

Source: Bloomberg

But the ‘bad news’ sent investors fleeing into the ‘safe-haven’ arms of the Magnificent 7 once again, eschewing gold and bonds

Source: Bloomberg

Powell put his foot down on the ‘loosening’ financial conditions since his FOMC performance…

Source: Bloomberg

Mega-Cap Tech (Nasdaq) outperformed Small Caps (Russell 2000) every day this week, ending up almost 600bps stronger Friday-to-Friday – the second biggest weekly outperformance since April 2020 and the melt-up on the back of The Fed’s COVID lockdown rescue. The Dow closed marginally green and S&P up around 1% (closing above 4400)…

…and while Nasdaq soared (best day since May), its breadth continued to plumb new depths…

Source: Bloomberg

The S&P closed back above 4400 – closing the gap from the big plunge after September’s FOMC…

The Magnificent 7 stocks are up for 10 of the last 11 days, adding a stunning $1.3 trillion in market cap during that time to the highest since the July highs…

Source: Bloomberg

TSLA underperformed on the week as MSFT hit a new record high, closing in on AAPL’s market cap…

Source: Bloomberg

Simply put, as Goldman’s Louis Miller highlighted today, the crowded-longs are outperforming and the crowded-shorts are underperforming…

Source: Bloomberg

Also, as Goldman flow traders exclaimed, US Single Stock short flows has increased for 14 straight weeks, the longest shorting streak ever on our record.

Interestingly, Defensives and Cyclical stocks ended in the red for the week, both down around 0.5%…

Source: Bloomberg

Nasdaq is now by far the most expensive its ever been relative to Small Caps…

Source: Bloomberg

And in case you’re wondering, here’s why everything melted up…

While the Russell 2000 failed on Tuesday at its 200DMA, the rest of the majors all broke back above theirs with Nasdaq Composite breaking back above its 100DMA…

Tech stocks outperformed while the Energy sector was clubbed like a baby seal while Financials ended unchish…

Source: Bloomberg

While big banks performed well, regionals were ugly, erasing over half the gains post-Bill-Gross-knife-catching…

Source: Bloomberg

Which meant Value stocks once again underperformed Growth stocks – pushing the pair to what looks like significant support…

Source: Bloomberg

Treasuries were mixed with the long-end outperforming (30Y -3bps on the week), while yields on the rest of the curve were higher on the week, led by the shortest end…

Source: Bloomberg

2Y Yields pushed back above 5.00% after the biggest weekly yield rise since May…

Source: Bloomberg

This pushed the yield curve (2s30s) down (flatter/more inverted) for 4 of the 5 days this week – the biggest weekly flattening since Nov 2022 – to its most inverted in six weeks…

Source: Bloomberg

The dollar

 

Source: Bloomberg

Bitcoin surged to 18-month highs on the heels of ETF approval hopes, erasing almost 50% of the losses from the record highs (and back above pre-Terra-stablecoin crisis levels)…

Source: Bloomberg

While Bitcoin got all the headlines (and Solana exploded 30% this week, up 145% in the last month), Ethereum’s 12% rally was its best week since April

Source: Bloomberg

The ETH/BTC cross ripped higher off support, rallying over 8% in the last two weeks…

Source: Bloomberg

Gold fell for the second week in a row, tumbling almost 3% this week, the 3rd worst week of the year after spot prices topped $2,000 but could not hold it…

Source: Bloomberg

However, we note that spot gold prices did find support at their 200DMA…

Source: Bloomberg

Oil ended the week on an uptrend with, trading back up towards its 200DMA (around $78.18)

Source: Bloomberg

Finally, just as stocks were starting to ‘correct’ down to global ‘liquidity’, a buying panic comes back in…

Source: Bloomberg

But after 15 years, it’s hard to argue that either central banks start printing again or stocks fall…

Source: Bloomberg

…or it’s different this time?

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