Largest weekly outflow since 2020 in U.S. High Yield bonds!
Last week, one of the largest ETFs tracking U.S. high yield bonds, the HYG or iShares iBoxx HY Corporate Bond ETF, had its largest outflow since 2020. Valuations are stretched in high yield despite solide fundamentals. Any spike in equity volatility could quickly negatively impact this segment. Source: Bloomberg
US equities: Bulls finally outnumbered Bears
Bulls finally outnumbered Bears in this week's AAII Sentiment Poll, ending a record streak of 44 consecutive weeks of bearish sentiment. We haven't seen more Bulls than Bears in this poll since March 2022. Source: Charlie Bilello
US equities: market internals still look bullish
We continue to see new highs > new lows (27 days in a row is longest stretch since mid-2021) and that is bull market behavior. Source: Willie Delwiche
A Warren Buffet styled "Investment checklist"
Source: Brian Feroldi
A stronger than expected US GDP in Q1 ?
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2023 is 2.1 percent on February 7, up from 0.7 percent on February 1 - source: Atlanta Fed GDPNow
China reopens borders with Hong Kong
Source: Bloomberg
A reality check on Europe's energy shock: the French trade deficit
France's trade deficit in Dec. '22 was the widest in two decades when compared to the same month in previous years, a crude way to adjust for seasonality. Europe's energy shock is large and ongoing. Source: Robin Brooks
A new cycle high for U.S. terminal rate expectation
The market has pushed its expectations for the U.S. terminal rate higher (and longer). Indeed, it now appears that it will end slightly above 5% and in July 2023 (one month later than previously expected). The resilience of the U.S. economy (driven by a strong labor market) continues to drive terminal rate expectations higher and for a longer period of time. Source: Bloomberg
