As we moved into 2024, one downside risk needs to be kept in mind:
tightening monetarypolicy cycle often operates with a lag. As shown on the chart below, stocks typically plunged many months after rates peaked in the past. Source. Bloomberg, Cheddar Flow
EQUITIES MOVE HIGHER AS BOND VOLALITY DROPS
Rates volatility joined the global volatility puke in November and we actually have the MOVE trading at the lowest levels since around mid September. Perfection vs SPX continues. Chart shows MOVE inverted vs SPX. Source: TME
Hedging demand has fallen sharply with the cost to protect against a market selloff down by around 10%, or one-standard deviation, tumbling to the lowest ever in data starting in 2013
Demand for tail-risk hedges that pay out in an equity fall as precipitous as 30% has also dropped and is hovering around the lowest level since March.- Bloomberg
Up again today. Index is up 8%. This group of Chinese stocks is up over 50% in just a few weeks
Source: David Ingles, Bloomberg
A gauge of early-stage small, mid-cap growth stocks in China has rallied 40% within just a few weeks
Source: David Ingles, Bloomberg
Consensus expects Net margins for the Magnificent 7 to stay significantly higher than the rest of the S&P 500
Source: Goldman Sachs, TME
The rally in US stocks in recent weeks has taken attention away from what looks like a pretty concerning forward picture from earnings releases
Q4 earnings expectations have come down considerably in recent weeks, in contrast with equity market strength. Source: Bob Elliott, Factset
A look back on just how rapid Nvidia's $NVDA data center growth has been
· +79.7% CAGR since Q3 FY17's $240M revenue. · Reached record levels at $1.9B in Q3 FY21. · Grown 664% since then to $14.51B in Q3 FY24. · Projected to reach $46.6B in FY24, 56x more than FY17's $830M. Source: Beth Kindig
