Speculators have built the largest nasdaq long position in history according to CFTC data
Positioning remains a short-term issue for equity markets. Source: Barchart
The Magnificent Seven have a larger market cap than any country's entire stock market except the US
Source: Barchart
Nvidia, $NVDA, has already added another $130 billion of market cap in 2024 and we're only 6 trading days in
Since its low in October 2022, $NVDA has officially added $1 TRILLION in market cap. As of today, the stock is officially up 400% from its 2022 lows. In 2 years, Nvidia has gone from barely being a top 30 company by market cap to being the 6th largest public company in the world. Source: The Kobeissi Letter
The average price of a used Tesla has declined 18 months in a row
moving from a record high of $67,900 in July 2022 to a record low of $36,661 today (-46%). $TSLA Source: Charlie Bilello
Fed member Bostic just said that he sees just 2 interest rate cuts in 2024 for a total of 50 basis points
As highlighted by the Kobeissi Letter -> This ONE THIRD the amount of rate cuts that futures are currently pricing-in. Bostic also said that he is "not comfortable declaring victory" against inflation at this point. Meanwhile, markets see a base case of 150 basis points in rate cuts in 2024. There is even a ~24% chance of 175 basis points in rate cuts. The Fed to market disconnect is widening. Source: The Kobeissi Letter
Key Events This Week
1. 10-Year Note Auction - Wednesday 2. crudeoil Inventories - Wednesday 3. December CPI Inflation data - Thursday (Crucial data ahead of the January Fed meeting). 4. Initial Jobless Claims - Thursday 5. December PPI Inflation data - Friday 6. Total of 4 Fed Members Speak 7. Earning season Kick-off with some big banks publishing on Friday - see below Source: The Kobeissi Letter, Earnings Whispers
One of the major risk for equity markets in the short-run is Euphoria that prevailed at the start of the year. In other words, positioning is uber-bullish and can only go down from here
As Goldman trader Cullen Morgan writes, after 9 consecutive weeks higher in the S&P (quite a rarity), sentiment and positioning in US equities is very stretched. On the positioning front, US futures length (see chart below) now stands near record highs. In past instances when non-dealer positioning has been greater than $130bn, near term returns have been strong, while returns further out (3-months to 1-year) tend to skew more negative… With the latest data at +$158bn, Goldman traders are very wary of this now being a larger headwind. Similarly, CTA positioning in US Equities is approaching 2023 highs. Bottom-line: any geopolitical or macro news (e.g too hot US jobs print) might lead to higher bond yields might might put some downside pressure on equity markets.
Markets are full risk-on since November 9th
The Nasdaq 100 and the S&P 500 have underperformed the equal weighted indices. They got beat up pretty badly by the Russell 2000 and have been left in the dust by Regional Banks and $ARKK (Ark Invest Innovation ETF). Source: Peter Tchir of Academy Securities
