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...not that long ago that the rising long-end seemed to be the problem for NDX... out of the way after the talk-about-talk-about meeting has finally happened...?
Can you help answer these questions from other members on NexusFi?
BBG writes unwind of steepening trades... maybe also constrained PMs who must hold bonds moving out of the 5 year into longer ones to try to avoid at least a "direct" hit from the hikes in 2023..?
BBG also quotes participants pointing to improving economy, growth and inflation being good for tech... doesn't fit to the previous narrative of reflation leading to cyclicals outperforming the "new defensives"... so more likely the drop in long-term yields pushing growth stocks...
zerohedge has a piece about recent massive long dealer gamma - I tried to find convincing explanations for yesterday there, but failed... maybe today's moves will shed some light on this
commodities dropping on a curve twist..? - good to know... (or probably just the short-end impacting those, and the flattening doesn't matter..?)
..likely a lot of sqeezing going on with the "whole world" being short UST before... stronger dollar outlook may have enticed some international buying on the longer end..
some pointing to equities continuing to rally historically after (interim...) QE peaks... (...guess due to this coming at times of econ. strengthening and earnings improving..)
Both Fed Chairman Bernanke’s remarks yesterday and President Obama’s speech last night about his jobs plan; combined, failed to reassure the market that a solution to the country’s economic woes was at hand, and the …
(..and XBT back above 40K causing rotation by some momentum-seekers out of NDX into crypto... - with the latter in turn supporting XBT-holding NDX members..)?
NDX_1w
NDX_1m
NDX_XBT
(...RTY doesn't seem to have excited too many participants either, recent four weeks or so..:
"they certainly did seem to like the curve flattening..."
...interesting - today NDX seems to like the steepening... while (I believe) we've already seen the narrative temporarily shifting (back) to growth concerns in Q2.., it wasn't really together with rising longer-term yields...
steepening after perceived likelihood that Fed may be "forced" to tighten "too late" (and hence more aggressively) increased with NFP miss... (and the previously as relatively important considered impact of rising long-term rates rise on growth stocks simply overcompensated by their relative attractiveness in lower growth regime for which perceived likelihood rose with said NFP miss..)..?
At this point, I tend to think -- whatever everyone expects to happen, the opposite will happen.
The 3rd lowest jobs number since the pandemic began (235K) ... they needed 700K - 1M for the taper talk to gain momentum. Everyone thought we would rally, because bad news is good, and awful news is great, right? And of course, high growth like NQ is sure to be even better, right? Well, it didn't work out that way. NQ is doing the best right now though, and I would not be surprised to see a rally into the close, because the sell, like all sells in this market, was early, short lived, and shallow. I got long ES at 22, 25s, and got flat at 33s. The initial selling may have just been using available liquidity to take some profits.
Purely guessing of course. And that's all we can really do. To try and understand all the dynamics is an exercise in futility, but of course we need to understand enough to have the best edge we can.
