Morning Note: UH OH!! (maybe)

This week will likely be big for equity market volatility (Fed meeting, ECB meeting, Apple, Amazon, Alphabet earnings, Jobs numbers, etc.)... Clearly, looking at futures speculators’ positioning, those traders are (among other things, perhaps) expecting the Fed to pull the punchbowl (or, let's say, given present dynamics, not replenish it) just as the party's getting started.

Here's from our internal chat thread over the weekend:

Quote of the Day: Yes, 0DTE Options are a Big Deal Right Here!

In Wednesday's video I made mention of the not-small (trust me!) impact that the large volume of zero-days-to-expiration options trading has been having on the overall market of late... Here's Hedgeye's Keith McCullough on the topic

"Right now, there’s a bubble in zero days to expiration (0DTE) options. North of 50% of the options traded every day expire within 6 ½ hours of the market open. Now we’re dealing with that, who’s bulling the tape to get S&P 4,000 to print, for instance. The volume of 0DTE call buying is changing market behavior – with a small number of dealers forced to hedge which suppresses volatility. But this dealer hedging works both ways and that’s why you’ve seen these wild moves in markets. You need to be careful and have a process for knowing the trend. When things unwind, they unwind quickly."

Economic Update: Corporate Earnings Shoe to Drop (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Stock Market Snapshot (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: Under the GDP Surface

My response to my good friend Sam's comment on yesterday's blog post (he mentioned the Q4 2022 economy and the impressive resilience of the equity market of late):

Morning Note: Key Highlights

Here are some key highlights from our latest messaging:

Yesterday:

...like we keep saying with regard to corporate earnings: 

"On balance, the LEI and other recession indicators are likely to continue sending a recessionary signal in the coming months. Meanwhile, aggregate earnings forecasts remain too optimistic and have room to be revised lower."

Hence, the chart we featured in yesterday's note (LEI/CEI ratio in white, SP500 earnings in orange):

Stock Market Snapshot (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust: 

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.