“The big money in booms is always made first by the public - on paper. And it remains on paper.”
We ended yesterday with the S&P 500 flirting with a new all-time high as earnings growth has so far exceeded expectations. Nasdaq led the day with Nvidia and Microsoft up solidly. Over in bond land, the 2Y reclaimed a 4.30% yield and the 10Y reclaimed a 4.60% yield. The 20Y auction looked solid with a very strong bid-to-cover helped by a 4.90% yield.
Interestingly, if you haven’t paid attention, Gold is up near new highs, maybe lending credence to Gold’s role as a hedge in times of uncertainty. I believe there was a period between 2007 and 2016 where spot Gold was up something like 80%, this during a period that in hindsight had low inflation, but Gold likely benefited from investor sentiment during the GFC and expectations that monetary policies like QE would be inflationary. Is Gold’s most recent increase a response to the potential for tariffs to cause inflation or instability?
Does anyone care about Davos this year? Sure it was covered on financial news networks, but there’s really been no major headlines, unless “vibe-shift” is a major headline. That said, Jamie Dimon’s “cautiously pessimistic” moniker and concern over a host of geopolitical and elevated market valuations, I guess is something. He also said gambling has been going on for a millennium, some will win, some will lose, when asked about U.S. betting culture and crypto.
Other than that, watching tech oligarchs fight with each other on social media is I guess part of the national pastime now, as Elon calls out the lack of actual funding secured by the Stargate AI venture.
Of course the other big item is constant headlines around tariffs.
On the day ahead, attention turns to jobless claims....that if there is such a thing as attention.
XTOD: We all know that when Softbank throws billions on something, it’s a guaranteed fucking epic failure…
XTOD: The New Tenant Rent Index, which leads CPI Rent, declined sharply in Q4.
XTOD: Warren Buffet indicator hits AN ALL-TIME HIGH‼️US stock market to GDP ratio reached 207%, exceeding the previous record of 200% set before the 2022 bear market.
The ratio is also WELL above the 2000 Dot-Com Bubble top.By comparison, 20-year average is 120%...
XTOD: Apple Investors' Mental Torture "Buying and holding one stock for decades can be a unique form of mental torture. And for many, it ends without actually enjoying those millions you’ve made on paper." https://buff.ly/3CpMXUI
XTOD: You have anxiety because deep down you know you could be doing bigger things.
https://x.com/INArteCarloDoss/status/1881836184516850025
https://x.com/AugurInfinity/status/1882095941911482401
https://x.com/GlobalMktObserv/status/1882103431650771135
https://x.com/RitholtzWealth/status/1881805222072213552
https://x.com/Codie_Sanchez/status/1882147990875283733
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