S&P 500 EOD gamma update
I have a feeling that it makes more sense to post a gamma update early tomorrow morning, but you still might want to check out the current levels I posted above.
I mean if today has set the mood for the rest of the year, then 2022 will be epic: Uproar in Kazakhstan, which will "force" Russia to go on a "peacekeeping mission" to secure the peace..err the worlds largest uranium stockpiles, North Korea shooting hypersonic things across the oceans (how in the world were they able to leapfrogg from the good old SKS to that stuff??) and a Fed that wants to hike sooner and taper faster.
Over the last couple days since mid December the long end of the yield curve moved higher by almost 20 basis points, but it was today's 3.7 bps increase that broke the camel's back so to speak, and I found that quite interesting. What changed, except some outdated minutes?
Anyways..I was looking at the baltic dry this morning and then at energy and then at shipping rates and I started to wonder: What if the CBs are right after all? Seemed to me that inflationary inputs were indeed coming back big time over the last weeks. I was about to post a freight rate chart, but then Jim Bianco (good man) catched my attention: He was basically stating that 2.5% of the US work force is out of work because of Omicron currently. That is almost five million people and counting and it could mean that output will not come back to normal levels anytime soon. Is this, what is spooking the CBs and future markets? I don't know.
Another thing, and this is potentially big: Over the last two days a pretty significant rotation out of growth into value has started. Never, on a two day basis was that rotation more explosive than today except November 2020 and October 2008. The value/growth rotation is one of the most anticipated events over the last 10 years that actually never materialized and made fools out of so many "experts", that I do not want to push that narrative to hard, but it might be a good idea to keep an eye on that.
See you tomorrow.
I mean if today has set the mood for the rest of the year, then 2022 will be epic: Uproar in Kazakhstan, which will "force" Russia to go on a "peacekeeping mission" to secure the peace..err the worlds largest uranium stockpiles, North Korea shooting hypersonic things across the oceans (how in the world were they able to leapfrogg from the good old SKS to that stuff??) and a Fed that wants to hike sooner and taper faster.
Over the last couple days since mid December the long end of the yield curve moved higher by almost 20 basis points, but it was today's 3.7 bps increase that broke the camel's back so to speak, and I found that quite interesting. What changed, except some outdated minutes?
Anyways..I was looking at the baltic dry this morning and then at energy and then at shipping rates and I started to wonder: What if the CBs are right after all? Seemed to me that inflationary inputs were indeed coming back big time over the last weeks. I was about to post a freight rate chart, but then Jim Bianco (good man) catched my attention: He was basically stating that 2.5% of the US work force is out of work because of Omicron currently. That is almost five million people and counting and it could mean that output will not come back to normal levels anytime soon. Is this, what is spooking the CBs and future markets? I don't know.
Another thing, and this is potentially big: Over the last two days a pretty significant rotation out of growth into value has started. Never, on a two day basis was that rotation more explosive than today except November 2020 and October 2008. The value/growth rotation is one of the most anticipated events over the last 10 years that actually never materialized and made fools out of so many "experts", that I do not want to push that narrative to hard, but it might be a good idea to keep an eye on that.
See you tomorrow.
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