Macro Dragon: Fuggetaboutit...
Summary: Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.
Macro Dragon: Fuggetaboutit... There is Competitive Edge & there is Compounded Competitive Edge...
Top of Mind…
- O/N saw the risk-on party continue to melt up with SPX cash closing up +1.2% to 2992, interestingly enough NDQ was -0.255 to 9390… would not read too much into this.
- With VIX still sub 30 & vol of vol falling by -4% & more importantly some of the underlying sectors that have lagged having a field day: Aerospace & Defense +4.1%, Financials +5.2%, Airlines +11.8%... the path of least resistance is still likely higher. Still you know KVP’s view on the financial sector in general, structurally yours, in size. So when you have things like EuroStoxx banks 56.73, up +6.5%, one should think about fading the moves or at the very least have some relative value skews. Technically, the chart does look like it wants to break out higher, so bullish, yet keep those 2Q & 3Q earnings dates on your radar.
- So technical wise, S&P closed above the 100DMA, it still needs to get a close above both the identical lvls of the 200DMA & more importantly 200WMA of 3,000. At the end of the day, it likely the Nasdaq-100 that is the one to watch, it took us up & when we do one day go down, its likely to lead… & again that’s a high bar, given that in a post C19 world, tech has never been more incumbent, more dominating, more monopolistic nor ever had such wider & deeper moats.
- KVP could give you $6.0 trillion dollars (imagine the whisky sours!) - that’s 5x Amazon’s current market cap of $1.2 trillion dollars - you could not even put a structural dent into Amazon’s business. There is competitive edge & then there is compounded competitive edge – the first you can pay for (capital, education, studying, talent, blood, sweat & tears) & catch up to… the latter? Fuggetaboutit man… no one is catching up to Bezos, you know there is people that still think that all that Amazon does is deliver books… Fuggetaboutit… KVP personally cannot wait for Amazon to sink their lasers into the healthcare & insurance industries… talk about industries with smoke & mirror miss-pricing… Bezos could literally be worth $1 trillion one day... he is only 56 & don’t forget Blue Origin… & the fact that the map is not the territory…
- Ever rolled with a tiny black belt who also happens to be 5x world champion & +15-20yrs older than you? Fuggetaboutit, It’s the paragon of humility that you did not even know you needed… but most of all… its an inspiration… once you accrue a certain amount of your basic needs being met, the best things are those which money cannot buy.
- Energy continues to melt up & Ole recently flagged on an internal meeting that we could be getting on Thu, the biggest drop in Cushing stock in 5yrs – which could add to the bullish momentum. With WTI $34.03 & Brent $35.95 up +3.3% & +1.9%, we saw follow through on a number of energy related currencies USDNOK 9.9049 -1.7% [remember the prime conviction call from KVP on all things NOK crosses & NOK assets – touched on that here, with Hardy & Jakobsen’s original piece was here], EURNOK 10.8677 -0.9%, USDMXN 22.2289 -1.5%, USDRUB 70.8106 -1.2%, USDCAD 1.3778 -1.5%.
- These are big lvls for EURUSD, flirting with taking out 1.1000, with yest +0.77% pop to 1.0973. AUD &NZD still in ascension 0.6650 +1.7%, 0.6195 +1.6%. If we get a clear breakout higher on EURUSD, then we may finally see a sustained breakdown in the DXY 99.07 -1.0%... which has still been range bound for months (yes can hear those DM FX trader moan & groan & totally ignore the trend we’ve seen in NOK). On another side note & have spoken to a few of you on this from last wk, BRL is rallying despite the mother of all perfect storms headlines & news wise. USDBRL is c. -10.4% from the ATH… always a bull market somewhere, the juice is cultivating a life & portfolio that always captures that.
- Gold & Silver a touch back at -1.2% & -0.9% at 1714 & 17.21 respectively, yet Copper & Palladium clocked up at 243.85 +1.2% & 1965 +0.6%. Silver’s bullish breakout higher is still very much intact, we need to stay above 200WMA of 16.94 & pre break-out lvl of 15.8734. On the top side we need two consecutive weekly closes above 17.2239. Gold – which we have talked about for months now – is still in the 1680 to 1725 range, it does feel that we have skewed towards the top end of that range over the last 1-2 wks… its on the way. Just need another 3 trillion to be thrown into the hole.
- On DM govies, what stood out was the pretty big pullback in bunds -0.53% to 172.10
On The Radar Today
- AU: Construction Work Done Q/Q -1.0%a -1.5%e -2.9%p
- EZ: ECB’s Lagarde @ 15:30 SGT
- US: Richmond Mfg. Index, Beige Book
(Note the usual Weds US oil inv. figs will be due on Thu given that Mon was a holiday)
Start-End = Gratitude + Integrity + Vision. Create Luck. Process > Outcome. Sizing > Idea.