GammaLab

SPX Gamma EOD Wrap

OANDA:SPX500USD   S&P 500 Index
I spend most time of the day in the car and I just wand to leave the hotel as quick as possible to grab a burger, so lets make this a rather quick note, even though it was an interesting day that deserves more commentary..

Glancing over the charts and headlines I see surprisingly weak data: Retails sales look very ugly, industrial output missed as well and the UnMich report basically keeps painting a very bleak picture of desperate consumers.

In reaction to the weak fundamental data the Atlanta Fed GDPNow tracker crashed to 5.0% from 6.8% just four days ago and from almost 10% at the end of November, but still 10-year yields spiked by six basis points. Crazy!

Some observers pinpoint the counter intuitive move to secondary UnMich report data that is suggesting that consumer inflation expectations are in danger of getting unanchored. True or not rate hike expectations relentlessly climbed to new highs across the curve.

From a macro standpoint I am increasingly concerned about what will go down shortly regarding monetary tightening. Yesterdays comments made it clear that the Fed means business, and is not playing around this time. It can't! Inflation is economically and politically the most destructive force and it is imperative that yields come down now before the whole system is dislocating. Today's retail sale print (which is not inflation adjusted) was a reminder that price pressures are increasingly weighting on demand.

Anyways, I am out, have a nice weekend!

PS: Total gamma is at -355M by the way..