VisualSectors

VisualSectors

The Fed speakers keep saying: we will hike the rate above 5. The futures keep saying: no, you won't. And the big media keep telling the Fed doesn't know what they are saying. Actually, recently the Fed has been quite consistent. The market will eventually understand that and reassess the ratios.

VisualSectors Updated 

Too many shorts in, and the weak response during last weeks shows the bears can't push any more. Traders expect Fed to raise 1% in November, which is highly unlikely in the current liquidity crisis

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The overly optimistic approach to choose utilities as the recession hedge didn't have too much grounds. Profits are falling, recession is priced in. Sector is not going much higher before coming back to reality

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Mortgage payment doubled, average rate has reached 6%per annum. Even the ongoing rent increase doesn't really compensate the hardships, not mentioning demand hit. Option traders don't believe in the sector

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Looks like the worst is priced in. PPI rising faster than CPI, which means it's the retail who take the hit. Industrial PMIs stopped falling off the cliff. Looks like October might support industrials a bit

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Energy is very dependent on the leaders' decisions, less on fundamentals. A slight cool off in oil prices looks more likely to continue, but the option bets are all over the place - some people bet the price of XLE will reach 99, some people have short bets for 63

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Consumer defensive sector is overcrowded due to recession agenda. But the truth is - it's not really going anywhere. Until the recession fears vanish - then it goes down. Not the hedge you like

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The loss of basically 70% of post-covid bounce brings communications to fair valuations even amid gloomy guidances

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Option flows show the support levels are close. Market due for a pullback

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Weak real spending and rising inflation to influence profits and keep pressure on the sector

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Safe bet when recession fears come in, cool off when good news give hope.

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An incredible 2 trln in reverse repo have to start working at some point. Bonds are the most obvious destination raising 0,05% per annum yields to 3%+. An extra 60 billion in profits

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Monetary conditions weigh stronger than other sectors

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The countercyclical correllation when bonds sell off same time with stocks is likely to end, because investors need actial yield.

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Looks like oil and natural gas are reluctant to economic hurdles

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Fed stubborness is going to cost value companies a lot of profits and cap loss

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The policy tightening acceleration is affecting broad range of stocks.

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The worst economical cycle stage for tech is followed by yet more challenging monetary conditions