Ryan Mastro

🚨US TREASURIES ARE SELLING OFF: The US 30-year Treasury yield is up to 5.018%, crossing above the critical 5% threshold for the first time since July. This comes as crude oil surged on fresh Middle East attacks on energy infrastructure, stoking inflation fears, while the US Treasury on Monday raised its Q2 borrowing estimate to $189 billion, up from $109 billion projected in February. Furthermore, the market is pricing in a 70% chance of a Fed rate hike by April 2027. A sustained break above 5%, or a breach of the 2023 peak of 5.17%, would push US long-term yields into a trading range not seen in nearly 2 decades. On all 4 previous occasions over the last 3 years when the 30-year yield crossed or approached 5%, the S&P 500 saw a pullback each time. The bond market is now pricing in a world where oil stays high, inflation stays sticky, and rate cuts stay off the table.

Each time concentration levels hit 40 percent, a crash followed. We are at 41 percent. But I’m sure this time is different. If only there was a catalyst for the AI bubble unwind.

BREAKING: The ratio of US leading to coincident economic indicators is now down to 0.84, matching the 2008 Financial Crisis low. This comes as the Leading Economic Index (LEI) fell -0.6% MoM in March, posting its 7th monthly decline out of the last 8. The Conference Board Leading Economic Index (LEI) tracks forward-looking data, including consumer expectations, manufacturing orders, weekly hours, and initial jobless claims. At the same time, the Coincident Economic Index (CEI) measures current economic conditions in real time, such as nonfarm payrolls or personal income, excluding government social security or unemployment payments. This ratio is now on track for its 5th consecutive annual decline, the longest streak on record. In the past, such depressed levels have never occurred outside of a recession. The US economy and the stock market are moving in opposite directions.

🦔Banks including JPMorgan, Morgan Stanley, MUFG, and SMBC are shopping ways to offload data center debt exposure, with lenders spending more than six months trying to distribute $38 billion of construction debt tied to a single Oracle-leased project in Texas and Wisconsin. Some banks have sold portions to non-bank lenders at a discount. The structures being explored include modified significant risk transfers, where banks slice individual concentrated loans rather than pooling dozens of smaller ones, with deals in the $500 million range backed by a single borrower already in market. Maine passed a statewide data center moratorium in April, adding regulatory risk to projects that already carry construction risk and heavy concentration among a handful of operators. My Take Banks selling loans at a discount to clear them off the books shows how tight things have gotten internally, because JPMorgan does not spend six months shopping $38 billion in construction debt unless risk limits are getting hit and the only way to keep originating new loans into the AI buildout is to make room first. Man Group describing banks as starting to choke on the size of these deals is not language that ends up in print by accident. A traditional SRT spreads risk across dozens of loans so no single default sinks the trade, while what is being shopped now is closer to a single-borrower SRT with investors taking the riskiest tranche of one concentrated loan to one operator carrying significant construction risk and one or two anchor tenants. That looks closer to the bespoke single-name structures that showed up before 2008 than to the diversified portfolio transfers Europeans have used for years, and my question is what happens when the AI capex cycle slows and you are left with half-built data centers in secondary markets tied to operators whose business models depend on frontier model spending continuing forever. The banks are doing what rational risk managers should do, and the fact that they need to is what should be getting attention. Hedgie🤗

Volume in S&P 500 Zero Days to Expiry Option (0DTE) has jumped to a new record. "Speculation" is the new "investing" for the latest generation of investors.

Don't want to miss this 👀 @tradedevils

Did an interview with @tradedevils and talked about #automating options trading with @optionsrobot5. Check it out: youtu.be/br61PE5zBRg?si…

This is a far more real time gauge in air travel demand since bookings are done 2-3 months before the actual travel.

Could never happen in the USA. Right? Right???!

Only 3 days until China takes the axe to HFTs⚠️

The S&P 500, adjusted for corporate profits, has reached levels similar to December 1999. Which was very close to a secular market top. Maybe this time is different—maybe not. One thing is certain: in terms of classic valuation metrics, current levels are far from a bargain.

$NVDA 1May $215c 1st target🎯 hit $5.45 UP 40% 🔥🔥💸💰in 60 mins! Thanks @ryanmastro5 @petenajarian @Wayne_Razzi 🙏🙏❤️

$FLYYQ 3rd target🎯🎯 hit $2.40 UP 145%🎯🎯 in 3 hours, 💸💰🔥🔥now holding rest of shares to $3.95 in $.50 steps. Thanks @ryanmastro5 @petenajarian 🙏🙏❤️

Omg. This is absolutely insane. Why is everyone acting like this is normal?

Largest Private Credit default ever? Medallia default doesn't just wipe out $5.1B in equity, it imperils the lenders too Blackstone's public BDC $BXSL (3rd largest in world) owns Medallia loans in massive size: nearly $400 Million which comprises ~5% of net assets 1/2

The 19 largest companies sorted by 2027 P/E estimates: I’m not saying $MU needs to get even close to the P/E’s of the other names. But in the last 10 years it averaged a 13.69 P/E, and the median P/E was 7.61. So even taking the smaller 7.61 into account, then MU may still have about 60% more upside?

"One of the stock market’s swiftest rallies back to record highs in recent memory wasn’t broad based at all. Just 26% of stocks in the S&P 500 actually outperformed the index during the recent run higher." @_JoshSchafer

Goldman (Garrett): the speed of CTA global equity buying over the last week is top five all time … +$86 billion over that time frame... gs futures strats have this cohort modelled to purchase an additional $70 billion of the next 5 sessions (flat tape), while past performance is not indicative of future returns … [the three] previous episodes of [similar] accelerated demand have seen short term consolidation, followed by medium term strength for S&P500 (t+1 month =+ 2.19% avg return, t+3m = +8.18% avg return)

"South Korean exports tend to lead U.S. forward earnings growth by roughly one month, largely due to the technology ordering cycle" @LizThomasStrat

CTAs Bought $86BN Last Week; They Have Another $70BN In The Next Five Sessions zerohedge.com/markets/ctas-b…