@CatholicCharm Lower rates --> more demand for housing --> higher home prices --> higher inflation
Inflation is already above their 2% mandate, so they'll be slow to cut with oil spiking
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Mike Singleton, CFA
4.3K posts
Mike Singleton, CFA
@InvictusMacro
PM at Diamond Capital Management
Sumali Eylül 2021
573 Sinusundan6K Mga Tagasunod
Someone explain to me like I’m 5 why the fed can’t just lower the rates to 4% and see the housing market start booming
unusual_whales@unusual_whales
US mortgage rates have jumped for a fourth straight week, reaching the highest point in six months, per Bloomberg
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First big bounce for stocks
Meanwhile corporate spreads making a two week low
👀
Mike Singleton, CFA@InvictusMacro
The measured economic data is good. And in fact, it's improving. Moreover, credit broadly remains healthy. Spreads & other measures are indicating that this is a "buyable dip". Not a recession.
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The measured economic data is good.
And in fact, it's improving.
Moreover, credit broadly remains healthy. Spreads & other measures are indicating that this is a "buyable dip".
Not a recession.
Mike Singleton, CFA@InvictusMacro
Homebuilders New starts: increasing each of the last three months Employees: adding jobs, even as the broader labor market slows Rates: lowest since '22 Early cycle? 👀👀 $XHB $ITB
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@InvictusMacro Key word being "discretionary."
But what are understanding? "Hey, here is a completely random event."
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No entry timing, no commission, no slippage...this is essentially noise, not analysis.
Subu Trade@SubuTrade
Total Put/Call Ratio jumped to 1.12 The last 10 spikes came close to marking bottoms for $SPX Will this time be different?
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@adamtaggart @Polymarket He's impossible to remove via his super voting stock
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JUST IN: Meta announces they'll be shutting down the Metaverse, after pouring $80,000,000,000.00 into the project.
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@Biotech2k1 Haha I should be following you more closely then
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@InvictusMacro Individual successful biotechs are up 100% to 500%. Its not the sector. Its the index that is broken. I made 60% in just the last year in biotech.
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$XBI is 30% below its 2021 peak
Five years later.
4% CAGR since 2015
Biotech is not frothy yet
Biotech2k@Biotech2k1
What is happening in biotech right now happens at the top of every biotech bubble. A lot of buyouts come along and people get really really excited to get rich quick. So they pile in the all biotech companies at extremely high level prices hoping that they will get the one or two companies that get bought out. What ends up happening is they might get lucky with one or two buyouts but the all the rest of the companies they buy will end up collapsing when the bubble pops. That's exactly what happened in 2021. $XBI
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@Biotech2k1 4% CAGR since 2015? Even prudent risk-taking in biotech has not been rewarded for a long time
Froth is when imprudent risk-taking is rewarded
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@InvictusMacro Yes it is as that old peak is just reference bias. It was not worth it in 2021 and still not worth it today on value.
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Here's a Fed cheat sheet for stock investors:
If the Fed is thinking about cutting or not cutting 25 bps in the face of 5%+ nominal GDP growth...
It doesn't matter outside of very ST positioning
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One of the worst things (*some*) technicians do is get more bearish/bullish as underlying goes down/up over short periods of time
IMO, the whole point of TA (or any analysis) is to help anticipate the future...
Are dips buyable? Do they convey economic signal? What does the past tell us about the future?
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@sam_gatlin By plenty of measures, it is an uptrend. Above the 200-dma, 200-dma has a positive slope, same for 100-dma
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In bull markets, this line goes up.
Does this look like an uptrend to you?
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@ArbitrageAndy1 Been out of BTC for a while but
x.com/InvictusMacro/…
Mike Singleton, CFA@InvictusMacro
Bitcoin looks positioned for a very sharp short squeeze Short interest is high ETF outflows are the most extreme they've ever been You could easily see 90k in the next month Easily $IBIT $BTCUSD
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Completely agree max pain is vertical now.
John@CryptoGodJohn
What if $60k was this cycles bear market low I don’t think enough people are considering this a possibility
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Of course, markets are extremely dynamic and things change, but as of now the economic/financial market data is fine.
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@granthawkridge I think that's not quite right. All of these figures are highly correlated, and I'm not sure there's a ton of incremental info looking at six of them
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Homebuilders
New starts: increasing each of the last three months
Employees: adding jobs, even as the broader labor market slows
Rates: lowest since '22
Early cycle? 👀👀
$XHB $ITB
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@sdav1986 Because it is the least shareholder friendly company in existence. Combine that with real stress in holdings and investors need a lot of compensation
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@traderhc Getting a lot of asset managers, exchanges, & other stuff in XLF. KBE, KRE, QABA all look better
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Financials are the worst performing sector this month. Down 5% while sitting on a 56 basis point yield curve tailwind.
Let that contradiction sink in for a second.
A steep curve means fatter lending margins. Banks should be printing money right now.
They're not. $XLF is trading 1.6% above its 52-week low instead.
The market isn't trading net interest income. It's front-running loan losses.
Energy and utilities leading while banks collapse is textbook credit cycle deterioration. The last time financials diverged this badly from curve steepness was late 2007.
The curve gives. Credit losses take away faster.
If 49.75 breaks on $XLF, that's the credit cycle confirmation nobody wants to see. What's your read on bank exposure here?
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