{"id":1182759,"date":"2023-03-06T12:10:33","date_gmt":"2023-03-06T17:10:33","guid":{"rendered":"https:\/\/bugaluu.com\/news\/big-tech-trounces-small-caps-as-rates-rip-ahead-of-powell\/1182759\/"},"modified":"2023-03-06T12:10:33","modified_gmt":"2023-03-06T17:10:33","slug":"big-tech-trounces-small-caps-as-rates-rip-ahead-of-powell","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/big-tech-trounces-small-caps-as-rates-rip-ahead-of-powell\/1182759\/","title":{"rendered":"Big-Tech Trounces Small Caps As Rates Rip Ahead Of Powell"},"content":{"rendered":"
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Big-Tech Trounces Small Caps As Rates Rip Ahead Of Powell<\/span><\/p>\n

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China growth forecasts sparked some weakness in crude (and bond yields lower) overnight but a smaller than expected drop in factory orders (and bounce in core orders) helped spark a rebound in everything… most notably, rate-trajectory expectations (with both the terminal rate rising and any hopes for cuts collapsing)…<\/p>\n<\/p>\n

Source: Bloomberg<\/em><\/p>\n

And at the same time, the yield curve (2s10s) pushed to a new cycle low, its most-inverted since Oct 1981, screaming recession…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

But rates rising and recession rearing did not stop investors buying big-tech, but from shortly after Europe closed, US equities all saw selling pressure but Small Caps the biggest loser all day. The Dow, S&P, and Nasdaq gave back their earlier gains by the close ahead of Powell tomorrow…<\/p>\n

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Nasdaq (mega tech) outperformed Russell 2000 (small caps) by almost 2% – the most since Nov 2021 – with Nasdaq at its ‘strongest’ relative to Russell 2000 since Oct 2022…<\/strong><\/p>\n

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Source: Bloomberg<\/em><\/p>\n

Goldman upgraded Apple<\/strong> – which likely helped support the mega-caps – but the giant tech company’s stock hit a wall again at around $156…<\/p>\n

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…and may help explain why early on we saw 0DTE traders fading the gains in the index<\/strong> (and then the index catching down to reality in the early afternoon)…<\/p>\n

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HIRO Indicator | SpotGamma\u2122<\/a><\/em><\/p>\n

There was aggressive 0DTE put-buying <\/strong>from the cash open to around 1315ET, and not much give back…<\/p>\n

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HIRO Indicator | SpotGamma\u2122<\/a><\/em><\/p>\n

Furthermore, the mega-caps dominated performance as the equal-weight S&P dramatically underperformed<\/strong>…<\/p>\n

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Source: Bloomberg<\/em><\/p>\n

Value stocks underperformed growth once again, breaking to their relative weakest since Oct ’22…<\/p>\n

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Source: Bloomberg<\/em><\/p>\n

It wasn’t a short-squeeze either as the early spike in “most shorted” faded shortly after the factory orders data…<\/p>\n

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Source: Bloomberg<\/em><\/p>\n

Treasury yields were higher across the curve with the belly modestly outperforming after rallying overnight (weaker China growth?). That’s around an 8-10bps surge in yields during the US session<\/strong>…<\/p>\n

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Source: Bloomberg<\/em><\/p>\n

…with 10Y back up near 4.00%, but finding resistance at last week’s 3.98ish level…<\/p>\n

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Source: Bloomberg<\/em><\/p>\n

The dollar oscillated in a narrow range but ended the day basically unch…<\/p>\n

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Source: Bloomberg<\/em><\/p>\n

Bitcoin drifted largely sideways after Thursday evening’s plungegasm…<\/p>\n

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Source: Bloomberg<\/em><\/p>\n

Oil prices ended the day higher after early (China) weakness. WTI spiked back above $80, three-week highs…<\/p>\n

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Gold futures ended very modestly lower but held above $1850…<\/p>\n

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Having ripped back up to a $3 handle (after briefly tagging a $1 handle), US NatGas prices were clubbed like a baby seal today, puking over 13% as weather forecasts shifted milder over the weekend, slashing the outlook for heating demand at a time when larger-than-normal domestic inventories weigh on prices….<\/p>\n

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Finally, while investors are apparently more confident in the coming weeks, they are pricing considerably more uncertainty in to the markets this week…<\/p>\n

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Source: Bloomberg<\/em><\/p>\n

With S&P implied vols notably elevated into payrolls (and Powell tomorrow), then fading back below 20 – and lower than at the start of last week.<\/p>\n

It’s also worth noting that the S&P has dramatically outperformed during the day-session in 2023 (relative to the overnight session)<\/strong>…<\/p>\n

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A very different regime from the last few years “easy trade”.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nMon, 03\/06\/2023 – 16:00<\/span><\/p>\n

From:Zerohedge<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Big-Tech Trounces Small Caps As Rates Rip Ahead Of Powell China growth forecasts sparked some weakness in crude (and bond yields lower) overnight but a…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1182759","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1182759","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1182759"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1182759\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1182759"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1182759"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1182759"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}