{"id":1474143,"date":"2024-06-28T20:00:00","date_gmt":"2024-06-29T00:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1474143"},"modified":"2024-06-28T20:00:00","modified_gmt":"2024-06-29T00:00:00","slug":"sp-surges-to-best-election-year-h1-since-1976-as-rate-cut-hopes-macro-data-collapse","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/sp-surges-to-best-election-year-h1-since-1976-as-rate-cut-hopes-macro-data-collapse\/1474143\/","title":{"rendered":"S&P Surges To Best Election Year H1 Since 1976 As Rate-Cut Hopes & Macro Data Collapse"},"content":{"rendered":"

S&P Surges To Best Election Year H1 Since 1976 As Rate-Cut Hopes & Macro Data Collapse<\/span><\/p>\n

\n

First things first, the market is starting to aggressively price in a Republican\/Trump victory<\/strong> in November after last night’s farce<\/p>\n

Goldman’s ‘Republican \/ Democrat’ stock baskets massively outperformed today…<\/p>\n

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

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

Overall activity levels today were “explosive” according to Goldman’s trading desk with volumes +32%<\/strong> vs. the trailing 2 weeks with market volumes up just +1% vs. the 10dma (mkt wide activity obv backloaded today)<\/p>\n

Goldman said its floor is -3% better for sale, with both HFs and LOs tilted that way<\/p>\n

HFs are -2% better for sale<\/strong> with supply in Tech & Fins outweighing demand for Cons Disc & materials<\/p>\n

LOs are -14% better for sale<\/strong> with Cons Disc the outlier for supply following NKE\u2019s miss.\u00a0 Other pockets of supply include Staples, HCare & Industrials while Tech, Energy, Fins and REITs are all to buy<\/p>\n

Treasury yields exploded higher intraday today with some suggesting this is also pricing in a Trump victory (and other pointing out that hedgies are record short the ultras). Of course, it’s just as likely some qtr-\/mth-end rebalance flows…<\/p>\n

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

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

Which is more likely TBH since we saw some late shenanigans in stocks too (and the annual Russell Rebalance sparked its normal frenzy)…<\/p>\n

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

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

But away from politics (and today), <\/em>US Macro data serially disappointed in the first half of the year, crashing to its ugliest since 2016.<\/strong> This was the worst start to a year for macro surprises since 2018 (and second worst since 2012)…<\/p>\n

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

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

But, despite all this ‘bad news’, rate-cut expectations have plunged YTD<\/strong>, with 2024 starting the year with 160bps priced in and ending H1 with just 45bps priced in. 2025 expectations did pick up modestly, from around 70bps to 87bps…<\/p>\n

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

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

The result of all that: stocks, gold, and crude (and crypto) all notably higher, bonds dumped and the dollar stronger in H1<\/strong><\/em><\/p>\n

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

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

Year-to-date, it has been all mega-cap tech all the time, dragging the S&P and Nasdaq up dramatically (decoupling from The Dow and Small Caps with Trannies in the red in H1)…<\/p>\n

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

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

The S&P’s 15% gain is the best H1 in an election year since 1976, and was set against a very low volatility means Sharpes are through the roof.<\/p>\n

June was extremely quiet with long gamma squelching all directional moves…<\/p>\n

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

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

With realized vol for the month plunging to just 6.3…<\/p>\n

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

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

Breadth remain dreadful – going nowhere at all as stocks melted up in June (thanks to Mag7)…<\/p>\n

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

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

Tech stocks soared in H1 with financials and energy just behind. Real Estate was clubbed like a baby seal (which is no surprise given that home sales are plunging back to or near record lows)…<\/p>\n

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

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

H1 and Q2 and June were all about AI stocks<\/strong>, which have massively outperformed…<\/p>\n

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

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

The other massive winner was GLP-1 stocks…<\/p>\n

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

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

Yields were up notably in H1 2024<\/strong> (10Y +47bps), following a very similar path to 2018 and 2021, with only 2022 worse since 2009. What is also notable is just how uniform the rise in yields has been – the entire curve up around 46-50bps – as Q2 saw bonds bid as macro data disappointed…<\/p>\n

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

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

The dollar surged to its second strongest H1 since 2013, with a big surge in June as yen collapsed…<\/p>\n

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

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

Bitcoin had its 5th best start to a year on record (2016, 2017, 2019, 2022, 2023 were better) ending H1 up 40%. Solana and Ethereum also had a great start to the year…<\/p>\n

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

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

Gold surged in H1, up over 13%, its second best year since 2016 (only 2020 was better). But the last six weeks have seen the precious metal coiling…<\/p>\n

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

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

Oil also had a strong H1 thanks to a rebound in geopolitical risk premium in June…<\/p>\n

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

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

Finally, after such a strong H1, several bulge bracket bank traders are starting to sound a little nervous. Who can blame them?<\/p>\n

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

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

Which happens first, 10Y yield hits 3.5% or S&P 500 hits 5,000?<\/strong><\/em><\/p>\n

…or 3,500?<\/p>\n

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

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

How far would stocks have to fall before the liquidity machines ramp back up?<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nFri, 06\/28\/2024 – 16:00<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/stocks-surge-best-election-year-h1-1976-rate-cut-hopes-macro-data-collapse<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

S&P Surges To Best Election Year H1 Since 1976 As Rate-Cut Hopes & Macro Data Collapse First things first, the market is starting to aggressively…<\/p>\n","protected":false},"author":0,"featured_media":1474144,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-1474143","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbimBl-6buv","jetpack_featured_media_url":"https:\/\/bugaluu.com\/news\/wp-content\/uploads\/sites\/3\/2024\/06\/bfmD4D_0-D5zogp.jpeg","_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1474143","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"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1474143"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1474143\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1474144"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1474143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1474143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1474143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}