{"id":1478707,"date":"2024-07-22T20:00:00","date_gmt":"2024-07-23T00:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1478707"},"modified":"2024-07-22T20:00:00","modified_gmt":"2024-07-23T00:00:00","slug":"biden-ouster-sparks-some-trump-trade-unwind-big-tech-bond-yields-bounce","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/biden-ouster-sparks-some-trump-trade-unwind-big-tech-bond-yields-bounce\/1478707\/","title":{"rendered":"Biden Ouster Sparks Some ‘Trump Trade’ Unwind, Big-Tech & Bond-Yields Bounce"},"content":{"rendered":"

Biden Ouster Sparks Some ‘Trump Trade’ Unwind, Big-Tech & Bond-Yields Bounce<\/span><\/p>\n

\n

President Biden’s removal from the ticket for the 2024 election sent Kamala Harris odds of winning in November soaring (but we note she remains below the pre-debate levels that Biden had reached<\/strong>)…<\/p>\n

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

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

In response, US Equities are bullishly trading “DC gridlock”,<\/strong> as Nomura’s Charlie McElligott suggests the downstream Democrat elections odds in House races are being perceived as having greatly improved their win probabilities post the party coup<\/strong> removal of Biden…<\/p>\n

All the majors were higher today led by Small Caps and Mega-Cap tech. The Dow lagged, but ended green…<\/p>\n

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

…while so-called “Trump trades” like cyclical\u2013type sectors come under some modest pressure (Energy and Materials as S&P’s worst perf sectors)…<\/p>\n

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

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

Mega-Cap tech and China ADRs (rate-cut) also ripped (in trump-trade-unwind-style)…<\/p>\n

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

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

However, any ‘Trump trade” unwind is NOT evident in bond-land…<\/strong><\/p>\n

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

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

…with the curve bear-steepening (as we would expect because Trump’s \u201cfiscal overstim \/ deregulation\u201d bearish outcomes for Bonds are more problematic for the long-end of the curve)…<\/p>\n

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

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

Which suggests, perhaps the equity gains are due to other issues…<\/strong><\/p>\n

As McElligott points out, another catalyst within this stocks rally resumption is the opportunity provided by last week\u2019s predictable \u201cVol reset\u201d after having overshot \u201ctoo low\u201d in prior weeks…<\/p>\n

Arguably, we are seeing some relative election stability forming <\/strong>(we seemingly now have our candidates, fake democracy be damned) which, as already mentioned, looks increasingly \u201cgridlock\u201d \/ split outcome for DC which markets thrive in…<\/strong><\/p>\n

We had the \u201cVol reset\u201d last week with implieds squeezed to relative highs, Skew at multi-month highs, VVIX at multi-month highs…which then provides quite a \u201cShort Vol \/ Short Skew \/ Short Correlation\u201d opportunity for the post Op-Ex snapback rally to gain further legs, even despite all the boogeyman of the Vol bottoming \/ bullish VIX seasonality<\/strong> into August which was a further contributor to last week\u2019s de-risking movement…<\/p>\n

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

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

While VIX is lower, very short-dated vol is elevated as the distribution of market outcomes broadened-out as evidenced by the demand for Tails,<\/strong> especially as the shock turn of political dramas coincided with increasingly \u201cCorrelation 1\u201d de-risking experienced at the peak of last week\u2019s Equities trade, with Longs and Shorts both going lower in unison at one point, with Nets being absolutely SLASHED in a monster de-grossing<\/p>\n

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

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

\u00a0And all of these \u201ccalming\u201d inputs most critically are occurring into the \u201cmeat\u201d of Earnings season kicking-off with big Tech releases concentrated over the next two weeks,<\/strong> which, as McElligott notes, means we tend to see a large \u201cDispersion\u201d effect, as Correlation goes lower (Earnings \u201cwinners and losers\u201d going in opposite directions) and contributing to further Vol decline\u2026while too, the \u201cmechanical\u201d overwriting and systematic \u201cVega supply\u201d has not changed either, as the assets keep doing their thing…<\/p>\n

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

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

The Nasdaq\/Russell 2000 pair found support in its nine-month range and bounced today…<\/strong><\/p>\n

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

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

Goldman’s trading desk notes that overall activity levels are down very modestly<\/strong> from their recent averages, but the floor tilts -10% better for sale (that ranks 95th %-ile), driven exclusively by LOs<\/strong><\/p>\n

LOs are -33% better for sale<\/strong> taking profits in every sector, ex Comm Svcs (+10% better to buy there).\u00a0 Selling is most pronounced in Tech, HCare, Fins & Energy.\u00a0 The overall supply skew in Energy, Fins and HCare rank in the 94th-96th %-iles.<\/p>\n

HFs are basically paired buy vs. sell.<\/strong>\u00a0 Demand is balanced across Comm Svcs, REITs, Energy & Mats, while supply is balanced across Fins, Cons Disc & Macro Products.\u00a0 ETF turnover at 34% of tape vs 29% ytd avg tells you fast money hedges moving around more actively today.<\/p>\n

Away from bonds and stocks, it was relatively quiet.<\/strong><\/p>\n

Gold drifted modestly lower, erasing the post-CPI gains…<\/p>\n

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

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

The dollar went sideways….<\/p>\n

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

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

Bitcoin chopped around between $67k and $68k, holding on to Friday’s gains (another example of NOT unwinding the Trump trade)…<\/p>\n

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

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

Oil actually extended its trend lower though with WTI back below $80…<\/p>\n

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

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

Yields were higher on the day – quite uniformly rising into and across the European close…<\/p>\n

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

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

As, rather notably, rate-cut expectations continue to slide lower (with all 2025 dovish gains post-CPI erased)…<\/p>\n

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

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

Finally, the ‘bad news is good news’ trade appears to in opposite land for now as ‘good economic news has recently been bad news for stocks’…<\/p>\n

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

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

Will some certainty about the 2024 election reassert the old trend?<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nMon, 07\/22\/2024 – 16:00<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/biden-ouster-sparks-some-trump-trade-unwind-big-tech-bond-yields-bounce<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Biden Ouster Sparks Some ‘Trump Trade’ Unwind, Big-Tech & Bond-Yields Bounce President Biden’s removal from the ticket for the 2024 election sent Kamala Harris odds…<\/p>\n","protected":false},"author":0,"featured_media":1478708,"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-1478707","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-6cG7","jetpack_featured_media_url":"https:\/\/bugaluu.com\/news\/wp-content\/uploads\/sites\/3\/2024\/07\/bfm4158-vyYgaL.jpeg","_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1478707","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=1478707"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1478707\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1478708"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1478707"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1478707"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1478707"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}