Tech Falls From Three Sigma. Credit Is the Vote That Counts.
XLK/SPY drops to +1.92 sigma in eleven sessions while JNK/GOVT holds above +1.0 sigma. Eleven comparable credit slips say the level, not the month, is the signal.
The Fed Finally Hiked. The Bond Market Is Doing the Tightening For It. TSPY Was Designed For Both.
How a daily 0DTE covered call strategy on the S&P 500 seeks to generate monthly distributions in a market shaped by the first rate hike since 2023, a 5.28% 10-year yield, and a still-compressed VIX.
The 10-Year Hit 5.31%. The Bond Market Says It Is Not Inflation.
The 10-year yield rose 97 basis points this year, and 87 of them were real yield. Oil is up 78%, yet 10-year inflation expectations moved 10 basis points.
Volatility Jumped 21% On Friday. High Yield Credit Moved Three Weeks Earlier.
The VIX rose 21.4% on a 1.1% stock decline, a combination seen on only four days in three years. High yield credit spreads have been saying the same thing since September 22.
Small Caps Are Paying The 10-Year's Bill
The Nasdaq set a record on October 5 while the Russell 2000 sat 8.6% below its August peak. The index is not diverging from the economy. It is diverging from the price of money.
The yen is near 158. Who is borrowing it?
The yen is weak, Japanese yields are near 3 percent, and the carry trade question that matters is who has to sell.
Tech Slips From Three Sigma as Credit Turns and the Utilities Streak Ends
XLK/SPY eases to +2.09 sigma, JNK/GOVT logs its first negative month, and utilities end a ten-week losing streak in a hot-CPI week.
The Labor Market Stopped Hiring And Has Not Started Firing
Payrolls rose 29,000 in September, claims sit near 197,000 and wage growth hit its lowest since 2021. The recession signals are missing and the expansion signals are fading.
The Yen Is The Other Side Of The 10-Year
The Bank of Japan has raised rates twice this year and the yen still trades near 158 per dollar. With the 10-year Treasury above 5%, the funding currency has nowhere to go.
The Fed Is Hiking Into A Supply Shock
Gasoline is up 39% in a year and crude has round-tripped from $56 to $115 to $96, yet the Fed is raising rates against it. A central bank can tighten demand. It cannot produce a barrel.
BlackRock's Troubled BDC Pays 17%. The Loan Sale Is The Tell
A valuation probe, three dividend cuts, and now a $523 million portfolio sale at 95% of marks. The stress test is live.
PSEC Pays 21% At A 65% Discount. The Market Thinks The NAV Is Fiction
A covered payout, a freshly cut distribution, and the widest discount in the BDC space. Which side is mispriced?