Nuggets

Waller we wait

Nothing of interest from Waller so far as of 8:40 a.m. NY. I am listening intently, but so far the discussion has been all about theoretical and academic concerns. So Waller’s speech on Friday becomes the key to Fed policy going forward.

The war is in its 80^th day and Iran seems uninterested in the various overtures from the U.S. The clock is still ticking on the supply shock, but there is still not much evidence that it has arrived.

https://www.newyorkfed.org/research/policy/gscpi#/interactive

That index is derived from various components of the PMIs:

The following subcomponents of the country-specific manufacturing PMIs are used: “delivery time,” which captures the extent to which supply chain delays in the economy impact producers—a variable that may be viewed as identifying a purely supply-side constraint; “backlogs,” which quantifies the volume of orders that firms have received but have yet to either start working on or complete; and, “purchased stocks,” which measures the extent of inventory accumulation by firms in the economy.

Perhaps the rise in bond yields is partly attributable to factors outside of oil? Time will tell. For now, stocks are heavy as last week’s short gamma permabid has disappeared, CTAs are now net sellers, and bond market angst feeds through. Tomorrow’s earnings from NVDA will be a big deal as Huang’s trip to China yielded nothing on the H200 story and the huge runup from $210 to $237 looks tired.

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Situational Awareness about Situational Awareness

In case you missed it, AI-focused hedge fund Situational Awareness LP, founded by former OpenAI employee Leopold Aschenbrenner, disclosed a series of bearish bets /  hedges overnight (via 13F) and while we have no idea whether he is a one-hit wonder with his mega profitable bullish calls, it’s still interesting. He has a strong knowledge of the industry and when a successful bull turns less bullish, it’s worth taking note.

The book changed from a mostly AI infrastructure / power / miners / selected semis long book into a much more barbelled book: still long infrastructure names like BE, CRWV, IREN, APLD, SNDK, miners, but now with a very large semiconductor put complex layered on top. He kept the AI-buildout bottleneck longs, but added broad downside protection against the crowded semi/AI hardware complex.

I mention this because a) he’s an interesting fellow and good writer who has his finger on the pulse of AI and b) retail will probably follow him for a day or two.

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Price Discovery

Something for your radar: trade.xyz is gaining more and more traction as the place to go for weekend pricing in oil and NASDAQ ever since the war started. And it’s now become the place for price discovery before IPOs. You can currently watch the market price for SpaceX here, for example:

https://app.trade.xyz/?market=SPCX

The price of that perp is anchored by $150 = 1.75T market cap and it is currently trading at $201, for a theoretical market cap of 2.36T for SpaceX. It was on the money going into the Cerebras IPO as you can see in this chart via Blockworks.

Trade.xyz runs on HYPE and as that platform gains traction, it has put a bid under HYPE and PURR as many in crypto see the platform as the most likely path toward the long-awaited modernization / tokenization of the TradFi ecosystem. The more activity goes through HYPE, the more tokens are burned and theoretically that should benefit the token price unless it runs into unlocks and insider supply.

I mention this in case you are not aware of trade.xyz and its usefulness as a TradFi reference point via streaming prices in pre-IPO and weekend commodity prices.

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Trades

EURUSD lower still looks okay to me. As long as we are below the 200-day, the down move looks to be in force and the sellers are in control. If we are doing a symmetrical round trip from the starting point on April 7 (the day of the ceasefire), we should return to 1.1511 (my take profit). Below that, 1.1450 and 1.1411 are also minor supports as you can see here:

The take profit on short TNA (57.57) is getting close. You can see there is major support at $57, hence the choice of TP level.

Finally, gold is in chop mode, which is about the best longs could hope for as the dollar rallies and risky assets trade heavy now that the post-expiry equity demand vacuum has hit.

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Final Thoughts

As a rule, I don’t like to play the “too much is priced in” game very often because it’s very hard to risk manage a rates position in an unstable environment where anything can happen. Receiving rates is the equivalent of selling wingy oil calls and so there is a tricky aspect to it. Still, given the current state of the New Zealand economy, market pricing (four+ hikes) looks egregious to me.

This chart shows RBNZ pricing via WIRP. See the right y-axis and the blue bars, which shows the market is expecting a string of back-to-back hikes or maybe even a hike of 50bps at some point. Aggressive.

I hope you achieve all your goals every minute of the day today.

Messi has scored a goal in every minute of a game except minute one.

The following players have scored a goal in every minute of a game:

Cristiano Ronaldo, Zlatan Ibrahimović, Luis Suárez, and Robert Lewandowski

 

Hat tip AnD

good luck ⇅ be nimble