Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

Macro and Geopolitical Research House

Steno Research

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

Macroeconomics

<ul><li>Finally some action from the BoJ earlier today with a 10 bps hike, in line with market expectations after it was rumored that they would tweak policy last week.</li><li>The BoJ has, with barely no exceptions, leaked all their policy moves to the press before actually moving the needle, and dynamics post the meeting is nothing less than a classic “buy the rumor sell the news”.</li><li>It looks like markets had hoped for some clarity on the path for the policy rate, which they weren’t given this morning (more on the BoJ meeting here).</li></ul>

Finally some action from the BoJ earlier today with a 10 bps hike, in line with market expectations after it was rumored that they would tweak policy last week.The BoJ has, with barely no exceptions, leaked all their policy moves to the press before actually moving the needle, and dynamics post the meeting is nothing less than a classic “buy the rumor sell the news”.It looks like markets had hoped for some clarity on the path for the policy rate, which they weren’t given this morning (more on the BoJ meeting here).

Positioning Watch – Commodities are back on, and so are cyclical equities

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Large-Cap indexes (S&amp;P 500, Nasdaq 100) remain bullish, finding support at their respective 20-day MAs since November 2023, and we remain bullish</li>
<li>The question is whether that will continue to be the case. Concerns are rising Treasury yields and the U.S. dollar (DXY), which have broken above short-term resistance levels on Feb13</li>
<li>Friday's PPI report should provide more clarity as to how concerned we should be about rising inflation</li>
</ul>


Large-Cap indexes (S&amp;P 500, Nasdaq 100) remain bullish, finding support at their respective 20-day MAs since November 2023, and we remain bullish
The question is whether that will continue to be the case. Concerns are rising Treasury yields and the U.S. dollar (DXY), which have broken above short-term resistance levels on Feb13
Friday's PPI report should provide more clarity as to how concerned we should be about rising inflation


S&P 500 and Nasdaq 100 Testing 20-Day MAs; 10-Yr Treasury Yield Testing Critical 4.35% Resistance

Cross Asset Strategy

<ul><li>I am sitting here on a Saturday evening (by the time of writing) waiting for the opportunity to say hello to the second junior analyst at home as my wife’s due date is approaching fast.</li><li>In between the frightening thoughts on how to deal with not only one but two diaper-wearing boys at home (myself excluded), I keep pondering why I receive so many questions on the timing of the first rate cut.</li><li>Is it really that important?</li></ul>

I am sitting here on a Saturday evening (by the time of writing) waiting for the opportunity to say hello to the second junior analyst at home as my wife’s due date is approaching fast.In between the frightening thoughts on how to deal with not only one but two diaper-wearing boys at home (myself excluded), I keep pondering why I receive so many questions on the timing of the first rate cut.Is it really that important?

Steno Signals #86 – Trading the Relative Fed and ECB Balance Sheet Development

<ul>
<li>More restrictive Fed policy than expected is disproportionately hitting small/mid-caps which are more sensitive to higher interest rates. This suggests we could see further consolidation for small- and mid-caps.</li>
<li>Large-Caps (SPX, Nasdaq 100, DJI) remain bullish on continued strength from mega-caps (AMZN, META, NVDA,MSFT). Our bullish outlook remains appropriate, but we discuss what would lead us to get cautious.</li>
<li>1-, 2-, and 10-year Treasury yields testing resistance today and failing. U.S. dollar (DXY) also testing key resistance at $104.60. We also push back on the bad breadth argument (again).</li>
</ul>


More restrictive Fed policy than expected is disproportionately hitting small/mid-caps which are more sensitive to higher interest rates. This suggests we could see further consolidation for small- and mid-caps.
Large-Caps (SPX, Nasdaq 100, DJI) remain bullish on continued strength from mega-caps (AMZN, META, NVDA,MSFT). Our bullish outlook remains appropriate, but we discuss what would lead us to get cautious.
1-, 2-, and 10-year Treasury yields testing resistance today and failing. U.S. dollar (DXY) also testing key resistance at $104.60. We also push back on the bad breadth argument (again).


Monitoring Rising Treasury Yields & U.S. Dollar (DXY); What Would Lead Us to Get Cautious?

<ul><li>Very interesting dynamics in markets lately, with the NFP report Friday shocking markets at first glance before sending them back into rally-mode, likely a signal that asset pricing will be more about underlying fundamentals and economic data rather than interest rates alone.</li><li>Despite rate cuts being pushed back a bit by both data and central bankers, the US economy is going strong, and the “interest rates work with a lag” arguments have been swept away for now, which leaves us with good news actually being good news.</li><li>This week’s positioning watch is chart-packed with short and concise text – Enjoy!EquitiesRetail Investors’ allocation towards stocks has remained fairly stable since 2022 and has retracted after the boom in late 2023, but despite having a high correlation with the performance in small vs big equities (Russell 2000 vs S&amp;P 500), Large Cap has outperformed Russell 2000 and other small cap indices by MILES since 2022.</li></ul>

Very interesting dynamics in markets lately, with the NFP report Friday shocking markets at first glance before sending them back into rally-mode, likely a signal that asset pricing will be more about underlying fundamentals and economic data rather than interest rates alone.Despite rate cuts being pushed back a bit by both data and central bankers, the US economy is going strong, and the “interest rates work with a lag” arguments have been swept away for now, which leaves us with good news actually being good news.This week’s positioning watch is chart-packed with short and concise text – Enjoy!EquitiesRetail Investors’ allocation towards stocks has remained fairly stable since 2022 and has retracted after the boom in late 2023, but despite having a high correlation with the performance in small vs big equities (Russell 2000 vs S&amp;P 500), Large Cap has outperformed Russell 2000 and other small cap indices by MILES since 2022.

Positioning Watch – Spread-trades are the way to play the current environment

United States

Invesco QQQ Trust Series 1 is an exchange-traded fund incorporated in the USA. The ETF tracks the Nasdaq 100 Index includes 100 of the largest non-financial companies by market cap listed on Nasdaq. The Index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology.

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Invesco QQQ Trust Series 1 (QQQ US)

Positioning Watch – Commodities are back on, and so are cyclical equities

Finally some action from the BoJ earlier today with a 10 bps hike, in line with market expectations after it was rumored that they would tweak...

Steno Research

S&P 500 and Nasdaq 100 Testing 20-Day MAs; 10-Yr Treasury Yield Testing Critical 4.35% Resistance

$SPX and Nasdaq 100 $QQQ testing 20-day MAs (support since November); We remain bullish, but can't rule out a pullback to 4800-4850 on SPX; 10-Yr...

Vermilion Research

Steno Signals #86 – Trading the Relative Fed and ECB Balance Sheet Development

Welcome to our flagship editorial! I am sitting here on a Saturday evening (by the time of writing) waiting for the opportunity to...

Steno Research

Monitoring Rising Treasury Yields & U.S. Dollar (DXY); What Would Lead Us to Get Cautious?

Monitoring Rising Treasury Yields & U.S. Dollar. 1-, 2-, and 10-year Treasury yields $TNX failing at shorter-term resistances today; $DXY below...

Vermilion Research

Positioning Watch – Spread-trades are the way to play the current environment

Very interesting dynamics in markets lately, with the NFP report Friday shocking markets at first glance before sending them back into rally-mode,...

Steno Research

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