Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Technical Analysis

The past 24 hours has seen a bearish outside day on the S&amp;P 500 e-mini futureThe last time we saw that was at the very high on 10 May when we finished at 4,183.From that level we fell an additional 154 points over 2+ sessionsAre we to see the same again and if so, what else could that suggest?

The past 24 hours has seen a bearish outside day on the S&amp;P 500 e-mini futureThe last time we saw that was at the very high on 10 May when we finished at 4,183.From that level we fell an additional 154 points over 2+ sessionsAre we to see the same again and if so, what else could that suggest?

Founder & CEO Bond Angle, LLC, Bond Angle, LLC

Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

Insightful commentary and analysis on bond markets and market movers, including financial, economic, and industry catalysts and management shenanigans. 

High yield market investment research

Credit

<a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> CEO Elon Musk has been sparring for days with <a href="https://www.smartkarma.com/entities/bitcoin-usd" target="_blank" data-smartkarma-citation="entities:25895:1" rel="noopener">Bitcoin (XBTUSD CURNCY)</a> fans on Twitter after his shocking and very expensive negative turn last week sent Bitcoin currency and Tesla stock into tailspins.That’s when Musk announced, <a href="https://twitter.com/elonmusk/status/1392602041025843203" target="_blank" rel="noopener">via Tweet</a> of course, that he suddenly was concerned about severe damage to the environment caused by bitcoin mining (see my client note <a href="https://bondangle.substack.com/p/what-elon-learned-while-i-was-working" target="_blank" rel="noopener">What Elon Learned While I Was Working</a>).It’s near impossible to believe Musk, self-proclaimed <a href="https://twitter.com/elonmusk/status/1387290679794089986?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">DogeFather</a>, was not already well aware that cryptocurrencies have a bad reputation as <a href="https://www.bloomberg.com/opinion/articles/2021-01-26/is-bitcoin-mining-worth-the-environmental-cost?sref=Q1XEaVVD" target="_blank" rel="noopener">acute consumers of energy, largely produced by the dirtiest fuels</a>.So who is he really fighting?

Tesla Motors (TSLA US) CEO Elon Musk has been sparring for days with Bitcoin (XBTUSD CURNCY) fans on Twitter after his shocking and very expensive negative turn last week sent Bitcoin currency and Tesla stock into tailspins.That’s when Musk announced, via Tweet of course, that he suddenly was concerned about severe damage to the environment caused by bitcoin mining (see my client note What Elon Learned While I Was Working).It’s near impossible to believe Musk, self-proclaimed DogeFather, was not already well aware that cryptocurrencies have a bad reputation as acute consumers of energy, largely produced by the dirtiest fuels.So who is he really fighting?

Cross Asset Strategy

As major indices around the world remain somewhat on the back foot at the start of this week, one market that has done the opposite is the Shanghai Composite.
Today we finally see a bullish break as the market rallies through 3,500.
While further near term gains in Shanghai are expected, and targets are highlighted, the long term chart against the S&amp;P 500 reveals a more interesting possibility...

As major indices around the world remain somewhat on the back foot at the start of this week, one market that has done the opposite is the Shanghai Composite.
Today we finally see a bullish break as the market rallies through 3,500.
While further near term gains in Shanghai are expected, and targets are highlighted, the long term chart against the S&amp;P 500 reveals a more interesting possibility...

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

<a href="https://www.smartkarma.com/entities/s-p-500" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 (SPX INDEX)</a> is at a pivotal juncture after cracking micro wedge support at 4,160 on the back of weaker links breaking down (RTY and NDX) while the DJI just put in a lower degree wave 5 top at 35k.After a sharp two session rise we are shorting to measure a give back with pivot supports at DJI 33,100, NDX 13,300 and SPX 4,150 that act as fresh momentum triggers. Holding these levels would induce a meagre upside test on resistance levels to short into.DJI expected to underperform making this a top short bet. Tech and small caps once below pivot support will buckle again.

S&amp;P 500 (SPX INDEX) is at a pivotal juncture after cracking micro wedge support at 4,160 on the back of weaker links breaking down (RTY and NDX) while the DJI just put in a lower degree wave 5 top at 35k.After a sharp two session rise we are shorting to measure a give back with pivot supports at DJI 33,100, NDX 13,300 and SPX 4,150 that act as fresh momentum triggers. Holding these levels would induce a meagre upside test on resistance levels to short into.DJI expected to underperform making this a top short bet. Tech and small caps once below pivot support will buckle again.

Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Net issuance trends for US Treasuries and equities have diverged sharply since 1984, but the absolute valuations of both asset classes are expensive compared to history. Strong net equity issuance in 2020 H2 has led some commentators to conjecture that the prolonged era of shrinkage may have ended.
Since 1984, companies have generally remained private for longer and their businesses are less capital-intensive than previous eras, thereby contributing lower levels of gross equity issuance in public markets. Meanwhile, merger and acquisition activity (M&amp;A), both strategic and buyouts, have contributed to a withdrawal of equity supply from the open market. The depressed Q-ratio for US equities between 1984 and 1990 indicated that buying quoted companies made more sense for new entrants than starting from scratch, producing a sharp rise in buyout activity during the aforementioned period.
Meanwhile, buybacks have become the dominant distribution policy option for corporations, partly due to tax considerations, but their impact on aggregate equity supply has probably been overstated due to their opportunistic nature.
The attraction of boosting the equity component of the US capital structure has diminished in recent decades due to the falling cost of debt and advantageous tax treatment of interest compared to dividends. Meanwhile, gross equity issuance has been hindered by more onerous legal and reporting requirements for potential new listings, such as the Sarbanes-Oxley Act, while access to alternative sources of capital, notably private equity and venture capital, have given companies the ability to stay private for longer. Over time, private equity firms have scaled-up deal sizes, while IPOs are no longer the automatic exit choice for venture capital firms.
The continued shrinkage of US equity supply will depend on the enthusiasm of investors to increasingly allocate assets in favour of private equity and venture capital, particularly if legislative changes make it easier for defined contribution pension funds and private investors to participate in these asset classes. Meanwhile, the recent SPAC issuance boom is not the harbinger for a new and elevated trend due to the likelihood of greater competition from stock exchanges in realms of conventional IPOs and direct placements. SPACs are also expensive and deal quality could become an issue, particularly given the rise of private investment in public equity (PIPE) funding, whereby investors expect IPO exits to bestow high returns.

Net issuance trends for US Treasuries and equities have diverged sharply since 1984, but the absolute valuations of both asset classes are expensive compared to history. Strong net equity issuance in 2020 H2 has led some commentators to conjecture that the prolonged era of shrinkage may have ended.
Since 1984, companies have generally remained private for longer and their businesses are less capital-intensive than previous eras, thereby contributing lower levels of gross equity issuance in public markets. Meanwhile, merger and acquisition activity (M&amp;A), both strategic and buyouts, have contributed to a withdrawal of equity supply from the open market. The depressed Q-ratio for US equities between 1984 and 1990 indicated that buying quoted companies made more sense for new entrants than starting from scratch, producing a sharp rise in buyout activity during the aforementioned period.
Meanwhile, buybacks have become the dominant distribution policy option for corporations, partly due to tax considerations, but their impact on aggregate equity supply has probably been overstated due to their opportunistic nature.
The attraction of boosting the equity component of the US capital structure has diminished in recent decades due to the falling cost of debt and advantageous tax treatment of interest compared to dividends. Meanwhile, gross equity issuance has been hindered by more onerous legal and reporting requirements for potential new listings, such as the Sarbanes-Oxley Act, while access to alternative sources of capital, notably private equity and venture capital, have given companies the ability to stay private for longer. Over time, private equity firms have scaled-up deal sizes, while IPOs are no longer the automatic exit choice for venture capital firms.
The continued shrinkage of US equity supply will depend on the enthusiasm of investors to increasingly allocate assets in favour of private equity and venture capital, particularly if legislative changes make it easier for defined contribution pension funds and private investors to participate in these asset classes. Meanwhile, the recent SPAC issuance boom is not the harbinger for a new and elevated trend due to the likelihood of greater competition from stock exchanges in realms of conventional IPOs and direct placements. SPACs are also expensive and deal quality could become an issue, particularly given the rise of private investment in public equity (PIPE) funding, whereby investors expect IPO exits to bestow high returns. 

Goodbye to the Golden Era of US Equity Supply Shrinkage? Not So Fast!

United States

The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

S&P 500 INDEX (SPX INDEX)

S&P 500: Price Action Notes

A closer look at the S&P 500 e-mini future gives fresh indications that lower levels are likely to be seen over the coming days and possibly even...

Shyam Devani

Tesla: Who Is The Enemy Now?

CEO Elon Musk spent the weekend battling Bitcoin fans on Twitter after his shocking and very expensive about-face on the cryptocurrency he made...

Vicki Bryan

China Equities: The Hidden Dragon

The short term bullish break on the Shanghai Composite is interesting...but not as interesting as where we are on the ratio against the S&P 500.

Shyam Devani

Weak Links Did Crack SPX Wedge Support

S&P 500 is at a pivotal juncture after cracking micro wedge support at 4,160 on the back of weaker links breaking down (RTY and NDX) while the DJI...

Thomas Schroeder

Goodbye to the Golden Era of US Equity Supply Shrinkage? Not So Fast!

US equity supply has shrunk since 1984, but issuance since 2020 H2 has been strong. Private capital will, however, be a strong alternative to...

DeSaque Macro Research