No Bid … No Offer (TWTW – Mar 14-18, 2022)

No Bid … No Offer … 

For those of you that remember the dark days of 2008/2009, I can still recall distinctly, one day, listening to Boom Doom and Gloom author Marc Faber. I was at a Bloomberg terminal, and had come across an interview of Marc, during which he clearly articulated that the biggest risk to the markets at that point, was a sudden withdrawal of liquidity. Boy, as you don’t have to imagine … seeing we all lived it … was he ever right. Course he had made that pronouncement ahead of the dramatic and devastating bankruptcy filing of one “Lehman Brothers”, which was to take place that September, on the 15th, to be precise and which was to have rather serious repercussions …

Today, as I actually Google Marc, I come across his more recent prognosis, of course worthy of his nickname of “Dr Gloom”. Specifically, Marc talks about a lost decade, and of stagflation => click HERE!

This wasn’t where I was going today … BUT to be sure, it is worth paying attention.

That said, the point of no Bid … no Offer … was to highlight that if you are paying attention, clearly, we are going through phases in the last little while when declines are very quick and steep, and conversely, when things move up, they seem to move fast – this past week, presumably on a combination of relief the US FED was finally taking some action (not much mind you…) regarding fighting inflation, respectively hope that some sort of success can be found in negotiations, or cease fire orchestrated in Ukraine. What does that all mean? That as we get caught in the significant daily moves and news flow, we need to try to pay attention to the bigger picture – which may well remain challenged for some time …

Of note this past week:

  • Oil’s mini crash – evidently, after pushing through USD 130 briefly on March 8th, Oil pulled back toward USD 95. By week’s end, we’d reclaimed USD100+. Newsworthy? Saudis and China talking about settling oil in … YUAN (NOT GOOD for the USD …)
  • NATO – Poland, Czech, and Slovenia PMs head to Kiev to meet with Zelensky => click HERE!
  • Ukraine – Optimism? Not really I would say … Particularly if you listened to Zelensky’s address to both the US Congress, respectively the Canadian Parliament => click HERE!
  • FED: FOMC’s 25 bps versus James Bullard’s 50 => in the most anticipated announcement since … whenever, 25bps was the outcome, very much as widely expected and communicated ad nauseam. Interesting though was the dissenter, wanting 50 bsp, and speaking up to the effect we need to get to 3% rather soon => click HERE!
  • Starbucks: New CEO … same as the Old Boss … from the Who … comes to mind, as founder Howard Schultz returns … for the … is it 3rd time? Click HERE!
  • Flows out of China? Apparently, some money is headed into EM, but interestingly, not into China. That said, China this past week made some constructive remarks towards markets, which as a result, pushed Chinese stocks up on the week.
  • Flight of Fancy (I forget where I saw this descriptive, but I liked it …) – phone call between Biden and Xi-Jian-ping: Took place Friday. During the call, the discussion was to address the issue of China understanding that there would be consequences, should they opt to support Russia’s war, which they seem to continue to refuse to condemn…
  • Great week? All good? Stocks rebounded strongly, while volatility dropped notably. Things looking up? Lots of “ink” spilled lately talking about how much higher markets can be 12 months from the kind of situation/crisis we are in. Will that have been it (I kinda doubt it, but let’s see …)

  • Jeff Rubin – on point! During this interview => click HERE!
  • CP: Lock Out Sunday? Obviously not timely, nor helpful to the supply chain problems …
  • Nickel market – rather messy of late, to say the least, with closures several days in a row, and then … => click HERE!

the news you have no doubt seen was of a significant player losing a rather significant amount of $$$ on a “hedge” …

  • Russia bond default – seems to have been averted this past week, but then again, for how long?

As I keep saying of late, be careful out there 🙂

Last week’s performance across Factors; Sectors; and Themes:

  • Key takeaway? Looks to have been high beta trade … Factors have taken a back seat this past week; Themes have rebounded strongly, and Sector leadership for once has shifted back to Tech this past week as far as sharp rebound. Sustainable?

 

YTD performance across Sectors; Themes; and Factors:

  • YTD Leadership unchanged
  • themes still deep in the red overall YTD despite sharp bounce after dramatic sell off that started back in early November already
  • Factors “dominance” still in place – mostly in my books strongly driven by ENE; MAT; and FIN relative exposure vs traditional benchmark

Enjoy the week-end 🙂