QuiCQ 15/04/2025
Back to 'Normality'?
In the middle of every difficulty lies opportunity.”
— Albert Einstein
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Back to normality or just the eye of the storm?
It suddenly got eerily quiet out there again - at least in relative terms. To the more or less rhetoric question above, probably rather the former than the latter - at least for now. With a bit of luck the US administration will focus on their core competence (Golfing) around the Easter holiday, giving investors the chance to digest the earnings season, which just started last Friday.
Anyway, in yesterday’s US equity session we got a kind of normal day, with the S&P 500, with only three swings in excess of one percent:
And yes, I am being a tad sarcastic here, but hey, in relation to last week yesterday felt like a day on the beach.
Breadth was very decent with close to 90% of the stocks in the S&P higher and all sectors except consumer discretionary (-0.10%) up on the day.
Small cap stocks were one of the largest advancers - maybe no wonder given that they also bled most on the way down:
Volatility (VIX) is normalizing and again, all else equal and some long-duration rounds of golf, should continue to drop further and hence be supportive for stocks:
But the best news yesterday/today is probably coming out of the US treasury corner, where yields have stopped their panic spikes and the Tens reverting to a more ‘normal’ level of 4.36 as the time of this typing:
Credit spreads are also contracting again, which should also be supportive for a further relief rally on the equity side:
In currencies, the US Dollar remains to be rather unwanted for now:
Only the CHF was a tad weaker versus the Greenback, which is no wonder given the previous rally for the Helvetic currency:
All else being equal, the US Dollar should see somewhat of a mean-reversion rally from an awfully oversold condition - BUT - trends in currencies tend to be of the more persistent type and coupling this with exodUS …
In commodities, not much changed, with Gold hovering above the $3,200 level and silver rapidly recovering from its sell-off of the past two weeks. Copper is bullishier (I know that word does not exist, but you know what I mean) than oil on the economy:
Time's up, more tomorrow - May the trend be with you!
Strategist are adjusting their end of year S&P 500 targets downwards though remain bullish.
FWIW - which is not a lot.
