Inside Markets — Disciplined Approach
The most recent bear market occurred in 2022 as the Fed ramped its hiking campaign.
Inside Markets — Treasury Yields Explained
There’s been a lot of press attention on whether the backup in Treasury yields is due to foreign investor selling.
Inside Markets — Depth and Duration
Yesterday’s reflex rally took the SPX to key resistance in the 5450-5650 range that contains the downside gap post-April 2 tariff announcements and the 52-week VWAP for the SPX ETF (SPY) at ~5500.
Inside Markets — Off-Ramp into Technical Resistance
Markets are not yet priced for the average recession and getting there implies weaker equities, wider credit spreads, more implied rate cuts and even higher volatility.
Inside Markets — Reflex Rally?
Yesterday’s single-digit reading in the Daily Sentiment Index (DSI) on SPX futures was a clear sign of seller exhaustion and helps make the case for the ~5100 level to hold in the near-term.
Inside Markets — Seller Exhaustion
Equity sentiment is at extremes with last week’s AAII survey recording the third-highest bearish number in history.
Inside Markets — Response to Tariffs
The trade focus has shifted to the response to Wednesday’s tariffs with China choosing to retaliate, while Vietnam is open to negotiations.
Inside Markets — Tariff Headwind
While the magnitude of yesterday’s tariff announcement was slightly larger than many expected, our original estimate for the headwind to fade in mid-late Q2 stands.
Inside Markets — Tariff Announcement
A ‘better-than-feared’ tariff announcement would likely include a low (~10%) blanket tariff that doesn’t include VAT and cancels/replaces Canada/Mexico tariffs.
Inside Markets — Uncertainty Discount
Yesterday’s intraday recovery and today’s relatively strong tape are driven by concerns that tomorrow’s tariff announcement may not be as bad as feared.