My Mac n cheese and chicken look good too!

$30,000 Millionaire said:

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some notables that came up:

• Healthcare sector overall: XLV and entities like CVS
• GM
• JCI
• NVDA
• HPQ (this may be a mass accumulation play, you want to buy this at 30, not where it is)
• TSN - ha
• MARA

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I'm intrigued by MARA mainly because I think BTC is about to make another leap up. Made a couple hundred on a CC last week but left quite a bit on the table. I'm thinking I'll get back in tomorrow morning and set a much higher strike.

Tomas Hermensa said:

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Bond yields for 1, 5, 7, and 10 are up quite a bit today. But look at S&P the last 20 minutes. Wow.

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The night is long and full of terrors

NNOX opened up +33

Monday Macros

Rates War is About is Starting... Will 10 Years Be At 2% or 1.50% First...EQ Up

Friday's employment number has started the next level in the rates war... Will the 10 year be at 2% or 1.50 next?... We are not sure... The employment growth ,with revisions , was well over 1 million... And the expectations for the next three reports will probably all be over 1 mm.. The Powell 10 million jobs lost mantra is now down to 8.5 million and it could be below 5 million by the end of the quarter... This all based on vaccines versus any stimulus that has been passed in the last few months...Eurodollar contracts on rate rises next year and a total of four by the end of 2023... We expect talks on tapering will start in earnest this year... But hold on, asset managers are starting to build some long positions based on the latest CFTC report... And parts of the bond market are reacting differently... 5 years took it on the chin in a holiday shortened trading on Friday... The 5 years backed up 7 basis... The 10 year only marginally and the long bond not much at all... Inflation expectations and break evens are much higher for the belly and go down from there as one goes out the curve...5 years are at 2.60 while 10 years are at 2.37.

Overnight there was not much to talk about... 10 years are hovering where they went out on Friday at 1.72... Equities are better, but not much different from where equity futures closed Friday morning... Russell 2000 and S+P 400 mini are doing best... Europe is shut down for Easter Monday... We expect today to be rather slow... IMF meetings start... Two things we expect to affect markets is both the Powell and Yellen speeches this week in front of the IMF... Powell will talk on Thursday trying to convince his Central Bank colleagues and planners that now is not the time to increase rates or to take one's foot off the gas pedal, even though we think the Fed is taking their foot off that pedal slowly... And Yellen will talk about a global minimum tax in order to get in front of the Biden increase in tax rates being proposed in the infrastructure bills... That will fail... We see 6 other speeches and the FOMC minutes, which we now view as backward looking as the dam has been opened for rapidly rising employment.

Corporates...High yield is opening at the tightest spreads since 2007... And we do not think that is over. Treasuries got clobbered in the first quarter with TLT down about 14%, ... IG was off 5.5% for the first quarter but up over 8% YOY. High yield was up marginally in the first quarter but almost 19% YOY.. Munis were off .66 in the first quarter but up 4.86% YOY. The ICE BofA US Corporate bond index lost 5% for the first quarter, the worst since 2008, in the GFC.and other than that the worst since 1981... Expect less supply in 2021 in IG from last year, but HY has more room to grow.

Inflation is here, but you still have to look for it outside of grocery stores. But it is clear in housing costs . Construction costs are already rising rapidly with the Census Bureau reporting a 6.7% YOY increase in constant quality construction costs in February, with framing lumber nearly tripling in price over the last 12 months. Scrap steel prices up 67% and Copper up 73%

So where do we go next? Traders bailed out of bets of stock market calm. Net short non commercial positions in CBOE Vix futures shrank for 6 weeks to their lowest since the beginning of December... This tells us to expect more volatility in equities.. The war will be fought between those that see the economy exploding versus those that factor in tax increases slowing down the economy looking out a year... And those in the rate space that are worried about the belly and looking for 2% 10 years, versus those that think a stock market correction is coming and think rates will go lower... Our view is still 2% 10 years first, but we understand the other side...