This should be good for SNDL this week

https://www.reuters.com/world/us/us-republicans-move-decriminalize-marijuana-federal-level-2021-11-15/

PTON couldn't possibly go lower…

2021: Hold my beer

*Peloton Interactive Begins $1 Billion Public Offering of Common Stock $PTON

— *Walter Bloomberg (@DeItaone) November 16, 2021

Tuesday Macros.....

Goldman Raises S+P Target to 5100 ....Fed Decision Imminent...Big Move Ahead

The S+P futures tumbled after going higher as the Biden/Xi call was going on, then dropped to the lows of the overnight session until Goldman came out raising their S+P target for 2022 to 5100, up about 10% for 2022...Meanwhile the treasury market is in waiting mode after dropping on the implementation of tapering yesterday... 10 years hit 1.63 yesterday while 5 years hit 1.265...we think this is the beginning of the next leg lower in treasury prices... It did not preclude IG corporate issuance, where one service said 22 billion came yesterday while another saw it as 19 billion... Either way a good start to the week, and as we have said all along, as long as new issue credit issuance is solid ,the credit markets, and more than likely the equity markets, will be ok for now.


Retail sales and Industrial Production are out today and could be noisy, but all indications are that the economy is strong... We have 6 Fed speakers today... Bullard will be on BB TV...other Hawks are out there, being George, Harker and Bostic... Daly will speak later...Bullard, Harker and Daly look like market related topics...BUT THE REAL MOVE WILL BE THE FED CHAIR ... Announcement where the Senate banking chairman was told it was imminent... No later than Thanksgiving... Outside of a blip of uncertainty, we doubt that either choice can avoid raising rates with the current inflation numbers... Fed is so far behind the curve we do not see how a major correction can be avoided, but probably not until the first quarter of next year...We read a Jefferies piece yesterday where they think 2022 is the "War For Labor" where unemployment gets to 3%, creating the tightest labor market since the 1950's... Tight labor markets mean higher wage inflation.

Watch out below.. The Move Index, an index showing the yield curve which is a yield curve weighted index of the normalized implied volatility on 1-month Treasury options. It is the weighted average of volatilities on the CT2, CT5, CT10, and CT30. Treasury volatility has move up over 20 points since mid October, about 33%... 81.59, highest since April 2020... Meanwhile, the US Government Securities Liquidity Index closed at a 20 month peak last week, indicating worsening credit conditions...

Rates... 10 years had some support yesterday at 1.62, then 1.70 after that... Resistance is 1.57 and 1.52... 5 years got through 1.25 yesterday but did not stay there long...we still think 1.31 is the next objective... ..we think rates are going higher. Long bond seems sticky around 2%, but more concession needs to be built in for the 20 year tomorrow.

There continues to be strong interest in the credit space by overseas investors... One broker reported that they saw buy interest for over a billion of corporates in the overnight session... So while we are bearish on treasuries, the credit space seems good for now...