Stocks & Crypto Soar In Shortened Week As Rate-Hike Odds Surge

Stocks & Crypto Soar In Shortened Week As Rate-Hike Odds Surge

After Sen. Manchin stole the jam out of the progressives’ donut over the weekend, sending stocks slumping, it appears investors have BTFD ahead of the Santa Claus rally…

Let’s hope they are not disappointed…

Because, as Tom McClellan points out, it’s not a lock…

Recovery stocks have soared this week as details on Omicron have become clearer….

Source: Bloomberg

After an ugly Manchin-Monday, everything ripped. Utes ended the week in the red with Tech and Discretionary leading…

Source: Bloomberg

As Goldman’s Chris Hussey noted today, figuring out just what ‘live with the virus’ means for reopening stocks is likely to be a key alpha generator in the year ahead. How will an evolving approach to seasonal virus waves impact school, return to work, urban living, live events, and travel? Markets have been struggling with answers to these questions for almost two years now, and we still do not have the answers.

TSLA soared again today and is up over 20% from Tuesday’s lows after Elon Musk said he was done selling… but not really…

VIX was clubbed like a baby seal all week after the Manhcin kneejerk…

Treasury yields were higher on the week

Source: Bloomberg

While stocks are ahead of the pre-Omicron levels, long-bond yields remain lower for now…

Source: Bloomberg

But we note that STIRs continue to hawkishly push higher, now fully pricing-in a rate-hike by May 2022…

Source: Bloomberg

The dollar closed at its lowest since 11/18 after rejecting the pre-Omicron highs…

Source: Bloomberg

Cryptos had a decent week, rallying hard today…

Source: Bloomberg

Bitcoin surged back up to $51k, breaking out of its down-channel and off its 200DMA…

Source: Bloomberg

Commodities were all higher on the week, led by a surge in oil…

Source: Bloomberg

WTI is back at its highest since pre-Omicron…

Gold topped $1800…

Finally, as The Market Ear notes, “Risky” factor drawdowns often coincide with market drawdown, but not this time…

JPM: “In the near term (1-3 months), the recent factor drawdown seems overdone and there could be a modest rebound if risk appetite improves. However, in the medium term (i.e. 3-12 months), will it take a “risk reset” to get these factors to sustainably rebound, and thus HF longs could remain choppy for a while longer? Put another way, can these factors snap back without a larger S&P drawdown or is this a sign that the market is breaking down and we need a larger S&P decline (i.e. “risk reset”) to get these factors to recover?”

Tyler Durden
Thu, 12/23/2021 – 16:00

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