Market Review: the inconsistency of incoming inputs.
The market is a little rushing about due to the inconsistency of incoming inputs.
Either there are data about the economic slowdown, or vice versa. Bond yields zigzag against this backdrop, creating volatility in every other asset class.
The news came out today that China is halving the quarantine period for those entering the country.
By itself, this is unlikely to boost the economy much, but it is an important sign of a gradual move away from the “zero tolerance for COVID” policy, and this is already a serious incentive.
Investors in stocks immediately rejoiced, while investors in bonds, on the contrary, were upset and brought down the price of government bonds a little, reflecting growing expectations for economic growth, and hence inflation.
Meanwhile, data on "consumer confidence" in the US is coming out a little later today, and everything can change 180 degrees if the data comes out weak.
We believe that there is no point in drawing big conclusions from this volatility in the near future, because there remains a strong positive momentum in equities due to portfolio rebalancing by large funds.
This is confirmed by the falling VIX (and VVIX, that is, the volatility of the VIX itself), and attempts to grow from the side of the crypt.
But tomorrow or the day after tomorrow we plan to close speculative longs taken for rebalancing.
Either there are data about the economic slowdown, or vice versa. Bond yields zigzag against this backdrop, creating volatility in every other asset class.
The news came out today that China is halving the quarantine period for those entering the country.
By itself, this is unlikely to boost the economy much, but it is an important sign of a gradual move away from the “zero tolerance for COVID” policy, and this is already a serious incentive.
Investors in stocks immediately rejoiced, while investors in bonds, on the contrary, were upset and brought down the price of government bonds a little, reflecting growing expectations for economic growth, and hence inflation.
Meanwhile, data on "consumer confidence" in the US is coming out a little later today, and everything can change 180 degrees if the data comes out weak.
We believe that there is no point in drawing big conclusions from this volatility in the near future, because there remains a strong positive momentum in equities due to portfolio rebalancing by large funds.
This is confirmed by the falling VIX (and VVIX, that is, the volatility of the VIX itself), and attempts to grow from the side of the crypt.
But tomorrow or the day after tomorrow we plan to close speculative longs taken for rebalancing.
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