I hope you’ve all had a lovely Sunday.
Yet another interesting week for markets. A lot went on in the past week, Jerome Powell’s comments which lead to a rapid repricing for 50bps at the next FOMC meeting, NFP on Friday, and of course the SIVB 0.00%↑ blow-up. Payrolls remain too strong, not sure they settle the 25/50 bps debate with CPI around the corner but labor participation and wage growth were at least a step in the right direction. With what is in front of me and given SIVB, I remain on the 25bps side of the debate - I am sure Jay will say 50bps was discussed though.
I found stocks and indices difficult to trade, trade of the week/year was a Eurodollar (Dec 23 - GEZ3) long from 94.2 to 94.815. Followed by long 10yr futures at 110’30 (still open, but, trimmed) and a 03/17 112/113 ZN bull call which cost 12/64 not long ago. Equity trade of the week was a GE 0.00%↑ 03/17 86 straddle ahead of its analyst day which cost 3.6 and was sold for ~8. The worst performer for me was BAC 0.00%↑.
A lot of noise for equities and more to come, CTAs are now heavily short S&P with yet another flip on flat tape flows from buy to sell. Further supply to come from that community. Will discuss more in-depth about this later on.
I must say stocks baited me into expecting a move upward last week. So overall stocks were a drag on my book this week but with my beloved Eurodollar trade, ETF shorts, as well as 10yr and some VIX call spreads, I ended the week green.
Today’s post won’t be too long as sadly one of my cats passed away this weekend and I have also been moving.