The Week Ahead

Volume 127 - Recession or stagflation?

After three relentless weeks of pressure driven by endless tariff noise, positioning resets and cautious macro sentiment, you’d be crazy not to respect the downside risk lurking if support was to get flushed. The narrative hasn't changed dramatically, but let's dive into what matters right now.

Last week was macro-chop hell, ending with SPX down -2.3%, NDX -2.5%, and RTY -1.8%. Semis, financials, and industrials bore the brunt of LO selling. Hedge funds swung from aggressive de-grossing early in the week to re-grossing US equity exposure post-CPI. It does feel like participants gained some confidence last week; just remain fearful.

TMT has been at the epicentre of the volatility. Semis have faced massive LO selling, but signs of index stabilisation encouraged selective buyers late last week. As I have noted to subscribers, some quality/larger cap names look attractive to dip-buy despite overall index not looking great.

I’m entering this week bullish with an open mind considering that FOMC is on Wednesday. From a technical standpoint, I think >5800 is possible for ES (Jun).