Sell-Off Expected: Treasury Unleashes $100B+ in Debt This Week

So what is happening now?

I feel like I’m the only voice in the wilderness, I haven’t read much about anyone. I’m probably going to be embarrassed again and make Mr. Market look like an idiot. he always does. The forecasting industry has been doing pretty well for the last five or six months, so I think I’m at that point. That aside, with nearly $600 billion of debt impacting the bond market, I think we have a good case for a little check on market direction. We showed you the chart last week, and now you know the full schedule of bond sales (if nothing has changed in the last 24 hours). He also said that to around 3800 he could drop by 10%.What does it bring to the new “Magnificent Seven” Megacap technology name title: Alphabet (Google),Amazon(AMZN), apple (AAPL), meta(meta), Microsoft (MSFTMore), NVIDIA (NVDA), Tesla (TSLA). Please note that these names are very sensitive to high interest rates. To assess the potential damage to these stocks, we need to turn the clock back to when 10-year rates were at their peak. Now let’s see where the Nasdaq 100 and S&P 500 were.

March 2nd is the day when the 10-year government bond reached 4.08%, and it is also the speed at which interest rates fly. Let’s not forget how fast interest rates have moved in his 12 months. Now let’s look at the March 2nd low. On March 2, the Nasdaq 100, represented by the Nasdaq 100 ETF (QQQ), had a low of 288.37. It is currently at 354.65 and the S&P 500 low, represented by the S&P 500 ETF (SPY), was 392.33. It is currently 427.92.

Magnificent 7 Mar 2 Jun 2

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I’m not at all saying that any of these “Magnificent 7” stocks will return to this low. I know many market participants hide behind these names. What’s more, we know that on Friday, the rally was broader and involved different sectors, just as a healthy rally should be. We also know that the VIX has fallen to his lowest level since February 2020. That was when the Fed was helping to inject massive amounts of cash into the economy. Did you know that the money supply (M2) is shrinking rapidly right now? There aren’t many opportunities for economic news to boost stocks this week. The Fed is still tightening quantitatively. Local banks limit lending to only the most risky ones. Can you quantify exactly how many hundreds of billions of dollars will actually come in this month? would withdraw. Remember, they have to issue a ton of debt right away. You can’t get around it. By the time the Fed tells the Treasury to ease monetary policy, stocks will have fallen significantly as the credit markets act as if they are freezing other bond issuances.

So, we’re probably expecting -4% to -5% this week and another -4% next week. Hopefully less. We know there are good reasons the stock market should be more resilient now. I don’t think there will be any more interest rate hikes. Although June is considered a skip. Additionally, could you give us a little insight as to why the Fed is “skipping” this week? I would argue that it looks like an amazing .75% move. It was simply due to the large amount of debt and the inability to move it without making a much higher offer than expected. I think in 10 years it will be back to 4%, or very close to that. Also, don’t forget that 2-Y is also approaching 5%. Otherwise, why stay in that money market fund for only 4%?

Which stocks would really be hurt in a rate hike scenario?

The easy answer is underperforming stocks that rely on offerings to fund their growth. Most of them work hard to fund internal growth. The next level is stocks that are using cash flow to reinvest in the business to grow their earnings faster. Most of these stocks are trying to cut costs so they can grow and turn a profit. In addition, there are growth companies that raise money for growth internally and enter the credit market to grow faster, while still making a modest profit. All of these stocks are hopeful that rapid growth today will lead to higher profits in the future. The problem with this is that they are paying interest to grow, and the more they borrow now, the lower their future repayments will be at this high level. I happen to not believe in this logic, but the market does, and that’s all I care about. The market will condemn all these companies for stealing credit. It also hurts even non-debted but organically growing stocks as investors put their money into the 5% T Bill and get a risk free return. Then wait until the company is more mature for investment. This is not very good considering the current value of growth stocks. What are the best growth stocks in this scenario, the stocks that grow and generate dividends like many of the Magnificent Seven? But even they lose points in such an environment. I doubt they’ll go back to where they were over two months ago, but they’ll take a hit.

what was i doing

Well, I clung to the hedge as much as it hurt. I still have SVXY, SPXL, TQQQ and SOXL puts. We are also long the NVDA Inverse ETF (NVDS), opening the VIX call option at 17 strikes. Also, I invest all of my free cash in a number of biotechs that are growing very well. Two of her I chose gave oral presentations at the ASCO Annual Conference. Geron (GERN) and ImmunoGen (IMGN). I should have mentioned it before. We should ask, “Will a stock like this, which will be profitable in the future, not be hurt by rising interest rates?” Yes, some of them will. These micro-cap bio companies only offer secondary products when there is good news like this. In general, if the news is legitimate, secondary stocks are bought and the stock price holds or even rises. I somehow tend to find canonical microcap biotech. I think I was just lucky. So should I sell this week? We might sell these call options, but most of them are due in December or January 24, or longer, so it seems silly to do so. I might write some calls about them. I let the group mind community jump over the T-Mobile (TMUS) hoopla with AMZN and DISH. There have been rumors that AMZN is in talks to resell his Cell service through Verizon (VZ) and AT&T (T). Everyone got busy denying it, except for the DISH Network (DISH). Yet TMUS continued to fall, and I bought up stocks and received long calls. I’m pretty confident the call option will work (currently +29%). Due to the speedy transaction, we will probably close tomorrow. If the dish holds most of the 16% it won on Friday, I might just run a long put on it. I did a bunch of his PUTs last week before C3.ai (AI) closed. AI is up 33% in one day compared to the day before the AI ​​hype. It worked very well with them and we closed most of our deals on Friday. If for some reason they rally, I will get back to them right away. why? Did Wedbush not up the ratings? Well, the quality of their income is not that great. There are two short selling funds with a short interest rate of 33%. This means that the short cover will take profit once it starts to fall. In my opinion, that means AI hasn’t bottomed out yet. If the short-selling interest rate goes down to 10%, I think AI will show its true value. Also, this is very subjective, but I feel uncomfortable with the way the CEO speaks and looks at the camera. Lol, this is not your typical stock market commentary, so take it if you like. In summary, don’t expect a big reaction on Monday or even Tuesday morning, but at some point interest rates will spike and stocks will move in the opposite direction. My Groupmind members have asked me to create a convincing buying list to take advantage of the sale. In addition to the obvious growth, a list of industrial/defense related names is also mentioned as infrastructure spending and defense supply continue to generate growth in this sector. You know most of my favorites. Don’t worry I will share when members are able to purchase first. Good luck everyone. If this prediction were proven wrong, you would probably get a good laugh… c’est la vie.

Have you ever bought a stock that everyone said was great, only to find yourself buying it near an all-time high or all-time high, only to find that the stock immediately fell 20%? By the time the average stock buyer comes up with a stock idea, the stock is usually already overbought.

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