SignalPlus Macro Analysis (20240305): Crypto markets surge, sentiment remains high
Traditional financial markets were range-bound yesterday, with stocks consolidating in recent ranges, but the overall yield curve moved higher as corporate bond supply increased. Powell is about to testify before Congress on Wednesday/Thursday. Companies are rushing to conduct bond issuance in the first two days of this week. It is expected that 30-35 billion US dollars of bonds will be priced within 48 hours. The main news yesterday came from Atlanta Fed Bostic, who expressed concerns in an article that the interest rate cut may release new demand, thereby exacerbating price pressures. He further stated in the QA that he expected that after the first interest rate cut, there may be a temporary pause. To assess the impact... we hope to maintain the current pace of balance sheet reduction as much as possible.
This week will see a series of speeches by Federal Reserve officials, including Daly (Wednesday), Kashkari (Wednesday), Mester (Thursday) and Powell (Wednesday to Thursday), and the market will pay close attention to whether there is further hawkish adjustment information.
On the stock front, there was no particularly eye-catching news, but Bloomberg pointed out that the concentration of SPX performance has reached historically extreme levels, and the proportion of constituent stocks that outperformed the index is at its lowest level since the dot-com bubble. In other words, the SPX indexs The rally has been driven entirely by a handful of stocks, such as Nvidia, and even long-term stables like Apple and Tesla have lagged the index year-to-date.
While much of the stocks outperformance can be attributed to huge EPS growth, there are still reasons to believe we may be approaching a medium-term top for stocks, with risk sentiment rising across nearly all risk asset classes (equities, credit, crypto). On the verge of losing control.
On the cryptocurrency front, major currencies/altcoins/memecoins are all gapping higher, and investors are all over X/Twitter mentioning huge gains. In terms of ETFs, trading remains active, with trading volume reaching $5.5 billion, the second-highest daily trading volume since its launch, according to Bloomberg.
The current perpetual funding rate is very high, with the annualized rates on many exchanges soaring to more than 50% during the weekend, and the BTC futures basis also widening to around 30%. The FOMO phenomenon is even more pronounced in options, with a massive amount of $70,000 to $80,000 in call option buying in the past 24 hours. Market sentiment continues to rise, and expectations that BTC will hit $100,000 before summer have also begun to rise. We remind everyone to pay attention to risks and be careful!
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