evening wrap

market vibes

March 6… )

“The first time I went to see President Trump he looked at me and said ‘How do we get this debt and deficit down without killing the economy?’ I’ve been thinking about this for 18 months… 25% of GDP goes through Area Code 202 (*Washington DC)” Scott Bessent via Miranda Divine, NY Economy Club, March 6.

In Stocks today:

The very long and dull range above 6000 S&P since the November election has resolved decisively lower confirming distribution of risk from strong sellers to weak buyers (rectangle chart below). Can stocks rally now? Of course. The stock market is changing not dying, not yet!

Long time frame buyers have been persistent for months in the face of constant rejection because the Trump trades are not dead. They were simply mispriced. Money is moving because it has been habituated to a very passive type of thinking for years and old habits are being broken by margin calls and losses. This is an adapt or die environment.

The distribution of risk noted in the chart below is partly rotation, partly disintermediation to bonds and cash and partly the shifting of FX carries as USD fell 4% in 4 days.

There’s no panic but there is some serious revaluation that is not over. In my opinion.

A general discussion of news and views follows forthwith to wrap up the NY session. Most markets were surprisingly featureless so charts and technical analysis are limited to equities tonight. Here we go.