KC O'Rourke

Watch what they do, not what they say.. Although widely expected, the ECB cut rates today for the first time in 5years, supporting the significant overall bond yield declines we’ve seen in June. All 3 rates (Main, Marginal, Deposit facility rate) were lowered by 25bps, and Christine Lagarde repeated her ‘no preset,’ data dependent course on them (the market is pricing in 2 more cuts for the remainder of the year). The tricky part was they also raised Inflation forecasts to 2.5% in ’24 Vs. 2.3%…

If Nvidia’s beat and raise can’t rally the market is it time to buy a few cheap puts?? NVDA +10.4% (precisely what the options market predicted) did its part and European shares tried to rally along most of the day led by Technology (semi’s heavy) and Industrials (sort of like a stand-in as Europe’s “other tech” when Luxury names are out of favour), with Growth outperforming Value by a wide ~1% margin. The UK was the distinct laggard hit in large part by the soggy Utils sector after Rishi Suna…

This market is in need of more cowbell. With excruciatingly low volumes and a VIX that’s now kissed an eleven handle twice this week (double bottom signal?) this market has been described as sleepwalking into its 24th all-time high of the year for the S&P 500… Nobody is really complaining, and we have plenty of interesting news – a CPI that sent yields higher while also reducing the chance of a June BoE rate cut from 50% to a now 20% probability (reading was helped by lower energy prices, but…

Bolstered by renewed rate cut expectations after the Powell press conference and the cool payrolls last week, long May Day weekend dinner table conversations seem to have included a few bulls asking – Have Yields peaked?? Or so it seems – as we have hit the ground running with every sector trading higher today in Europe following the strength in the U.S. (all their major averages above their 50dma) as the market is now pricing in two rate cuts this year (US2yr under the 5% potential peak). Ano…

May Day holiday tomorrow, so we got what feels like 2 days in 1 with plenty of volumes, news, and interesting ideas… HSBC kicked it off out in Hong Kong and rallied 4% on numbers as CEO plans his exit, Samsung +2% on strong AI demand, GALP hit record highs on their quarter, Whitbread gained 4% on the buyback and cost cuts (but needs overall trading to improve to get us positive), K+S guided higher mid-morning, and then PLAYTECH rallied 18% the past 2 days yet has us all looking for news to ju…

So we got a little ahead of ourselves.. This may be best illustrated in Commodities, which saw their largest monthly allocation increase since 2006 (plot for the Big Short comes to my mind) – a rather startling reminder of how aggressively underweight some areas of the market remain when investors rush to balance their books (see visuals on the Copper & SXPP Index charts, which should include the caption “fomo”)…. And, with Powell finally throwing in his towel for June rate cuts Tuesday (partia…

Where did everyone go? Easter holidays seem like this quaint, chocolatey long weekend, but considering the U.S. stock market never shuts more than three days, this European ‘four day-er’ is a proper break in the action.. And markets have taken the hint, as risk appetite feels like it’s shot down the rabbit hole already with the month (and year) to date winners being sold. FAANGS -40bps as the worst sector, but A.I. leaders NVDA & SMCI both -2%, growth names like Flutter & Draftkings -7% each,…

I was tasked with dressing, feeding and taking my two young kids for their school play earlier this week, all the while working from home. It seems straightforward but is funny when even a simple (it’s major) thing like my 5 year old refusing to put her clothes on throws off all of my timing. Clothes over food, toothbrush over hairbrush, gotta pick your spots and do the best you can. Today’s market felt a bit similar. Between Feb month end with MSCI rebalances, another cooler inflation read cr…

I was asked today if Bitcoin was a safe haven currency at the moment. Unsure exactly how to answer this one without my mind wondering/wandering around speculative bubbles (and central bank QE policy hedges) in general, I kept reminding myself that understanding when to buy and sell something “safe” can be difficult in any environment, but identifying bubbles (be them tulip bulbs, Japan real estate in the 80’s, Internet stocks, China property, venture capital valuations or NFT’s in late 2021) is…

Some days are for exclamations of fact, let’s get started.. Mega Bullish patterns throughout Asia, US and European equities led by NVIDIA’s (+15.5%) enormous quarter driving tech shares across the board, with perhaps the most notable you-don’t-see-that-everyday occurrence: Japan rallying past their 1989 all-time highs! (hat tip to Tokyo Electron out there). Not to be out done, our Dutch BE Semiconductor rallied 12% (closed only +5%) on the key Hybrid Bonding adoption – the most important drive…