The Macro SetUp Podcast with Guy Adami & Dan Nathan

by Dan January 12, 2021 4:45 pm • FREE ACCESS• Macro Setup• Podcasts

Guy Adami and I are back with the Macro SetUp brought to you by our presenting sponsor Nadex, the leading U.S. exchange in binary options, knockouts, and call spreads.

This week we discuss what would appear to be investor Euphoria playing out across many different risk assets, increasingly stretched equity market valuations, the stretched technical setups in the major U.S. equity indices (SPX, NDX & RTY), rising rates, the USD bounce, and Gold’s malaise. Watch below and see notes and charts below that

Show Notes & Charts:

Topics:

  1. Market Euphoria
  2. Valuations
  3. Political Risk
  4. Policy Risk

 

From our Friend Peter Boockvar (Bleakley Advisors & The BoockReport)

It was not surprisingly November 9th when market sentiment began to inflect higher again, after already riding the wave of summer reopenings and the continuous pace of massive Fed interventions. In particular, we know we’ve seen sentiment get very giddy over the last month as the Investors Intelligence figure saw Bulls rise above 60 and its spread to Bears above 40. The AAII numbers finally saw the Bulls get back above the level of Bears with the former now at the 2nd highest level since January 2018. We also saw multi-decade lows in put/call ratios and the Citi Panic/Euphoria index got to 4 times the euphoria threshold.
As we know sentiment follows price, it should not be unexpected that we’ve seen this especially after the tough 2020 we had to endure personally and economically and the light to come with the vaccines. We have to now wonder though whether this rubber band of ebullience is getting so stretched that something is ahead that can trip up the mood. I say this today because the newly updated Citi Panic/Euphoria index has now gone literally parabolic (see below).
Bitcoin:
1yr
Bitcoin 5yr (log)
Tesla (TSLA):
Equity Valuations:
SPX 1yr: ~14% above its 200-day moving average.
NDX 1yr: almost 19% above its 200-day mva
Russell 2000 (RTY) 5yr: 35% above its 200-day mva
VIX 2yr chart:
10yr US Treasury yield, 5yr chart:
10yr US Treasury yield, 30yr chart:
US Dollar Index (DXY) 1yr chart:
US Dollar Index (DXY) 5yr chart:
Gold XAU 1yr:
Gold XAU 10yr: