Biden's Infrastructure Plan, Month-End Rebalancing

31 thg 3, 2021

- Welcome to the final trading day of Q1, folks! Futures were relatively flat in the overnight session ahead of Biden's long awaited Infrastructure announcement today, which should see a proposal in the realm of $2.25 Trillion tackle roads, bridges, and the EV market, among others. I have no idea why the Biden administration would raise taxes to pay for it, since they could just ask the Fed to print the money as the government has seemingly become addicted to lately. The government just created Trillions of dollars out of thin air to give to households (printing GDP), making the working class notably poorer (debasing the dollar), and now they're going to ask for it back via taxes? SMH.

- The US10Y Treasury yield found support at the 50MA (h), and looks poised to cool further on potential higher (quarter end) inflows into Treasuries (41B), at least according to Bank of America. JP Morgan called for as high as $316 Billion in month end equity outflows. However, it's day of, and we're seeing a lake of a market out there. Unless we're about to see a colossal single day puke, markets appear unphased, and poised to continue to melt higher.

- The S&P is set to open up around 0.20% to 3,955, with the Dow flat at 32,925, the Nasdaq up 0.70% to 12,969, and the Russell up around 0.53% to 2,204. It's insane to see critical supports broken, only to be recaptured on yet another low volume melt up. The bears (sans me and a few others) are extinct, and clearly, price no longer means what it used to. With both demand and supply being controlled by central banks and governments, the price of assets are essentially meaningless. The distortion is becoming aggressive, but at some point, I still believe we're going to see the entire house of cards fall. I've said it a million times, it's all a ponzi, and the lack of productivity is becoming a major problem for the real economy, and for our future prosperity, and that's not the half of it.

- Vix is being sold off this morning as we approach the open, with support at the gap fill from Feb 2020 around 18.80. We're currently trading at 19.20 as of 8:45AM.

- European markets traded lower, with the CAC40 down by 0.10%, and the Dax down 0.14%, with the FTSE 100 down 0.24%, and the SMI down 0.16%. Asian markets were also lower, with the Hang Seng down 0.85%, the CSI 300 down 0.90%, and the Nikkei 225 down 0.75%. The BOJ apparently said they're going to taper bond purchases in April. WTF? Did I read that wrong? Nope...

- Gold is up around 0.10% to 1,687, after an ugly session yesterday, with Silver down 0.18%. We're now trading around 24.09. Platinum is up 2.5% after losing the 21 day EMA and 50 day MA yesterday, but is retesting as we speak, we're now sitting at 1,182. Copper traded higher by 0.88% to 4.00, and Palladium is up by 1.5% to 2,628.

- Crude is down slightly, with WTI down just 0.20%, and trading at 60.40, and Brent down 0.30%, and trading around 63.96.

- The US Dollar (DXY) tagged a new recent high around 93.43, and is cooling slightly as we approach the open. If we see any signs of risk-off from month end selling, or potentially a sell-the-news reaction to Biden's infrastructure, we're going to see the dollar skyrocket. Our monthly target is 95.25.

- On the data front, we saw the MBA Mortgage Applications Index fall by -2.2%, and the ADP Employment Change rise by 517k, vs the 525k expected. Next we'll see Chicago PMI, then Pending Home Sales, EIA Crude Inventories, and of course, tomorrow we have Jobless claims, and the ISM Manufacturing Index, but as I mentioned on Monday, the number one print I'm looking forward to this week, is March Payrolls on Friday.

*I am/ we are currently holding positions in UVXY, HUV, HQD, QID.