Economic news

US mortgage arrears are spiking. Not really a surprise, but Wolf gives the details. Headlines can be misleading, as mortgages in forebearance are not counted.

Silver seems to be breaking out. I don’t really know why, but it seems a thing. I somehow feel it’s linked to weaking dollar, but I may be totally wrong.

Market News

China to bar large withdrawals following surge in bank runs: this article was followed up by Bloomberg somewhat later. The FT does not seem to have picked up on this story, but it surely is important. I have been waiting for the cracks to appear the Chinese rally. The whole system is rotten: totalitarian regimes rarely have strong stock markets. The only thing to worry about is whether the PBoC will allow the RMB will slide to save the stockmarket. I’m sure that Xi Jinping and his cronies are very busy right now shipping their wealth out of China. There is the usual Twitter noise about this week being the one where the $SPX drops 10-12%. It’s hard to see it happening, but the FAANGMAN (FAANG + $MSFT, $NVDA, $AMD) have got way out of whack with the rest of the index. A reversal trade (long RoI, short FAANGMAN) might be worth a bob each way, but it’s hard to structure.

I keep thinking that a vertical calendar spread (I think that’s what it’s called: diff. strikes & expiries, short puts) on some of the FAANG stocks might be worth a punt too. But, please don’t try this at home (I have to think a lot more about the payoff profile before I try it).

Analyst Ratings

Sell side analysts are in a difficult position. Their employers earn income from the buy-side actually, y’know, buying stuff. So, they rarely rate a stock a sell. Almost the worst they can do is to make the stock a “hold.” (Well, they wouldn’t want fund managers who bought on an earlier recommendation to feel cheated!) I get emails telling me about changes in analyst ratings. The delta probably says more than the level. The following stocks have at least one “Sell” recommendation: $GSX, $HSBA, $RCL, $W. The following have at least one “Underperform:” $HSBA (actually, 11 of them!), $RCL, $W. $MRNA got a pile of new “Buys,” just as the insiders are dumping their stock. It’ll be interesting to see what happens.