2023-02-03

Wrap for Jan

The new year has started with a bang. Most risk assets are up a lot:

• SPX +6.3%,
• FAANG +18.7% (in spite of crap earnings),
• STOXX 60 +6.8%,
• USTs +2.8%,
• Other sovereign bonds (e.g. gilts +2.8%),
• Industrial metals (Cu +10.9%),
• EM everything (equities, bonds and FX),

• Crypto (not a real asset, but BTC up 38.8% nevertheless).

  Most of these changes were given a tailwind by the DXY (dollar index) being down again, by 1.4%, back to ~102.

However, it’s not all good. Energy has had a dismal start, in spite of being priced in dollars. Natty (natural gas) was murdered (down 40% near-month futures), and oil (WTI futures, near-month) was down 1.7%. Note that oil is still in a stiff backwardation, indicating continued supply shortages. However, I find it hard to believe that eight years out oil will still be trading at around $50 in 2031 dollars.

Anyway, that’s it from me. I will be away for a couple of weeks, so updates will be sporadic and probably holiday themed. I may post some nice pictures.