Index-Capital

Index-Capital

The market is a little rushing about due to the inconsistency of incoming inputs. Either there are data about the economic slowdown, or vice versa. Bond yields zigzag against this backdrop, creating volatility in every other asset class. The news came out today that China is halving the quarantine period for those entering the country. By itself, this is...

Index-Capital

The market has not yet managed to reach 3500, and most likely it will not reach this month. We believe that the market will grow until the end of the quarter, and we tactically open longs for the amount that, in a bad scenario, we are ready to hold up to 3500. In addition, we aggressively sell put options at the 3500 level. The reasons for the growth are purely...

Index-Capital

Why? 1 - inflation came out higher than expected 2 - long-term inflation expectations in America have risen to 3%+, and this is already dangerous. This means that people begin to think that inflation is with us for a long time, behave accordingly and exacerbate inflation even more. This must be stopped 3 - on Monday, the Wall Street Journal and other media...

Index-Capital

Although stocks fooled around all day yesterday until they were bought off, high-yield bonds rose, breaking further and further from the lows. This once again underlines our thesis that the demand for government bonds is caused not only by the desire of investors to escape from risk (as some people think), but by the confidence that the worst is over. Because...

Index-Capital

1. Bonds turned up / yields down, and along the entire curve (wrote many times). One can, of course, argue that this growth happened on the flight from risky instruments. To this we object that if investors were waiting for a further increase in yields due to inflation or because of the Fed, then they would run from risk into cash, and not into bonds, where there...

Index-Capital Updated 

First, we once again resolve our targets for a 7-10% market rebound. This is about 4150 - 4250 in S&P 500 futures. Secondly, if by that time inflation really starts to decline, the economy does not slide into recession, then the rebound will turn into a new phase of growth - then the patients' goals will be higher. We still estimate the probability of such a...

Index-Capital

Barely anyone has expected we would get this far this fast in terms of Russian actions in Ukraine and it would be dangerous to have illusions about how it could all end. What we can do now is attempt to assess probabilities of various scenarios. We could assume that in scenario number one Russia and Ukraine negotiate and agree on a settlement. And the probability...