Authored by Lance Roberts via RealInvestmentAdvice.com,
For the last couple of months, we have discussed the risk of the narrowing of leadership as money piled into an ever reducing number of primarily large-cap technology stocks. To wit:
Via RealVision.com,
If You Only Look At One Chart…
Time is short, so here is one chart to get you thinking in a new direction.
Velocity of Money (M2)
M x V = P x T
Source: Bloomberg
The chart that no central banker wants you to see
Velocity and inflation will continue to fall as long as debt compounds faster than GDP growth.
Well that escalated quickly...
This morning's Amazon acquisition of Whole Foods Market has collapsed share prices of many grocers (in US and around the world), pharmacies and drug distributors, and even REITs...
First things first, 11 of the top 12 biggest losers in the S&P 500 are related to AMZN's move...
It's a bloodbath in US Retailers...
But it's not just US Retailers... European Grocers are crashing too...
Today is quad-witching opex Friday, and according to JPM, some $1.3 trillion in S&P future will expire. Traditionally quad days are associated with a rise in volatility and a surge in volumes although in light of recent vol trends and overnight markets, today may be the most boring quad-witching in recent history: global stocks have again rebounded from yesterday's tech-driven losses as European shares rose 0.6%, wiping out the week's losses.
With Nasdaq 'VIX' reaching 15-year highs relative to S&P 'VIX' in the last week, we suspect tomorrow's quad-witching will be a little more noisy than normal as traders scramble to cope with $1.3 trillion of expiring S&P options...
JPMorgan's Marko Kolanovic lays out the details...
In our view, it will be difficult for the market to go much higher from these levels (~2,450) unless there is meaningful progress on US fiscal reform (i.e. tax cut).