#riskmanagement

Marc Bentin

3 days ago
6 min

No Hike Won't Hurt …

BentinPartner Weekly Last week alone, the Fed put back on its balance sheet some USD303bn, split evenly between the use of the discount window (emergency fed lending) and the use of the new credit facility put in place last Sunday (Bank Term Funding Program or BTFP) to ease the pressure off regional banks by allowing them to pledge previously “held till maturity” bonds in a bridge loan facility (with par lending value). In addition to the spiraling down of First Republic (a r

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Marc Bentin

Mar 13
6 min

Fatal Distraction …

BentinPartner Weekly Last week main event was supposed to be Fed Chair Powell congressional testimony on Monday and Tuesday, followed by Friday’s job report and to some extent it was… until Thursday’s bombshell that drove the Banking index into a 7% selloff. The main message from the Fed, early last week, was that the peak policy rate could be higher than originally thought and that the Fed could accelerate the pace of monetary tightening (read deliver a 50bps rate hike later

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Marc Bentin

Mar 5
5 min

How Long Can Stocks Ignore Bonds …

BentinPartner Weekly Last week delivered a tale of two stories starting with the shock and awe of European inflation coming way stronger than expected causing bond yields and tightening expectations to rise as more Fed officials also expressed their preference for more tightening (and a higher terminal rate) which led global stocks to drop below key technical levels (below their 200dMa) causing an avalanche of selling. German CPI rose 9.3% yoy, up from 9.2% in January, led by

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Climbing Above The Start of The “Death Zone” …

Marc Bentin

Feb 19
8 min

Climbing Above The Start of The “Death Zone” …

BentinPartner Weekly Looking at what markets delivered last week, we are left wondering if bonds, stocks and commodities shared the same news flow. They certainly did not agree… Bonds traded lower in response to higher-than-expected US inflation (and rising fed hike expectations) while stocks kept squeezing higher, especially risky rate sensitive unprofitable ones- despite muted earnings, higher rate hike expectations and a still possible -if not likely- recession. Commoditie

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Marc Bentin

Jan 22
6 min

More Short Covering…

BentinPartner Weekly Stocks ended the week in short covering mode, led by the tech-heavy Nasdaq while the Dow Jones lagged. The sentiment was buoyed on Friday by Netflix results that helped CTAs pressing on the upside once the 200Ma resistance level on major US indices had been breached. While gains were solid on Friday, they materialized in the context of rising bond yields (bond yields dropped very slightly for the week as a whole) and offset the negative performance seen e

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Marc Bentin

Jan 15
6 min

Popping Up…

BentinPartner Weekly Markets delivered a second week of very strong performance for risk assets in break-out conditions, suggesting that a new bull market (of uncertain longevity) is in the making despite Federal Reserve officials delivering their best efforts to convince investors they will not be slashing interest rates before year-end despite money markets currently pricing a peak in rates at 4.9% followed by a 50bps rate cut by the end of this year. Federal Reserve Bank o

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Marc Bentin

Dec 22, 2022
6 min

Merry Christmas and Best Wishes…

BentinPartner Weekly 2022 has been a challenging year for global markets and most investors in a year that delivered the worst of the three exceptions of the past century, with both bonds and stocks dropping in tandem, each shedding 15-20% as illustrated in the picture below. This led the standard passive 60% stocks/ 40% bonds portfolio allocation that served investors so well for 20 years to fail investors last year. One of the lessons to be drawn perhaps was the necessity t

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Marc Bentin

Dec 18, 2022
6 min

Softer Inflation & Retail Sales…

BentinPartner Weekly With the exception of a November US inflation report that came on Tuesday slightly softer than expected (0.1% MoM vs. 0.3% expected; 7.1% YoY vs. 7.3% expected with core numbers also showing some improvements), global markets were confronted for the rest of the week with the twin negative forces of more coordinated central bank tightening coupled to a fairly hawkish discourse and more evidence of a weakening global economy. November US retail sales came i

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Marc Bentin

Nov 27, 2022
6 min

Is Chinese Assets Rebound For Real?

BentinPartner Weekly Last week of Thanksgiving was relatively uneventful in markets that were shaped by two events; the publication of the Fed minutes and the return of Covid related concerns in China. Fed minutes showed in writing that the Fed now acknowledged risks being skewed to the downside and towards recession for the US economy (“The staff, therefore, continued to judge that the risks to the baseline projection for real activity were skewed to the downside and viewed

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Marc Bentin

Nov 13, 2022
4 min

Is The Real Pivot on the USD?

BentinPartner Weekly The combination of the lowest US CPI print since January (7.7% yoy vs. 7.9% expected and 8.2% in September), the absence of a sweep victory from Republicans, a defensive investors’ posture, the return of share buybacks and a massive influx from CTA’s as key technical levels were broken all led to a massive rally in risk assets last week. Expectations of a reduced pace of Fed monetary tightening (not yet a pivot) and expectations of a fiscal policy more co

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Marc Bentin

Nov 7, 2022
6 min

Fed and BoE Tighten 75bps...

BentinPartner Weekly Stocks rebounded on Friday as the US employment report showed unemployment started to pick up despite a stronger than expected addition to the non-farm payrolls. However, stocks finished the week lower as the Fed, after an expected decision to raise rates by 75bp, dashed hopes of a near term pivot, causing the market to fall. Fed Chair Powell indicated during the FOMC press conference on Wednesday that the terminal rate “would end higher than previously

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Marc Bentin

Oct 31, 2022
6 min

Another Short Covering Episode...

BentinPartner Weekly Stocks climbed the proverbial wall of worries last week, as mostly disappointing earnings from the tech sector were offset by slightly better than expected US economic data (GDP grew by a larger than expected 2.6% year over year), whispering talks that of Fed could be soft pivoting soon, favourable seasonality and the end of the blackout period for share buybacks. Some 1trn in buybacks were announced so far this year (see this chart for the principal comp

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Marc Bentin

Oct 25, 2022
6 min

Let's Talk Pivot...

BentinPartner Weekly Stocks rallied last week on generally better-than-expected earnings reports, signs that inflation starts to moderate and news that the UK government scrapped all its mini budget, at the same time as the UK finance Minister resigned, leading GBP and the UK Gilt market to move away from panic state. Also supporting the market on Monday was M. Wilson, Morgan Stanley well known bear analyst, calling for a technical rally and a BoA study showing that cash hold

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20- and 30-year UK bond yields hit 20-year highs ...

Marc Bentin

Oct 16, 2022
7 min

20- and 30-year UK bond yields hit 20-year highs ...

BentinPartner Weekly Last week delivered another string of extremely volatile trading sessions with stocks dropping for the fifth consecutive week on the twin drama of the UK pension fund situation and the publication of yet again stronger than expected US PPI and CPI data. The IMF also warned last week that colliding pressures from inflation, war-driven energy and food crises and sharply higher interest rates were pushing the world to the brink of recession and threatening f

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Marc Bentin

Oct 9, 2022
6 min

OPEC vs. Strategic Reserve Fund...

BentinPartner Weekly While market expectations had built early last week about a possible early Central Bank pivot, these hopes were dashed last Thursday after 5 Fed officials spoke in unison against the idea. The job report on Friday was actually not that strong but sufficiently so to stoke concerns that the Fed could be harsher than it needs. Most of the strong equity market rally of the first start of the week were subsequently lost. The job market on Friday showed NFP ris

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Marc Bentin

Oct 2, 2022
6 min

A Tremendous Opportunity...

BentinPartner Weekly Last week concluded another miserable week, month and quarter for financial markets and another bull run for the dollar. Dollar: +6.1% Global bond: -3.3% Commodities: -4.8% Global stocks: -7.3% Spot gold: -8.1% (although Gold posted gains for most non-USD-based investors due to the rally in the dollar). The UK government’s tax cuts and unfunded spending program decided by the new Truss Government caused a near seizure of the UK Gilt market last week, send

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Marc Bentin

Sep 25, 2022
6 min

German PPI Prints Highest Ever...

BentinPartner Weekly Last week, markets were shaken again by coordinated tightening efforts that started on Wednesday with Sweden’s Riksbank delivering a surprise 100bps tightening move which was not welcomed by foreign exchange markets as the krona responded with a 1.1% decline to the news, closing the week with a 2.3% loss vs. an already sharply weaker euro. On Tuesday, the August German PPI delivered a shock, coming out at it strongest rate ever, both in yoy (45.8%) and mt

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Marc Bentin

Sep 18, 2022
5 min

FedEx Sinks...

BentinPartner Weekly Stocks were hit last week by the twin arrows of a hotter than expected August CPI report and from Fedex taking out its guidance last Friday (before the release of its earnings report later this week) and as the option expiration added to the volatility on Friday. The “core CPI” came out at 0.6% on Tuesday (7% yoy), about double the estimates raising the spectre of persistent and broadening of inflationary pressures. This led to a twin sharp equity downdra

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Marc Bentin

Sep 11, 2022
7 min

More Technically Driven Buying...

BentinPartner Weekly Dear Reader, Bulls took charge of the market last week, essentially looking past Central Banks’ signalling of tighter monetary policy coming forward. This was mostly technically driven buying based on Macd’s and moving averages triggering buy signals although the fundamental story remained weak with signs of economic weakness still abounding. Last week’s rally indeed took place despite serial Central Banks tightening (the ECB and BoC rose by 75bps, Chili

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J. Grantham Calls it A Super Bubble Ready To Pop (still)...

Marc Bentin

Sep 5, 2022
7 min

J. Grantham Calls it A Super Bubble Ready To Pop (still)...

BentinPartner Weekly Dear Reader, Last week delivered another string of “risk off” sessions as Euro area inflation accelerated to another all-time high of 9.1%. bolstering the case for the ECB to deliver a jumbo rate hike of 75bps when it meets this Thursday. “We need a strong rise in interest rates in September”, Bundesbank Chief J. Nagel said, adding that “further interest rate steps are to be expected in the following months”. These comments came as the message from the w

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