Commodities are being taken to the woodshed today — losses are abundant in mostly the entire space save select natural gas and LNG plays — like NEXT and SWN. WTI is hammered lower by 6.6% and the only explanation for this is “crowded trade” and/or the market is beginning to price in “demand destruction” based off the notion that the global economy is about to tailspin lower.
But if that were the case — we would not see the NASDAQ +31, mostly buoyed by the 8% move in TSLA.
Chinese stocks are doing well too, as evidenced by CWEB. Stocks like QS and FSLR are leading in the green plays and there is widespread strength in the shippers. There names like CMRE, SB and DLNG are leading.
What the market is trying to do is rotate out of commodities and back into retail/tech/industrials — but the headwinds are too strong with inflation, dastardly high mortgage rates, and headlines that make one wince.
My best guess is for this trend to continue through tomorrow — perhaps even Wednesday and then right back into the oils. There is no logical reason for tech to rally, oils to fade, and yet yields race towards inversion. We are simply unsure what the fuck is going on now — which offers opportunity as assets are being mispriced.
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