(Source: TradingView - Past performance is not indicative of future performance.)
These once liquidity beneficiaries are the canary in the coal mine and what the Fed giveth, they are now gearing to take away – Crypto has the added tailwind from the adoption story, but investors have little interest in ultra-high valuation equities now, and valuation matters when central banks are removing the gravy train and reducing the incentive to roll out the risk curve - the flava for 2022 is not ultra-high beta plays, but predictable cash flow, quality balance sheets and profitability.
Tech has also found sellers easy to come by - Apple had been dictating the tape in the various US indices, and as soon as it fell from $182, US equity indices tailed off. As many who have been pointing to the poor breadth in the index will attest to, if Apple and Microsoft start to trend lower then the VIX should hold above 20% and the S&P500 and NAS100 to pull 5%+ lower.
We’ve seen a solid bid in US treasuries, which may be screaming out a message in itself – the US 2s 10s yield curve has flattened 4.5bp and the USD is eyeing a break of a pennant consolidation – a move through 94.42 and USD bulls may add ahead of the FOMC meeting.
DXY daily