The SPX finished the day 0.8 percent lower with the financial sector leading the retreat, after JPMorgan CEO Jamie Dimon warned about an approaching economic hurricane:
“It’s a hurricane. Right now, it’s kind of sunny, things are doing fine, everyone thinks the Fed can handle this. That hurricane is right out there, down the road, coming our way. We just don’t know if it’s a minor one or Superstorm Sandy or Andrew or something like that. You better brace yourself.”
Dimon seems increasingly worried about the possibly history altering effects of QT (“we’ve never had QT like this, so you’re looking at something you could be writing history books on for 50 years”) and of course the war in the Ukraine:
“Wars go bad, they go south in unintended consequences.”
And speaking of things going south.. The US is apparently about to send advanced HIMAR systems to the Ukraine, which could potentially open up a whole new can of worms, as they are capable of striking targets 500 miles down range with proper munitions.
According to Blinken, Ukraine promised not to attack Russian territory, but is this a credible statement coming from a country fighting for survival? Things go bad in wars as Dimon just said..
In anticipation of the delivery Russia’s Lawrow send out a stark warning accompanied by ICBM drills, that such a move could widen the conflict and draw a third party into the war.
While geopolitics loom increasingly large in the background, inflation angst is back with a bang and is putting the market under renewed pressure.
Main reason today for the increasing rate hike expectations (see chart above) was a relatively solid ISM Index and a strong JOLTS report.
Especially the latter painted a picture of a job market that is still way too hot for the Fed and a massive payroll beat on Friday would give the Fed a green light to crush stocks according to Jim Bianco.
Other factors that fueled the surge in hike expectations were statements from the Bank of Canada ("The risk of elevated inflation becoming entrenched has risen.") and several Fed speakers (e.g. Bostic "a September pause should not be construed in any way as a Fed put.")
After the release of the Beige Book stocks started to rebound, as the report send out first signals of a cooling economy. Also, the Atlanta Fed's GDP tracker ticked down to 1.3 percent from 1.9 percent.
Gamma Discussion
Dealer gamma decreased by 167MM to -465MM with volume the highest at the 4000 strike.
Downside support can be identified at 4050 (-20MM) and 4000 (-61MM), to the upside 4200 is the main target.
Above 4240 dealer gamma turns positive and would open the door to calmer waters.
“It’s a hurricane. Right now, it’s kind of sunny, things are doing fine, everyone thinks the Fed can handle this. That hurricane is right out there, down the road, coming our way. We just don’t know if it’s a minor one or Superstorm Sandy or Andrew or something like that. You better brace yourself.”
Dimon seems increasingly worried about the possibly history altering effects of QT (“we’ve never had QT like this, so you’re looking at something you could be writing history books on for 50 years”) and of course the war in the Ukraine:
“Wars go bad, they go south in unintended consequences.”
And speaking of things going south.. The US is apparently about to send advanced HIMAR systems to the Ukraine, which could potentially open up a whole new can of worms, as they are capable of striking targets 500 miles down range with proper munitions.
According to Blinken, Ukraine promised not to attack Russian territory, but is this a credible statement coming from a country fighting for survival? Things go bad in wars as Dimon just said..
In anticipation of the delivery Russia’s Lawrow send out a stark warning accompanied by ICBM drills, that such a move could widen the conflict and draw a third party into the war.
While geopolitics loom increasingly large in the background, inflation angst is back with a bang and is putting the market under renewed pressure.
Main reason today for the increasing rate hike expectations (see chart above) was a relatively solid ISM Index and a strong JOLTS report.
Especially the latter painted a picture of a job market that is still way too hot for the Fed and a massive payroll beat on Friday would give the Fed a green light to crush stocks according to Jim Bianco.
Other factors that fueled the surge in hike expectations were statements from the Bank of Canada ("The risk of elevated inflation becoming entrenched has risen.") and several Fed speakers (e.g. Bostic "a September pause should not be construed in any way as a Fed put.")
After the release of the Beige Book stocks started to rebound, as the report send out first signals of a cooling economy. Also, the Atlanta Fed's GDP tracker ticked down to 1.3 percent from 1.9 percent.
Gamma Discussion
Dealer gamma decreased by 167MM to -465MM with volume the highest at the 4000 strike.
Downside support can be identified at 4050 (-20MM) and 4000 (-61MM), to the upside 4200 is the main target.
Above 4240 dealer gamma turns positive and would open the door to calmer waters.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.