With the successful IPO today for Weibo we have added the micro-blog site to our index with a 4% weighting. We have reduced Sina from 6.3% to 4.2% as a function of this addition. We have reduced proportionately across the index to accommodate this entry.
Russian stocks in US afternoon trading have caught fire as the outcome from the Geneva discussions shows some tangible progress beyond merely a constructive tone that was all markets could have expected to gain from the event. Clearly going into the Kerry/Lavrov summit there was a low bar on a positive outcome. What we now have is a step back from the brink. The RSX ETF rallied intra-day 5.5% from 12:30 to 2:30 as details from the joint statement began to hit the tapes.
Gold continues to see pressure from the US economy as the spring thaw is yielding strong macro from the formerly frozen US economy.
As the US threatens to escalate sanctions, the question remains how effective sanctions can be, and what would be the scale of them.
The attached chart of the Russell 2000 shows a breakdown that many have been calling for but has yet to really unfold.
I’m seeing big buyers of SPX call upside around 1850 and 1860. Upside vol is cheap, and unless Yellen destroys the party, market can rally into long weekend. Expecting a re-test of highs on cash deployment and continued decent earnings off LOW BAR into earnings season.
US Cap Utilization is at multi-year highs as US data points improve with the spring weather.
Burberry continues to receive the benefit of a growing luxury class in the emerging markets.