Morning 9-22

From Morgan Stanley.

 (BN) Morgan Stanley Warns Nasdaq 100 May Fall More Than 20% From
 Peak                                                          
More importantly, hedge funds have stayed “decidedly” long tech
and growth stocks, Wilson said, citing the firm’s prime        
brokerage data. While the conviction partly reflects the       
outsize returns from internet and software companies, it also  
highlights the danger should sentiment start to sour, he said. 
Despite this month’s retreat, the Nasdaq 100 is up 24% for the 
year, compared with a gain of less than 1% for the S&P 500.    
Many of those funds “are letting it ride,” Wilson wrote. “That 
may come into play and provide some fuel for this correction to
go a little further than most are expecting.”

 Impressive Nasdaq rally into the close yesterday, just when you think the fat lady is going to sing, bulls stage a comeback!  For a definition of cyclical stocks I will use the materials ETF XLB  it has been on impressive bull run over last 3 months as hopes and or  realization for an economic rebound were being priced, yesterday that changed.XLB dropped 3.8% biggest loss since early June, one day correction  or worries that a new stimulus round is unlikely? hmmm

  From Mizuho Watch this space. This is the first sign of real risk aversion in riskier US credit since June. Investors pulled more than $1 billion yesterday from the biggest junk-bond ETF, BlackRock’s $27.8 billion fund that trades as HYG. It is the biggest daily withdrawal since February, and one of the bigger ones in the fund’s history. Junk-debt spreads (LF98OAS Index) stayed consistent through recent jitters in big tech, but the threat of no extra fiscal support, paired with growing political uncertainty, pushed spreads wider yesterday, to a two-month high

 Powell testifies along with Mnuchin  in 9;30  in front of Congress it appears some of his comments are already leaked  Powell to say  “more stimulus needed to prevent long term economic damage”  and path ahead continues to be highly uncertain”- BBG shouldn’t be a market mover we have heard it all before nothing new.

New restrictions in UK Likely to last 6 months and told people to work form Home if possible. Restaurants, bars and pubs to offer table service only, partial reopening of sports stadiums suspended these restrictions will last 6 months.

 Tesla is a having a battery day.  A copy of apples iPhone day?  Musk did come out and say do not expect any of this new technology to be available till 2022 stock a bit disappointed down 2% pre cash open

Lumber back at limit down offer This morning….  macro views “HOUSING MARKET SLOWING? — Pantheon’s Ian Shepherdson: Pantheon Macroeconomics. “We remain bullish on the near-term outlook for the housing market, but momentum in the mortgage applications numbers has faded a bit in recent weeks. If this continues, it will signal a flattening in home sales towards the end of the year.” -Politico

 Was yesterday a correction or a start of a new trend? for the most part Markets sideways last month awaiting election results, new stimulus measure but now the Animosity in congress is growing. A New threat of Govt shutdown further strains relation on capitol hill, it will be a tumultuous few week. Watch natgas as the past few days have a been one of the strongest liquidations moves, I have seen, take no prisoners as longs liquidate or roll into back months.

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