Quiet start to Fed week
April 27, 2021
–Quiet Monday with the ten year yield unchanged at 1.567%. Implied vol continues to ease with TYM 4.5%. Corn, beans and copper all at new highs this morning with July Corn over 670 and beans over 1550, as the Fed prepares to fine-tune its message that inflation pressures are transitory. FOMC announcement and press conference are tomorrow. The BOJ in its meeting today cited mobile phone rates as a pressure on prices. From the statement: “With regard to the risk balance, risks to economic activity are skewed to the downside for the time being, mainly due to the impact of COVID-19, but are generally balanced for the middle of the projection period onward. Risks to prices are skewed to the downside.”
–Stocks remain well bid with SPX pinning all-time-highs. Earnings this week include MSFT and Alphabet today, Apple tomorrow and Amazon on Thursday. The CBOE equity put-call ratio remains at the lower end of the range at 0.43. I have included a chart of SPX as a percentage above or below the 200 day moving average. Currently its over 15% higher than the 200 day. The only time in recent history that it was more elevated was in 2009 rallying after the deep plunge related to the GFC.
