Tighter tech belt
Oct 23, 2019
–Ten year futures have spent the last seven sessions between 129-16 and 130-16 and are in the middle this morning, just above 130. Nov options expire Friday with atm 129.75 straddle having settled 34/64’s yesterday vs 129-26. Cash tens ended 1.768%, down 2.4 bps. Solid 2-year auction, with 5’s on tap today. Euro$ strip from reds through golds +1.5 to 2.0. Brexit issues continue to be a factor, but GBP has only pulled back slightly from last week’s rally.
–Nasdaq futures posted a higher high, lower low and lower close due to an afternoon slide. In NQZ, 8000 is providing resistance, with yesterday’s high 7988.75. The larger picture is that companies have been hesitant to spend on capex. Interesting article on ZH yesterday says that Q2 yoy cash spending by SP500 companies fell 13%. This includes capex, R&D, cash M&A, buybacks and dividends. Chart and link below. Fed cuts probably have little influence on these decisions.
–New buyer yesterday of 30k 0EX 9862.5/9875c spd for 2.5 cov’d against futures 9849 to 9848. Settled 2.25 vs 9848. Reasonable protection trade for upside with 23 days to go.
https://www.zerohedge.com/markets/one-banks-stunning-chart-showing-second-tech-bubble-all-its-glory
