Broken Pie Chart

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss how people are blaming the Wed 1.5% selloff on 0 DTE options while the CBOE says not so fast as dealers may have been buying stocks during the drawdown thus stabilizing markets. Later they talk shipping container rates spiking higher due to issues in the Suez Canal and Red Sea. Is this a fly in the ointment for inflation? Then they talk about how analysts making 2024 S&P 500 Index price and earnings estimates must get the forward 2025 earnings estimate right and what multiple the market will be trading at. What about oil in 2024? Analysts seem to be bearish, but Jay and Derek look at potential for refilling the SPR (strategic petroleum reserve). Finally, they talk VIX and VVIX and note how compressed the daily changes have been and what if anything that means going forward.

0 DTE Options (or ZERO Days to Expiration Options) are blamed for midweek selloff.

Why the CBOE says 0 DTE options are not to blame and instead dealers were buying stocks.

How market makers were a stabilizing force during the selloff rather than adding to selloff

Are they getting wrong the impact of 0 DTE options?

Why calls for Volmageddon 2.0 might be missing what caused Volmageddon 1.0

S&P 500 Index targets for 2024 vary quite a bit

Why is it so hard to nail next years S&P 500 Index targets because you really need 2025 EPS.

How analysts could have the same earnings targets but different multiple expectations

Shipping container rates spiked due to the issues in the Red Sea leading to the Suez Canal

Below the surface inflation pressure and remembering how container rates foretold inflation

SPR Strategic Petroleum Reserve levels and whether refilling them will be inflationary.

Gasoline prices have softened while analysts are pretty bearish on oil for 2024.

Contrarian view might be to look at oil to recover which would move CPI.

The Fed Dot Plots never wind up being correct.

Is Diehard a Christmas movie or not?

Mentioned in this Episode:

Zero-Day Options Shouldn't Be Blamed for Selloff, Cboe Says https://www.bloomberg.com/news/articles/2023-12-21/zero-day-options-catch-blame-for-selloff-cboe-says-not-so-fast?embedded-checkout=true

Everyone Betting on Rate Cuts | Blackrock Buying 44% of Homes? | Record Call Option Volume & VVIX and VIX Out of Synch? https://podcasts.apple.com/us/podcast/everyone-betting-on-rate-cuts-blackrock-buying-44-of/id1432836154?i=1000638850473

No, Wall Street investors haven't bought 44% of homes this year https://finance.yahoo.com/news/no-wall-street-investors-haven-015642526.html

S&P 500 Targets | VIX Index Largest 7-Week declines | Simplifying Synthetic Long Stock with Covered Calls | Labor Force Participation https://podcasts.apple.com/us/podcast/s-p-500-targets-vix-index-largest-7-week-declines-simplifying/id1432836154?i=1000638193441

Dave Ramsey Wrong? | Huge VIX Options Bets | S&P 500 Seasonality | When Does Government Debt Become a Problem? https://podcasts.apple.com/us/podcast/dave-ramsey-wrong-huge-vix-options-bets-s-p-500-seasonality/id1432836154?i=1000636559171

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss the new consensus of the Fed doing multiple rate cuts so what could go wrong? Record call option volume while the VVIX makes a move higher while the VIX continues lower. Viral article said 44% of home sales were to big institutions like Blackrock and Innovation homes but it was less than 0.4%. Later they look at whether the Powell Fed and the Voelker Fed are similar in declaring mission accomplished. Finally, they cover how bullish investors have gotten now that we are close to the all-time highs again and any flies in the ointment economically.

Consensus of multiple Fed rate cuts can be wrong, can it?

Why when everyone on the same side sometimes surprises

VIX vs the VVIX index

What the VVIX spiking while the VIX moves lower means

Comparing Chairman Powell's Fed today to Voelker's 1982 Fed and going forward for markets

The AAII Bull – Bear survey points to high bullishness with market approaching all-time highs.

44% of home sales being bought by Blackrock? Not so fast!

Atlanta Fed GDP is now ticking up again.

Record Call option volume

Fed rate probability tracker tool

Mentioned in this Episode:

No, Wall Street investors haven't bought 44% of homes this year https://finance.yahoo.com/news/no-wall-street-investors-haven-015642526.html

S&P 500 Targets | VIX Index Largest 7-Week declines | Simplifying Synthetic Long Stock with Covered Calls | Labor Force Participation https://podcasts.apple.com/us/podcast/s-p-500-targets-vix-index-largest-7-week-declines-simplifying/id1432836154?i=1000638193441

Dave Ramsey Wrong? | Huge VIX Options Bets | S&P 500 Seasonality | When Does Government Debt Become a Problem? https://podcasts.apple.com/us/podcast/dave-ramsey-wrong-huge-vix-options-bets-s-p-500-seasonality/id1432836154?i=1000636559171

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, join up once again to discuss the drop in the VIX Index off the highs. How S&P 500 2024 targets are showing up and why investors may not care. Labor force participation turned down so what does that mean if anything? Finally, Simplifying what synthetic long stock strategies are and synthetic long stock with covered calls. What are the features and benefits? How are they like just owning stock and or owning stock with a covered call? What investors give up by selling covered calls in exchange for additional income.

2024 S&P 500 Year End Price Targets from the investment banks

Why investors should probably ignore market predictions

Largest VIX Index 7-week declines and whether its significant or no

Unemployment remains low but labor force participation move lower

What does Labor Force participation measure?

What are synthetic option positions?

What are synthetic long stock with a covered call position?

What are the benefits of using synthetic options to build market exposure?

Mentioned in this Episode:

VIX Index Goes Nowhere | Cheap Puts to Hedge? |Cheaper to Rent Than Buy? | Markets During Presidential Election Years https://podcasts.apple.com/us/podcast/vix-index-goes-nowhere-cheap-puts-to-hedge-cheaper/id1432836154?i=1000637335338

Dave Ramsey Wrong? | Huge VIX Options Bets | S&P 500 Seasonality | When Does Government Debt Become a Problem? https://podcasts.apple.com/us/podcast/dave-ramsey-wrong-huge-vix-options-bets-s-p-500-seasonality/id1432836154?i=1000636559171

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore and Jay Pestrichelli join up to discuss an unchanged VIX and VVIX index. Was our trading platform screen broken? Whether the VIX and VVIX Index is a coiled spring as they are both in compression mode of late. Then, they explore new data that shows the cost to buy a home vs rent is really high meaning its very costly to buy vs rent right now. Did the Fed cause this? Jay and Derek also explore how cheap 1 year out puts are on the S&P 500 Index right now. Does no one want protection? Finally, they dip their toes into the all to soon 2024 presidential election looking at data around how markets do during election years. Does it even matter if it's a Republican or Democrat?

The VIX Index and the VVIX Index both closed unchanged on Wednesday this week

Both VIX and VVIX are showing signs of compression in their standard deviations of late

What smaller ranges over a period mean for the VIX and markets with regard to expected moves

Not since the pre-Great Financial crisis has buying a home been more expensive than renting

How now one ever compares the interest paid in a mortgage payment to rental payments

Did the Federal Reserve cause rent inflation by freezing the housing market creating demand?

The 1-year out at-the-money-puts are a cheap hedge right now, does anyone want hedged?

How everyone wants to be hedged when markets are crashing but not when its cheap

Why buying but hedging makes sense for the long haul.

How do markets do in the 4th year of a presidential cycle election year?

Market returns during presidential elections when democrats vs republicans get elected

Mentioned in this Episode:

Dave Ramsey Wrong? | Huge VIX Options Bets | S&P 500 Seasonality | When Does Government Debt Become a Problem? https://podcasts.apple.com/us/podcast/dave-ramsey-wrong-huge-vix-options-bets-s-p-500-seasonality/id1432836154?i=1000636559171

Total compounded annualized growth rate S&P 500 index by decade https://zegafinancial.com/blog/where-did-the-2010s-rank-for-total-return-on-sandp-500-index

Probability of Recession? | Explaining How US Treasury Bond Auctions Work | S&P 500 Index Member Changes | Option Premium Intrinsic vs. Extrinsic https://podcasts.apple.com/us/podcast/probability-of-recession-explaining-how-us-treasury/id1432836154?i=1000635380296

Stock Market Returns after First Rate Cut https://podcasts.apple.com/us/podcast/stock-market-returns-after-first-rate-cut-yield-curve/id1432836154?i=1000634550774

Option Selling ETFs Boom | Probability of Future Fed Moves | Bad News is Good News on Employment https://podcasts.apple.com/us/podcast/option-selling-etfs-boom-probability-of-future-fed/id1432836154?i=1000633983056

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore is back with Jay Pestrichelli this week where they analyze the recent viral video where Dave Ramsey suggests people can safely withdraw 8% forever in retirement. What doesn't make sense, what is left out, and why the assumptions may be faulty. Then, they discuss the market seasonality and whether this November pop higher already delivered a year end rally? Later Jay and Derek discuss the huge purchase of VIX calls this week and what it did to the VVIX Index as well as an interesting VIX option trade for December. Finally, they touch on Argentina's plan to dollarize the economy and when the US and other countries high debt to GDP can expect it to be a problem and what is so frustrating to traders making bearish bets against it.

Dave Ramsey viral video saying 8% withdrawal rate on accounts will work forever

How Dave Ramsey makes fun of people arguing for 3%-5% withdrawal rates

The claim of simply investing in mutual funds making 12% annually doesn't add up

How ignoring the sequence of return risk doesn't paint a true picture for retirees

Dave Ramsey seems to imply even retirees should be 100% invested in equities

How the sequence of returns only matters to returns when withdrawing or adding money

Simple average annual return vs CAGR compounded annual growth rate

Contrary to Dave Ramsey's advice not everyone should paying off their mortgage early

What historical seasonality of the S&P 500 Index says about year end performance

One of the largest November month returns on record for S&P 500 Index since 1928

What does Novembers month to date returns mean for seasonality?

Sovereign government debt at historic highs measured as debt to GDP

Argentina new president Javier Milei's plan to dollarize

Argentina's history of debt defaults

Discussing the huge VIX call trade that moved the VVIX Index this week

Why people are buying VIX calls

The VIX Index closed at the lowest level since January of 2020

Interesting VIX call breakeven levels for December calls

Mentioned in this Episode:

Total compounded annualized growth rate S&P 500 index by decade https://zegafinancial.com/blog/where-did-the-2010s-rank-for-total-return-on-sandp-500-index

Probability of Recession? | Explaining How US Treasury Bond Auctions Work | S&P 500 Index Member Changes | Option Premium Intrinsic vs. Extrinsic https://podcasts.apple.com/us/podcast/probability-of-recession-explaining-how-us-treasury/id1432836154?i=1000635380296

Stock Market Returns after First Rate Cut https://podcasts.apple.com/us/podcast/stock-market-returns-after-first-rate-cut-yield-curve/id1432836154?i=1000634550774

Option Selling ETFs Boom | Probability of Future Fed Moves | Bad News is Good News on Employment https://podcasts.apple.com/us/podcast/option-selling-etfs-boom-probability-of-future-fed/id1432836154?i=1000633983056

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore is back with Jay Pestrichelli, CEO of ZEGA Financial, to review the Goldman Sachs probability of recession and Fed rate forecast for 2024. Then they do a deeper dive on key aspects of US Treasury Bond auctions. Hint, it's a Dutch auction and how to read the results of treasury auctions including the bid to cover ratio. Later they talk through changes in the makeup of the S&P 500 Index companies and what the impact on earnings may be. Plus, how even when stocks go in and out of the index how the "divisor" calculation smooths the S&P 500 price out. Finally, Jay and Derek do a deep dive into the difference of options premium intrinsic value vs. extrinsic value using some examples. Oh, we have some recommendations as well.

What does Goldman Sachs have for probability of recession now?

What does Goldman Sachs estimate for Fed interest rates in 2024?

How do US Treasury bond auctions work?

What is a Dutch auction?

What is the bid to cover ratio mean in a US Treasury auction?

Looking at supply and demand metrics within Treasury Bond auctions.

S&P 500 Index committee that determines what companies come in and out of the index.

What is the S&P 500 Index divisor?

The largest company not in S&P 500 index is Uber?

Index changes underappreciated for earnings growth?

Airbnb, Blackstone, Lululemon all added to the S&P 500 Index in 2023

What is the difference between intrinsic premium and extrinsic premium in options?

How the option greeks like delta, gamma, theta impact extrinsic premium but not intrinsic

Comparing covered calls to ITM short puts on an index

Time decay implied in extrinsic premium

When covered calls are likely to get called away around dividends and extrinsic premium left

Why are ITM cash secured puts misunderstood

Mentioned in this Episode:

Stock Market Returns after First Rate Cut https://podcasts.apple.com/us/podcast/stock-market-returns-after-first-rate-cut-yield-curve/id1432836154?i=1000634550774

Option Selling ETFs Boom | Probability of Future Fed Moves | Bad News is Good News on Employment https://podcasts.apple.com/us/podcast/option-selling-etfs-boom-probability-of-future-fed/id1432836154?i=1000633983056

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore does a deep dive asking the question why is everyone rooting for the Fed to lower rates? If the Fed must lower interest rates, doesn't that mean there is trouble? Should investors instead be rooting for stable but higher rates where the long end un-inverts as a proxy for higher growth? What happens to market performance between the last Fed hike and first rate cut? What is the historical performance of markets post the first Fed rate cut? Then looking at past yield curve (10-year treasury minus 3-month treasury yield) before recessions. How the Fed normally inverts and then un-inverts the curve by hiking and then lowering interest rates. Finally, what is the NBER (National Bureau of Economic Research Board) looking at to determine recessions?

What is the inverted yield curve?

How have past yield curves inverted and un-inverted around recessions?

How does the stock market perform between the final rate hike and first rate cut?

How does the stock market perform after the first rate cut by the Fed?

Are rate cuts a sign of strength in the economy?

How the Fed typically causes inversions by hiking the Fed funds rate.

Historically the yield curve un-inverted because the Fed is cutting rates.

Will this time be different where long rates move higher to un-invert the curve?

What is the NBER National Bureau of Economic Research looking at for recessions?

How predictive of recessions is the yield curve?

Mentioned in this Episode:

Liz Young Sofi article showing S&P 500 Index market returns from last rate cut to first hike and post first Fed cut https://www.sofi.com/article/investment-strategy/liz-looks-at-recent-rally/

FRED Spread of 10-year treasury bond to 3 month treasury bill difference updated https://fred.stlouisfed.org/series/T10Y3M

NBER business cycle dates (past recession dates) https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions

Option Selling ETFs Boom | Probability of Future Fed Moves | Bad News is Good News on Employment https://podcasts.apple.com/us/podcast/option-selling-etfs-boom-probability-of-future-fed/id1432836154?i=1000633983056

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore and ZEGA Financial CEO Jay Pestrichelli ponder whether the Fed is truly done and if the street is too optimistic on rate cuts in 2024. Plus, they discuss new data showing option selling ETFs are having record assets between inflows and new entrants. Bad news is good news still as employment ticks up. They delve deeper into the numbers including labor participation rate, size of workforce, and more in the household survey data. Finally, they talk about options volatility and how it got sucked out of the market this week.

Option selling ETFs set new record high for assets

Is the Fed really done raising rates?

Is the street too optimistic about Fed rate cutting in 2024?

Sahm Recession Rule indicator says recent employment data hints at recession

3-Month moving average of the unemployment rate in the Sahm recession rule indicator

VIX hits lowest level in a while

Earnings and Nvidia options

Bad news is good news regime is still alive and well in markets

US unemployment rate ticks up to 3.9%

Understanding the household survey numbers

What is the labor force participation rate?

Size of the US workforce

Mentioned in this Episode:

BLS US Unemployment Rate report https://www.bls.gov/news.release/empsit.nr0.htm

Correction Territory | No Fear Yet in Markets? | When Does Capitulation Happen in Markets?

https://podcasts.apple.com/us/podcast/correction-territory-no-fear-yet-in-markets-when-does/id1432836154?i=1000632979045

Fed Rate probability tracker https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore and ZEGA Financial CEO Jay Pestrichelli to discuss how despite the correction territory (markets down 10% from top), the VIX index hasn't shown any real fear. So, what will it take to see capitulation in the markets? Thus far high yield spreads haven't reflected too much worry. Then Derek is tired of pundits talking about equal weighted market vs the "Magnificent 7" comparison as this is why you buy the index! Later, they discuss the new Fed survey showing how much net worth one needs to get into the top 10% plus median net worth by age range. All this and more plus some recommendations.

Is there enough fear in the stock market?

Why hasn't the VIX spike more during a 10% stock market correction?

VVIX vs VIX

What would capitulation in the stock market look like right now?

What is a stock market correction vs a bear market?

Checking in the on High Yield bond spread

Is rebalancing traditional portfolios from stocks to bonds causes equity weakness?

The "Magnificent 7" Tesla Apple Google Meta Microsoft Nvidia Amazon

Equal weighted stock indexes vs the S&P 500 Index

Fed survey on household finances shows how much net worth to get into different percentiles.

What is the median net worth by age group?

How US median net worth has increased.

Fed Survey of Consumer Finances (SCF)

Mentioned in this Episode:

Fed Survey of Consumer Finances (SCF) showing median net worth and income by age https://www.federalreserve.gov/econres/scfindex.htm

Powell vs. Bond Traders | Option Volatility During Earnings | Mortgage Rate Spread to Treasuries https://podcasts.apple.com/us/podcast/powell-vs-bond-traders-option-volatility-during-earnings/id1432836154?i=1000632184399

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia

https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400

The Big Short Movie and Credit Default Swaps Explained

https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore is back with ZEGA Financial CEO Jay Pestrichelli to discuss whether Jay Powell or bond traders are in charge of interest rate policy? How option volatility changes around earnings announcements. Why the spread between the 30-year Mortgage Rate and 10-year treasuries is historically wide including MBS (Mortgage-Backed Securities) impact. Plus, how MBS are doing something kind of weird right now. Later they discuss financial conditions, how high yield loans and bonds have greatly outperformed "safer" fixed income areas, and the breadth of the market vs the "magnificent 7" companies.

Is the bond market doing the Fed and Jay Powells work for them?

How higher interest rates tighten financial conditions.

The Fed not buying bonds creating lack of buyers?

Typical spread between the 30-year mortgage rate and the rate on US 10-year treasuries

How the spread is historically high (like 2 standard deviations)

When the 30-year mortgage spread over treasuries widened in the past

Does this mean mortgage rates need to come down or treasury rates have more to rise?

What are MBS Mortgage-Backed Securities

How MBS bond convexity is positive (hint, it's almost always negative)

Interest rates moving higher means less refinancing (and home sales) extending loan durations.

What is bond convexity and how does it relate to interest rate sensitivity risk

High yield bonds and loans surprising outperformance over investment grade and treasuries

Divergence is higher now than before Silicon Valley Bank

Chicago Fed National Financial Conditions Index

S&P 500 Equal Weight Index vs the magnificent 7

How the S&P 500 Index forecasted next 12-month earnings are higher now

The forward PE ration of the S&P 500 Index back down to about 17.5 PE

Are we behind the trough in earnings?

Mentioned in this Episode:

Deep Dive: Can Bonds Recover? | TLT ETF Breakdown |Inflation and the Fed https://podcasts.apple.com/us/podcast/deep-dive-can-bonds-recover-tlt-etf-breakdown-inflation/id1432836154?i=1000631358491

Bond Market Collapse https://podcasts.apple.com/us/podcast/bond-market-collapse-oil-price-problems-bond-stock/id1432836154?i=1000630742799

Cheap vs Expensive Options | Warren Buffett on Options | Fed Powell Presser

https://podcasts.apple.com/us/podcast/cheap-vs-expensive-options-warren-buffett-on-options/id1432836154?i=1000629058900

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia

https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400

GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained

https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446

The Big Short Movie and Credit Default Swaps Explained

https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6

Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com