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Insouciant Stocks Back In The Gamma Pocket As Earnings Roll In, Betting Markets ‘Bern’

Define nebulous: "It's a good time to be in the market".

Earnings are rolling in, and that’s going fine, all things considered (and accepting that Q4 results likely mark the onset of what most analysts insist will be but a fleeting earnings recession).

Apple of course posted blowout results (a shortfall in services notwithstanding), GE beat and some obscure burger chain called “McDonald’s” posted a big jump in comps, although the shares are lower premarket. I don’t know. Unless it’s a Wagyu, I don’t care for burgers or anybody who makes them. Boeing, meanwhile, posted a loss and cut plans for plane production. It’s hard to know what to make of that situation at this point – you’re tempted to take an “it’s always darkest before the dawn” approach, but then if you look a long-term chart, it hardly screams “buying opportunity”. Goldman rose after unveiling medium-term financial targets.

Anyway, here’s the big picture:

“Up and to the right”, with brief interruptions to account for the assassination of one of the world’s 20-most important people at an international airport and a possible pandemic/zombie apocalypse.

“It’s a good time to be in the market”, one Bloomberg TV guest mused on Wednesday morning, in the lull ahead of the Fed. (Define: Nebulous)

“A fine line between insouciance and complacency?”, SocGen’s Kit Juckes asked. “The virus outbreak marches on but markets are trying hard not to over-react”.

The good news is, we’re “back in the pocket”, so to speak, where dealer hedging should damp volatility and keep things pinned/anchored. “The S&P is ‘back in the pocket’ with Dealers again comfortably in the ‘Long Gamma’ zone which ‘insulates’ against large market moves in either direction”, Nomura’s Charlie McElligott wrote Wednesday, in a brief update.


“The Bern” continues to be a source of consternation, though. Are you “feelin’ the Bern”? Because the betting market damn sure is (the blue line is Bernie, the purple is Biden, the orange is Warren – obviously, this is odds on the nomination).

“[It’s] worth noting that yesterday we saw further VIX upside trading in the market for Feb and Mar expiries to seemingly capture the Democratic primaries [and] the Sanders “negative shock” risk”, McElligott said.

Not to put too fine a point on it, but if everyone hadn’t spent so much time maligning Elizabeth Warren in the third and fourth quarters, and if Americans hadn’t fallen hook, line and sinker for an obvious foreign influence campaign on social media to derail Kamala Harris, maybe we wouldn’t be in this situation.

And that’s not necessarily to say that “this situation” (as it relates to Bernie’s ascendancy in the polls) is inherently “bad” for society. But it most assuredly is for equities.

Read more: Buy The Viral-Apocalypse-Dip (Bern Victims)


3 comments on “Insouciant Stocks Back In The Gamma Pocket As Earnings Roll In, Betting Markets ‘Bern’

  1. “if Americans hadn’t fallen hook, line and sinker for an obvious foreign influence campaign on social media to derail Kamala Harris” ->

    What a joke, Kamala Harris failed because she had no obvious message, flip-flopped on key base issues, had a terrible record of prosecution in California, threw big fundraisers in the Hamptons whilst pretending to represent the average American, laughed at the idea of marijuana legalisation and blamed her own drop in the polls on her supporters being racist and sexist.

    Your obvious distain for Trump and non-centrist, non-woke politicians is palpable.

    • I’m glad you can perceive it, Peter. I thought I was making it clear, but wasn’t sure. Thanks for the confirmation.

      Also, what I said there about the Russian-influence campaign is true. Tulsi has always been boosted by Russian bots on social media. That is well documented by forensic research on those social media campaigns, and it popped up again during the debates featuring Tulsi and Kamala. It is fact.

  2. As a Russian bot, I feel triggered

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