“The Spice must flow.”

— The Spacing Guild, Dune Universe

In Frank Herbert’s 1965 sci-fi classic Dune, the entire galactic empire runs on a single substance: a spice called melange, found on exactly one desert planet, Arrakis. The spice lets the Guild Navigators fold space and travel between stars. No spice, no travel. No travel, no trade. No trade, no empire. Hence the book’s most quoted line, repeated like a mantra by everyone from emperors to smugglers: “The spice must flow.”

Now squint a little. Replace Arrakis with the Persian Gulf, melange with crude and LNG, and the Spacing Guild’s monopoly with a 21-mile-wide strait flanked by a bruised and bothered Iran — and welcome to 2026. Roughly a fifth of the world’s oil and a quarter of seaborne LNG squeeze through the Strait of Hormuz every single day. Close it, choke it, or merely threaten it, and the cascade is brutal: energy → nitrogen fertilizer (no natural gas, no Haber-Bosch) → food. As we’ve been banging the drum in these pages: you can’t print molecules. And you certainly can’t reroute them around a closed chokepoint with a press release.

News on Friday that the SoH is fully open again,

made markets continue their mad hatter rally of the past two weeks. But between having some doubt about the quality of the rally and new headlines flowing over the weekend, such as this

or this

can the rally continue from here.

Let’s have a look …

The S&P 500 bottomed on March 30, and really never looked back!

Whatever happened to “stocks take the stairsteps up, and the elevator down”. Quite the reverse is true on the above chart!

As a matter of fact, according to the following table from Bloomberg, this was the second fastest recovery (from RSI <30 oversold to RSI >70 overbought) since 1950:

Similarly, CNN’s Greed and Fear indicator moved from Extreme Fear/Fear to Greed in a record short time:

Albeit the AAII Bull/Bear survey was still in net negative territory last week, but given the strong rally on Thursday and Friday (the indicator is published on Thursday pre-market opening) it has probably also moved into net positive territory in the meantime:

Clearly, a short squeeze has taken place, with CTA’s (trend followers) buying $86bn of global equities according to Goldman Sachs (GS), top 5 all-time!

GS models another ~$70bn of buying over the next 5 sessions (assuming a flat tape).

We increased equity exposure to our managed portfolios a few weeks ago, as economic-sensitive indices such as the Dow Jones Transportation index,

or the Philadelphia Semiconductor index,

hit new ATHs already on April 8th.

So, what’s not to like about this rally then? For starter, breadth has been ok-ish, but in contrast to the underlying index (S&P500 below) failed to reach a new all-time high, creating a possible negative divergence to the index:

Here’s another measurement showing that breadth has not been great in this recent rally:

And then there are these signs, which may be less important from a tactical point of view, but increasingly bolster our suspicion that an end to the 17-year bull market (in the US) may be coming to a halt.

Exhibit 1 - IPOs

I firmly believe that the market top will be in on T+1 after the SpaceX IPO, which should be somewhere between June and July. But in the meantime, evidence mounts:

Exhibit 2 - AI craze

Last week, a woolen-shoe making company, Allbirds, announced that they will sell all of their core-business, supposedly including sheep et al. (week Dad-joke, I know), to re-focus on AI GPU-leasing, rebranded as NewBird AI. This is what the share price did:

Of course, the company is desperate to do anything, having seen its share price drop 99% since its IPO in 2021:

But for now, this ‘move’ reminds me a lot of Kodak’s, a once Nifty-Fifty company, intent to relaunch their glory days by refocusing their business on crypto-bla-bla-bla back in 2020:

In any case, signs of speculative fervour are plentiful and whilst we continue to slightly overweight allocation to equities, we continue to have an eye on that exit door and continue to position less ‘beta’.

In markets outside the US, the recovery in European markets has also been impressive, albeit the SXXP has not yet reached a new ATH*:

* Regional differences apply.

For example, whilst Germany’s Dax still needs to rally 3% to reach a new ATH,

Spain’s IBEX is only about a quarter of a percentage point away from reaching that feat:

And Italy’s FTSE MIB index is even already three percent above the previous ATH:

Moving over to fixed income markets, I find it intriguing, given the rally in equities how bond yields have resisted to move meaningfully lower:

The following chart illustrates that disconnect between US10YT yields (red, inverted) to the S&P 500 (grey):

Back in the old days, it was (bond) yields, that were right, with stocks eventually giving in …

European yields, proxied via the 10-year German Bund, are refusing to come lower:

Which means the interest rate differential between European and US yields (grey line) is rising, increasing upside pressure on the EUR/USD cross (red line):

The US Dollar Index itself continues to trade in its wide trading range,

and it is noteworthy that during the last USD-rally the RSI was unable to rise above 60, which can be interpreted as a sign of underlying weakness:

In commodity markets, where oil is still dominated by headlines, such as for example this morning,

it is probably better to be minimally exposed OR focus on the longer-term trend (which is UP for the commodity complex).

One area to closely keep an eye on are agricultural commodities. With Fertilizer prices refusing to come lower,

‘aggs’ such as Wheat

or Corn

are probably trading too low.

As proxy trade, consider the Invesco DB Agriculture ETF:

• Equity markets are very short term somewhat overstretched, but should continue to do well into the early summer months.

• Longer-term, we fear the 16 year bull market may be coming to an end.

• However, a equity market top is not an event, rather a process.

• Continue to underweight bonds as yields are refusing to head lower.

• The US Dollar is likely to weaken further.

• Look for more upside in the agriculture commodity space

That’s all for this week - May the Trend be with You!

• Everything in this document is for educational purposes only (FEPO)

• Nothing in this document should be considered investment advice

• Investing real money can be costly; don’t do stupid shit

• Leave politics at the door—markets don’t care.

• Past performance is hopefully no indication of future performance

• The views expressed in this document may differ from the views published by NPB Neue Privat Bank AG

“For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled.”

— Richard Feynman

This week’s Quotedian has a somewhat special format, as I will be showing you some of the key charts just published in Q2 outlook and its accompanying chart book. If you’d like a copy of either or both, do not hesitate to send me a personalised email to ahuwiler@npb-bank.ch with your request.

No other TL;DR than the above this week, so let’s dive right into our deliberations!

This is part of our executive summary:

• Is this the easiest or the most difficult outlook the NPB Investment Committee had to put together? A bit of both. The Strait of Hormuz crisis has triggered a near-complete reset across markets, providing plenty to write about and plenty of fog to navigate. With information overload and uncertainty still elevated, markets have turned to trading the headlines.

• We therefore take a step back to analyse the bigger picture, which has shifted materially over the past 20 months - and dramatically so over the past six weeks. All without losing sight of shorter-term allocations.

• As we outlined in our previous outlook “Age of Empires”, the world has entered an era of multipolarity where resources are hoarded, not sold. And as US President Trump has just discovered, unlike in crises of the past three decades, you cannot print yourself out of trouble when the problem is physical, not financial - “You can’t print molecules”!

There is already a first investment implication from this, which we show in our “Chart of the Quarter”:

And if you wonder how I created the Cap Heavy / Cap Light indices to create the ratio in the chart above, you already know I believe in LdV’s SITUS:

Hence, the proxy for the capital light segment is or are simply information technology stocks. For the capital heavy index I equal-weighted following four sectors into an index:

• Energy

• Materials

• Industrials

• Utilities

Now, completely independently but not by coincidence, please check the top four ranked sectors on our aReS proprietary model:

Exactly!

Next our outlook went to ask the question whether with slowing growth,

and like rising inflation,

STAGFLATION is a true threat.

And we also discuss the upcoming mid-term election, now only some six months away, and for the Republicans to lose:

In the equity section, we discuss the difficult start to the year for equity markets,

and the increased volatility,

which is quite typical for the mid-term year in the US presidential cycle (see 2022 and 2026 above).

We observe that from a cyclical,

AND a secular point of view,

global stocks remain in an uptrend.

Plus, we also conclude that chances for the trend of Global stocks ex-US outperforming US stocks have increased, as we see a pattern of high lows and higher highs in the ratio between the two:

We also confirm our overweight of Emerging Market equities,

and highlight Brazilian stocks, which even after a massive 80%-plus rally since early 2025 are still not expensive in DM and EM comparison:

In the fixed income section, we wonder how that “Reservoir Dog”-like no one trusts no one between the main actors will end:

We show that US 10-year yields are for now continuing to follow the (technical analysis) script, which does not allow rates to break out either side of the triangle and next quarter earliest:

Also, we set a reminder that nobody should forget Japanese yields, as they continue to move higher and possible threaten the largest carry-trade this universe has known:

We deliberate whether the widening in spread (and recent reversal) really takes into consideration all private credit woes,

as some anecdotal evidence would suggest not:

In the currency section we express our view that it will be able to uphold following chart,

as the greenback has been disappointingly ‘not strong’ during the six weeks or so of the Iran conflict:

The following chart carries a bold statement regarding a possible EUR/USD target IF the dashed red-line breaks:

And in the final section, we put the current commodities rally into historic context comparing them with equities:

And to round off our “Ages of Empire” and “You Can’t Print Molecules” themes, we highlight the following two charts:

Finally, to square that circle, here’s another excerpt from our NPB Global Asset Allocation Q2/2026 document:

Again, should you wish to receive either or both of the documents, make the effort to write me a little email at ahuwiler@npb-bank.ch or even better, contact us to become a client ;-)

May the Trend be with You!

André

• Everything in this document is for educational purposes only (FEPO)

• Nothing in this document should be considered investment advice

• Investing real money can be costly; don’t do stupid shit

• Leave politics at the door—markets don’t care.

• Past performance is hopefully no indication of future performance

• The views expressed in this document may differ from the views published by NPB Neue Privat Bank AG

"I am in blood stepped in so far that, should I wade no more, returning were as tedious as go o'er."

— Shakespeare, Macbeth (Act III, Scene 4)

• Supply chain stress, not only in oil, is increasing with every day the Strait of Hormuz continues closed.

• Equity markets are finally waking up to this reality.

• Whilst a short-term, negative sentiment counter rally could develop, the risks remain to the downside.

• (US 10-year) Yields at close to 4.50% are stressing the market (and Trump and Bessent)

• Despite having risen above 100 again on the DXY, the Dollar rally continues to feel too weak.

• Oil remains a worry at above $110 and gold could see some further upside from here

So, let’s see how quickly I can shed readership from this week’s letter or from the Quotedian all together. After all, I have some things to write to upset just about anyone. 🤭

For example, look no further than today’s title: Operation Epic Folly?

If we take Trump’s approval rating (Real Clear Politics)

as a proxy, 41% of you are already insulted by the title of this week’s issue of world’s finest free macro markets newsletter. Putting the question market at the end saved me maybe from half of those forty percent hitting the delete button, so let’s say one fifth of the readership has left us already and we haven’t even got started yet…

Truth is that US President Donald J. Trump and his administration seemed to have painted themselves into a corner, out of which they are at increasing desperation trying to find that infamous “off-ramp”.

After Iran called his bluff on destroying the countries energy supply centres, he went for a TACO only a few hours later. That TACO was it seems however not enough as 10-year Treasury yields hit 4.50% on Thursday, so that TACO was converted into a NACHO, i.e. the initial “deadline” of five days was converted to endure until after Easter.

Glossary Time:

If TACO stands for “Trump Always Chickens Out”, what does NACHO stand for then?

There you go.

The world is getting nervous as voices are getting louder that another two to three weeks supply constraints will push us in a COVID-lockdown scenario, but not out of political dumbness (well, in a way, yes), but rather just due to these constraints.

And it is not just about fuel for our flights to our favourite holiday destinations this summer. The implications are WAY, WAY wider.

As we discussed at some length in last week’s edition title “PerFert Storm” (click here), fertilizers are natural gas energy-intense as they are exposed to the Haber-Bosch process (click here and click here), and supply constraints/higher prices are already having dire consequences. Take the India/Pakistan/Bangladesh fertilizer business for example:

Further signs of supply chain distress: A third of global Helium production, a key “ingredient” in semiconductor assembly, is was taking place in Qatar. Unfortunately, Helium spot prices are not publicly available, but let’s use the share price of Pulsar Helium (CN:PLSR) as a proxy:

BTW, did you notice that “Price leads narrative“? 😉(click here)

More distress signals? Plastic prices:

With all of this, it is probably no surprise that equity markets finally started puking on Friday. Here’s the S&P 500, which has ‘finally’ fallen out of its range box:

As I advised in Friday’s QuicQ (click here): “Nothing ever good happens below the 200-day moving average”. Actually, not my words, but rather Paul Tudor Jones’ …

Or, as they say, if you panic, panic early! Is it too late to panic? I simply do not know. But I truthfully think that between global conflicts, private credit, high equity concentration (US) and a equity BTFD culture there is potential for some more pain. Add the wealth effect to that, and …

Regarding high equity concentration, the chart below illustrates what happens to passive investors into market cap weight indices (red line), when its main components (Mag 7 - dark grey line), start falling:

Luckily, we positioned our discretionary-managed client portfolios into the light grey line back in February.

Private credit

continues to be a thorn in the side of financials, which are trading below their 200-day moving average (XLF) and quickly approaching their secular uptrend support line (red, dashed):

The Dow Jones Industrial index has fallen “officially” into correction territory, with a drop of >10%:

Surprisingly, small cap stock (Russell 2000) are still above their 200-day MA:

So, overall the move lower does not seem to have finished yet, though we may be in for a bounce early this week, as sentiment is negative enough for such a move, as witnessed via the CNN Fear and Greed Indicator:

Even though the retail cohort, measured via the AAII bull & bear survey, is not as negative yet as it was at the “Obliteration Day” bottom a year ago:

And then there is this dude, which is usually wrong when he has public appearances and is currently trying to bottom fish:

A living contrarian indicator.

Now, to get rid of the next 20% of our readership, let’s turn to Europe, where the EU leadership is fully exercising one of its key competences. Exactly, DOING NOTHING. Neither joining the US in its fight for _______ (fill in your own reasoning), nor condemning it.

With energy (gas) prices through the roof,

should not more gas from Russia be flowing into the Union? (Blasphemy, I know). Or should Germany not be relaunching its Nuclear energy program? (Blasphemy, again, I know).

Meanwhile, European stock markets are suffering, not least the German one:

The broader STOXX 600 Europe index (SXXP) is flirting with a break below its 200-day moving average:

Switzerland’s SMI has provided four years of nothingness:

UK’s FTSE-100 (aka Footsie) is still trading above its 200-day MA, but has dropped the 10k milestone again:

Turning to Asian equity markets, we need to keep in mind that most countries on that continent are pretty much energy-price sensitive. Take Japan for example, which sees the Nikkei 225 index still trading way above its 200-day MA, but mainly thanks to a strong rally at the beginning of the year. Peak to current trough, the index has given back more than 12%.

But one of the worst performing markets continues to be India, which has now been in a bear market for one-and-a-half years:

The valuation premia of the Indian stock market is now nearly gone:

The Chinese equity complex is seeing a bit of mixed fortunes, with Hong Kong’s Hang Seng Index (top clip) down 12% from its peak and trading below its 200-day moving average, whilst the CSI 300 (bottom clip), a measure for mainland stocks performances, is down only about half that and still above the 200-day MA:

Time to head over to bond markets now, where the US 10-year Treasury yield nearly reached 4.50% on Thursday,

probably leading to Trump converting that previous weekend TACO into a NACHO.

For bonds, it is turning out to be a difficult year, both from a duration point of view as increasingly also from the credit risk side. The table below shows some popular ETFs and their performance since the beginning of the year and especially since the beginning of March, which is of course exactly since the Iran conflict ensued:

European rate traders are still assuming that the oil shock is inflationary, rather than recession-inducing, as German yields (as proxy for the EU region) continue to climb:

And stunningly enough, the ECB seems to agree with them, as the tone has shifted noticeably more hawkish and futures prices now imply more than a hike by June and up to three hikes by the end of the year:

I say stunningly above, as though you could argue that the ECB is only following short-term (2y) rates and is already behind the curve,

the last two experiences of hiking rates due to higher oil prices alone had been very painful ones…

Finally, in Japan, the 10-year version of the JGB yield just hit a new cycle high this morning and the 20- and 30-year yields are close to be doing the same:

Let’s use this as a segue into our currency market observations, where the interest rate differential between the US 10-year Treasury and the 10-year JGB yield continues to fail to feed into a lower USD/JPY rate:

As a matter of fact, the recent quicker acceleration in US yields than Japanese yields, is actually putting renewed upside pressure on the USD/JPY cross … as they say, correlations come and go…

The USD/JPY rate itself at 160 is at previous BoJ/MoF (oral) interventions levels:

The Dollar Index is trading north of 100 again, but I still miss a clear breakout to the upside (or more pronounced strength overall, as it were):

The key support level on EUR/USD at 1.14 is holding for now:

As is the resistance zone at 0.80 on the Dollar/Swissy:

The EUR/CHF cross has seen some strength over the past few weeks:

This is likely due to the rapid increase of the interest rate differential (grey line) between European and Swiss 2-year rates:

And finally, in the commodity complex, volatility continues to be the key word, be it in oil,

or in precious metals.

Regarding oil, crude futures are usually contracts to quickly mean revert lower again after a spike;

That we are still holding at the levels above USD110, makes me suspicious that this might not quite be over yet.

Gold, as mentioned last week, is a potential buy here:

Real rates, which may be topping out here above 2%,

may be supportive to such a gold rally. In the chart below the grey line continues to reflect real rates same as above, but on an inverted scale, whilst the red line is the price of Gold:

Monday is seeing a “smoother” start to the week, however, the potential of the US bringing “boots on the ground” over the Easter weekend nearly guarantees a continuation of elevated volatility. I have of course no additional insight or any tactical warfare experience to share (other than having been a young and proud Lieutenant of the Swiss Army about a thousand years ago),

but I wonder what success rate the US army expects with about 15,000 troops, when they had about 700,000 coalition troop size during Operation Desert storm (90-91) and about 300,000 during the second ‘round’ (2003). Unless those 15k are all reincarnations of Chuck Norris of course …

As investor, continue to play defense for now. Not the time yet to increase equity exposure NOR duration aggressively. Once this correction has ended, there will be plenty of time and opportunities to pick up. In the meantime, cash is not trash.

May the Trend be with You!

André

• Everything in this document is for educational purposes only (FEPO)

• Nothing in this document should be considered investment advice

• Investing real money can be costly; don’t do stupid shit

• Leave politics at the door—markets don’t care.

• Past performance is hopefully no indication of future performance

• The views expressed in this document may differ from the views published by NPB Neue Privat Bank AG

“Hell is empty and all the devils are here.”

— William Shakespeare, The Tempest

• Fertilizer prices are rising and will bring food inflation with it.

• Equity markets are falling into correction territory

• Bond yields are flying and previous central bank rate cuts have now converted to expected hikes.

• The US Dollar has rallied - but not as much as one could expect.

• Gold is melting down as investors rush to sell what they can sell (and real rates are rising.

• Oil prices are adjusting for a lengthy war.

Mr Shakespeare wasn’t writing about fertilizers. But he might as well have been.

Sometimes markets hand you a thesis so clean it almost feels suspicious. This is one of those weeks. A confluence of forces — geopolitical, macro, and structural — is quietly assembling into what we’re calling the PerFert Storm: a perfect setup for fertilizer stocks and agricultural names more broadly.

Let’s walk through the logic.

It starts, as so many things do right now, with Iran. The US-Israel strikes of February 28th didn’t just rattle oil markets — they introduced a non-trivial probability of Strait of Hormuz disruption into every commodity pricing model on the planet. Oil spiked. And where oil goes, natural gas follows. And where natural gas goes, nitrogen fertilizers follow — because ammonia doesn’t synthesize itself. The Haber-Bosch process is brutally energy-intensive, which means every tick higher in nat gas is a direct input cost shock to fertilizer production.

Here’s where it gets interesting. Not all producers are equal. European names like Yara and Grupa Azoty are squeezed between high feedstock costs and price-regulated domestic markets. Meanwhile, US producers like CF Industries sit on cheap Henry Hub gas and are laughing all the way to the ammonia plant.

Layer on top of that the Russia factor. Moscow remains one of the world’s largest exporters of potash, nitrogen, and phosphate. Sanctions have never fully normalised supply flows. Any further escalation — and the current geopolitical temperature is not cooling — tightens the global supply picture further.

Then there’s the macro overlay. In a stagflationary environment — which is increasingly what the data is whispering — hard asset producers with pricing power outperform. Food is the ultimate inelastic demand. You can defer a car purchase. You cannot defer eating. Fertilizer demand doesn’t go away; it reprices. And when it reprices, the producers with the right feedstock, the right geography, and the right balance sheet collect the windfall.

The PerFert Storm isn’t a single catalyst. It’s the convergence of all of them at once. And historically, that’s exactly when the most asymmetric opportunities emerge.

With that out of the way, let’s take our usual tour-de-force across the macro landscape, to see what has been going on and quite frankly, how sour everything is turning for investors …

I would have loved to say that the S&P 500 has arrived at a critical point, but the truth is, with Friday’s sell-off, key support levels (plus the 200-day MA) have given way:

You could always argue that maybe we are seeing a major bear trap, magnified by the quadruple witching activity (Stock index futures, Stock index options, Single-stock options and Single-stock futures) on Friday,

but if in doubt … invert. Would you buy or sell this?

The Nasdaq is also trading below its 200-day moving average:

The Mag-7 stocks are not coming to the rescue, down over 15% now since the all-time highs back in October:

The small-cap focused Russell 2000 is still above its 200-day moving average,

which is somewhat surprising, because it is also the first main index in the US to enter correction territory (drawdown >10%):

European markets (SXXP - STOXX 600 Europe) are on the brink of a major breakdown, as much as in terms of the 200-day MA support, as entering ‘official’ correction territory simultaneously:

Will this level hold?

If Germany’s DAX is a leading indicator, all hope is lost:

In Asia, Japan’s Nikkei index is also about to violate an important key support zone, though all truth being told, it can (will?) drop another 10% and still trade above its 200-day MA:

The Indian stock market, already in a “bear” markets since nearly two years, is suffering under the prospect of higher energy prices:

In relative terms, this market has underperformed overall emerging markets by over 40% since summer 2024:

Moving over into the interest rate/fixed income space, developed treasury yields seem to have resumed their secular uptrend. Take the US 10-year for example:

That move higher on Friday was NOT orderly. Zooming out on the same instrument, we note that a first resistance (red dotted line) has been taken out and 4.60ish is now the level to watch:

Market-implied inflation expectations (breakevens) have been exploding higher:

However, the yield curve is flattening,

as the market is pricing out further FOMC rate cuts:

As a matter of fact, rate HIKES are now more likely according to futures markets:

European yields, below proxied via the German 10-year Bund, are also sky-rocketing in the face of increased energy costs:

Zooming out here again too, we have to take note that any reasonable resistance has been broken:

According to markets, the ECB will HIKE interest rates as early as April and at least three hikes are priced in into year-end:

Similarly, any hopes for further rate cuts by the Bank of England have been buried:

The 10-year UK Gilt is at its highest since 2008!

What a difference a war makes! The Swiss are suddenly ‘celebrating’ a positive yield curve starting at the 1-year maturity:

Turning to currency markets for a moment, the US Dollar is finally living up to its safe haven status during times of geopolitical crisis:

But given the ‘size’ of the Middle East conflict, the strength of the USD could be called benign and may be hinting to future weakness to come for the greenback:

The key level to watch on the EUR/USD cross is 1.1400:

The same level to watch on the USD/JPY pair is 160.00 - not least as this is where the BoJ/MoF intervened the last time:

Finally, we need to address the question why GOLD IS MELTING DOWN …

Here’s the dramatic chart:

And here’s the same dramatic chart again:

Exactly!

What we need to remember here is that in times of dire straits (no pun intended), investors will sell what they easily can sell - and this includes Gold and other non-interest bearing investments…

Take the GFC for example back in 2007-2009 …. gold suddenly sold off 25% as the extent of the crisis before than rising 160%-plus into the 2011 at around $1,900. Here’s a chart overlaying that price behavior now and then:

Hence, Gold will eventually stop falling and recover, but the risk of a multi-year consolidation period has risen.

However, the rally in Silver is over, something we timely called for after the price hit $120. A drop to USD45 minimum is likely:

Crude Oil (Brent) is defying gravity and negating previous experiences of short-lived price spikes:

Will we see USD150 (or more) again?

The backwardation has diminished as market participants expect a longer war now:

WTI continues to trade at a discount to Brent:

And finally, to come full circle, fertilizer prices are sharply higher as we discussed at the outset, but have potential to rising further into the 2021/22 highs:

As everyone and his mother said a few weeks ago, fade geopolitical events (aka BTFD) as nothing ever happens, and it is always a great buying opportunity. I warned you of that groupthink in our weekly Quotedian on March 2nd (click here).

And so here we are … markets may still turn on pin’s head and head higher the rest of the year, but any purchase intents should be executed only with clear stop-loss plans.

Most of the time, (equity) markets go up and any bad news is good news. During the painful bear markets (2000-2002, 2007-2009) any news is simply bad news.

The odds for more downside have increased.

May the Trend be with You!

• Everything in this document is for educational purposes only (FEPO)

• Nothing in this document should be considered investment advice

• Investing real money can be costly; don’t do stupid shit

• Leave politics at the door—markets don’t care.

• Past performance is hopefully no indication of future performance

• The views expressed in this document may differ from the views published by NPB Neue Privat Bank AG

“Risk — risk is our business. That’s what this starship is all about.”

— Captain Kirk

As an analyst friend posted on X:

He's right. Desert Storm and the 2003 invasion were land wars that happened to be near the Gulf. This one is the Gulf — the strait blocked, the waterway weaponised, Gulf states under direct fire, and every barrel that used to transit Hormuz now missing from the global supply chain. A bit more than two weeks in, it's time for a full damage-control report across all macro stations on the USS Enterprise HSS Quotedian.

• Stock prices have been surprisingly resilient given the danger of a global recession

• Many major indices continue to trade above their 200-day moving averages

• Energy-price sensitive markets such as India have been hit harder

• Bonds failed to function as safe haven, but are rather discounting higher inflation via higher yields

• Credit spreads are widening, but unlikely war-induced instead rather provoked by fallout from the private credit sector

• The US Dollar has strengthened against all other major currencies.

• Oil continues to trade in backwardation, hence expressing the view of a relatively short-lived conflict in the Middle East

Global stocks (MSCI World) have started correction following the onset of the Iran war,

but at less than five percent drawdown so far and prices still above the 200-day moving average (see black line above), the ‘correction’ has been a walk in the park so far:

Are investors then betting on the war being over soon? Not on betting markets:

The ‘mood’ amongst investors has turned sour, with the AAII bears hitting nearly 50%,

and the bull/bear ratio hitting its lowest level since November last year:

At less than four percent, the drawdown in the S&P 500 since the onset of the war has been very benign, and it could be argued the nearly six-month old 6,600-7,000 range is still intact:

Though we need to watch that supporting 6,600 200-day moving average line over the next few sessions. A break would definitely not be constructive.

Similarly, the Nasdaq, down even only two percent over the past two weeks, is also hovering just above its 200-day moving average:

The more energy-price sensitive European market (SXXP) is down well over six percent over the past two weeks, but ALSO still trades above its 200-day moving average:

Germany’s (a Eurozone country with the arguably worst energy strategies …ever!) stock market, is trading well below its 200-day moving average, but just above key support:

Switzerland’s SMI, usually a bit more of a safe haven thanks to its defensive pharmaceutical and consumer staples stocks, has been hard hit (-9%) since the outset of the war:

Turning to Asia, one of the worst performing markets has been the Indian stock market, with the Nifty 50 down over twelve percent since early February and down eight percent since the outbreak of war in the Middle East:

Not only is the Indian market very exposed to energy prices and the flow of oil through the Strait of Hormuz (SoH), but early sellers have been citing its sensitivity to the roll-out of AI agents (Claude et al.) too.

Our call at the beginning of this year to relatively underweight the Indian equity market within a portfolio’s emerging market exposure continues to look very timely:

Another, supposedly also very oil-price sensitive market, China, has barely budged:

Japan’s TOPIX has corrected, but to the extent what I would call a healthy breather in an ongoing secular uptrend. Here’s the long-term picture:

And here a close-up:

Some Middle Eastern markets have for obvious reasons suffered. Here’s Dubai’s DFM index:

Though Saudi Arabia’s Tadawul Index has been very resilient and is actually slightly higher than at the end of February:

Since the beginning of the month, not surprisingly Energy stocks have seen the best performance in terms of sector comparison, whilst Material stocks have been laggards:

The latter is probably more due to a technical correction in Gold-, Silver- and other mining stocks after a massive rally over the past twelve months, more than a war-induced sell-off:

Back in March of 2000, Richard Bernstein, then at Merrill Lynch, had a research report out titled “Attention Venture Capitalists: Leave Silicon Valley for West Texas”. That was a very timely call to rotate out of tech stocks into energy stocks:

Are we there again? With the market cap weight of tech stocks at 32% and that of Energy stocks at less than 4%, that definitely could be an interesting trade…

Ok, so the damage report out of the equity corner reads something like “Down, but not out”.

Let’s turn over to bond markets now, to see how strongly the hull has been impacted.

In theory, (US Treasury) bonds should rally as the ultimate safe haven investment when a war breaks out. In practice, they haven’t:

Looking at the same market (10Y UST) in terms of yield, we saw an initial yield drop (bond market rally), which reversed the same day though, indicating that bond investors are positioning themselves for a stagflationary environment:

In sync with rising bond yields have inflation expectations (via Breakevens below) also been rising,

and expectations of further FOMC rate cuts vanishing:

Though maybe one cut is not enough, especially if the war drags on and the price shock on the oil/gasoline side continues with black gold trading above USD100. Yes, it is inflationary for prices, but also recessionary for the economy.

The Fed is likely to find itself between a Rock and a Hard Place very soon…

And talking of the US Fed, the FOMC is not the only central bank committee convening this week to discuss rates:

The ECB may also be soon looking at an economy at the brink of a recession.

German 10-year yields nearly touched the 3% landmark last week:

Let’s see what the message from the ECB will be next Thursday …

And by the way, here’s some tin-foil hat conspiracy for the nutters out there … or well-thought-of exit-strategy timing by the Fed's Powell and the ECB's Lagarde

Another bond market seeing its rates going (nearly) through the roof, was the UK Gilt market. At 4.85% it hit a level not seen since September and January of last year:

Here, a rate cut that had been fully baked in for this week,

had to be fully “baked out” again:

Given all of the above, it is no wonder that bond volatility (below measured via the MOVE index as proxy for Global treasury markets), has seen one of its steepest accelerations since the early COVID days:

So much excitement in bonds markets and we even haven’t spoken credit risk yet, where the private credit fallout finally seems to be feeding into spreads:

Looking at (US) high yield sectors, we note the largest widening has taken place in technology spreads:

This of course fits well with the “AI is eating the software world”-narrative …

OK, damage control on the bond station is done - quite a few fires are still burning here.

Next up, currency markets!

Since the start of the Israel/US attacks on Iran, the Greenback has strengthened against all other major currencies:

Though the US Dollar Index continues to trade below 100.00 and on Friday was rejected at THE major resistance point:

Similarly, has the Euro bounced off major support just below 1.14:

The USD/JPY cross is back to a level (160) where the BoJ/MoF has intervened (at least verbally) on two occasions already:

Hence, no big disasters in the corridors of the currency wing of our HSS Quotedian …

Last up, health check for the commodity sector!

Crude oil volatility has exploded,

but we have seen worse!

I am pretty sure that Trump & Co’s game plan did NOT foresee the price of a barrel of crude remaining above USD100 for several days:

Oil price futures continue to be in strong backwardation (i.e. future prices are lower than near months prices). Is the market too relaxed about the war in the Middle East?

It is ‘funny’ to observe that in the past we said the oil price is usually the last mover in the commodity space, and for reasons we did not know back then, we now suddenly have that last mover joining the rally:

The precious metals space has seen a bit of a profit taking since the onset of the war or as they say: “Never let a good crisis go to waste” (and talk it as an excuse to book profits).

Here’s Gold:

It is also true for Gold that trees do not grow into the sky and hence the price of gold is waiting patiently for its 200-day moving average to catch up.

One commodity usually less discussed but currently of utmost importance are fertilizers. Those have been shooting up recently, as energy costs to produce them have shot higher too:

I have written about this last week (click here) and I remain bullish on fertilizer stocks, such as CF Industries (CF), Intrepid Potash (IPI), Nutrien (NTR) and Yara (YAR):

Markets have been shaken across the entire macro landscape, but stand to fight another day, with the damage so far contained. Stocks are trying to shrug off the worries from the war, but may be ignoring the second order effect of global recession, which is partly being expressed in bond yields. Keep a sharp eye on credit spreads for further fallout/contagion from the private credit space. Central bank messages this week will be interesting to observe.

That’s all for this week - May the Trend be with You!

• Everything in this document is for educational purposes only (FEPO)

• Nothing in this document should be considered investment advice

• Investing real money can be costly; don’t do stupid shit

• Leave politics at the door—markets don’t care.

• Past performance is hopefully no indication of future performance

• The views expressed in this document may differ from the views published by NPB Neue Privat Bank AG

"Learn from me, if not by my precepts, at least by my example, how dangerous is the acquirement of knowledge."

— Victor Frankenstein, in Mary Shelley’s Frankenstein (1818)

Of course, the news of the moment are the Israel/US joint attacks on Iran and that country’s retaliation efforts. However, the situation is is too fluid for firm positioning or even sense-making comments. Hence, this week’s Quotedian should hit your inbox before markets open and we will largely ignore those bellic events.

But,

we will cover this closely through the Daily Edition of the Quotedian (NFKAQ - the Newsletter Formerly Known As QuiCQ). Not signed up? What are you waiting for!

I want the Daily Edition too!

So, here’s this weeks TL;DR:

• Equities did not live up to their (bad) reputation in February, though regional differences applied

• Rotation is not only confined to geographics though; previous sector winners are now losers and vice versa

• Watch financials carefully for further sign of contagion out of the private credit sector

• Fixed income markets behaved well, but returns are now coming from rates rather than credit spread compression

• The US Dollar’s failure to gain as a safe haven currency is worrisome and should be observed closely

• Gold is heading towards new ATH

• Oil will be subject to the newsflow surrounding the Strait of Hormuz

Have we created our own monster? We have created large language models (LLMs) to power artificial intelligence (AI). And now we use AI to create better LLMs. Don’t believe me? Here’s an excerpt out of the technical documentation accompanying the release of GPT-5.3 Codex:

And those LLM monsters — will they then turn on us creators and eliminate our jobs? A report earlier this week by Citrini Research, a financial markets research hub I have been subscribing to for over two years now but which suddenly seems to be in everybody's mouth, paints a chilling thought experiment: what if the AI bulls are right about the technology — and that's precisely what makes it bearish? Written as a fictional macro memo from June 2028, it traces how white-collar job displacement could spiral from a sector story into a systemic crisis, complete with an S&P 500 down 38% from its highs. Shelley couldn't have scripted it better.

But enough gore for now, especially as this is the end-of-month of edition of the Quotedian and we will, as usual, concentrate on some market statistics and performances and throw in one or the other more long-term (monthly) chart.

Aaand off we go!

Starting with equities, February has lived up to its reputation to be one of the three more difficult month of the year,

but only in the US!!

In the graph above, grey bars are year-to-date performance while the red bars are the February performance. Hence, really only the US (S&P 500 and Nasdaq) had some meaningful downside. Everything else continued to tug happily along.

However, even the apparently mediocre US performance, is actual only … well … apparent. Digging below the surface, we note that on an equal weight-base the S&P 500 actually delivered a very respectable three percent advance in February:

Hence, compared to the 'normal’ cap-weight version of the S&P 500, which logged a negative monthly return,

the equal-weight version, below proxied via the RSP ETF, reached yet another new all-time high:

Hence, 2026 has been all about rotation, rotation, rotation:

Accordingly, not one gang member of the clan of the Mag 7 is showing positive YTD returns:

But with a difference, the worst wounded is the purest software play out of the seven, which of course brings us back to this week’s FrankenstAIn theme. Here’s the chart of the iShares Software ETF:

It would be a grave understatement to say that software stocks rebounded EXACTLY where they had to. But, a) the ETF is still down 35% peak to current trough and b) the current trough may be just that … current.

Turning to Europe, the STOXX 600 Europe Index (SXXP), had a very strong February:

All components, including non-Eurozone members such as Switzerland and the UK, showed strong advances:

In Asia, Korea’s KOSPI,

and Japan’s Nikkei 225 stand out:

Though, admittedly, both look a tad too vertical just now and may be in for a pause soon.

Continuing to tread water is the Indian stock market,

a situation that may become worse before better, given the current Iran conflict and India’s heavy dependence on oil out of exactly that country.

In terms of sector performance, the rotation of bits into atoms, continued:

But outside that major “bits to atoms” theme, which we also addressed in our 2026 outlook (click here), I would have a close eye on financials for signs of contagion out of the private credit disaster corner (click here). Here’s a US financials ETF (XLF) to follow:

A private credit proxy (BIDZ) is haemorrhaging:

The factor landscape has also changed quiet dramatically in comparison to the past few years, with February further reinforcing those newly established trends:

Before rushing over to observe fixed income markets, let’s look at some individual stocks. Namely, which stocks have performed so far (YTD) best in the US (S%P 500) and in Europe (STOXX 600).

Starting with the US,

we not two things:

1. Despite the rotation away from tech stocks, there are still surprisingly many of that sector in the top 25.

2. Some of the YTD gains are astonishing, despite being two months old only

In Europe, it stands out that not one top 25 stocks saw a reversal in February:

Now to the fixed income space, where returns have been great for Treasuries,

Investment Grade Credit (Corporate Bonds),

AND high yield:

across all regions.

But, revisiting those four tables above, it is clear that more return was extracted from falling yields (here’s the 10-yeaer US Treasury example),

then from further credit spread compression, which rather seem to be turning higher:

Of further note in the rates realm is the drop in UK Gilt yields, despite the ongoing political mess:

And Japan’s JGB yields seem to have found now an at least intermediate top:

Which brings us to currencies, where the US Dollar has been able to gain some ground, except to safe haven (CHF) and some of the commodity (AUD, CAD, NOK) currencies:

Versus emerging market currencies, the picture is similarly “messy”, with the usual suspects (TRY, INR, IDR) the usual’losers’ versus the Greenback, but also some surprisingly clear winners (e.g. BRL, CNY, PHP).

The Dollar Index (DXY) gained some ground during February, but remains depressed and below the 100 level (even this am after the Iran conflict hit over the weekend):

Maybe it is still too early (06:30 am), but that failure of the USD, below versus the EUR, to show significant “safe haven” gains in the first hours of trading is somewhat worrisome and should be observed closely:

In commodities, it is of course difficult to make any qualified comments given the turmoil in Iran and the news surrounding the Strait of Hormuz. First to note is that all performance tables below are from BEFORE the kinetic action hitting over the weekend.

In terms of commodity “sectors” performance, precious metals once again are taking the lead, not least thanks to a very strong February performance:

Looking at some popular commodity futures, we note that energy-related commodities (ex Natural Gas) have started climbing the leader-board ladder:

Following charts are now AFTER the Iran conflict, i.e. from this early Monday morning.

Gold is up about two percent, and whilst briefly trading higher in January is now at its highest would the month end today (which it of course does not):

Silver is up a ‘disappointing’ one percent only early this Monday:

Though, given that Silver is NOT a safe haven asset, this smaller reaction actually makes a lot of sense. Dynamics of tailwinds for silver are of other nature (supply constraints at COMEX).

But THE commodity of focus is of course crude oil, which in its international Brent version is up seven percent his morning,

but hit nearly USD73 in overnight trading:

The spread between this more international (Brent) price of crude and its more US-domestic focused WTI price should probably widen further, as it did during the early days of the Ukraine-Russia conflict:

In conclusion, the best advice I can give you (for investment management) in the early stages of any kinetic conflict is,

DON’T BE A HERO

After all, even legendary trader Paul Tudor Jones told you that:

However, be smart, and become a NPB client (click here) for good, savvy, patient investment advice.

May the Trend be with You.

André

• Everything in this document is for educational purposes only (FEPO)

• Nothing in this document should be considered investment advice

• Investing real money can be costly; don’t do stupid shit

• Leave politics at the door—markets don’t care.

• Past performance is hopefully no indication of future performance

• The views expressed in this document may differ from the views published by NPB Neue Privat Bank AG

“We don’t have red flags. In point of fact we don’t have yellow flags. We actually have largely green flags.”

— Marc Lipschultz, co-CEO of Blue Owl on an earnings call (Feburar 26)

• The second instalment of “Pirate Credit” is being rolled out in financial markets

• Equities are range stuck, but all over the place

• Invested in Tech? You may have done very well … or not!

• Bond yields are still range stuck, but “high noon” is moving closer

• Cryptocurrencies are on the verge of breaking down again

• The Oil price is slave to Polymarket bets, Gold is ready to move higher again and copper mining stock may be leading physical prices higher

This week’s title and theme should actually have been, well, title and theme of the Quotedian two weeks ago, but impending changes to the newsletter and a tight agenda (in combination also known as: “dog ate my homework”) kept me from publishing the following paragraphs earlier. Though given the size of the potential fall-out, we may be still in the early moments of this particular crisis.

But to get us starting, let me circle you back to today’s quote of the day first and then push you back through the tunnel of time of financial hysteria history:

“We don’t have red flags. In point of fact we don’t have yellow flags. We actually have largely green flags.”

— Marc Lipschultz, co-CEO of Blue Owl on an earnings call (Feburar 26)

Does that not sound awfully a lot like:

"When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing."

— Chuck Prince, CEO Citigroup (July 2007)

or

"We don't see any pressure on our liquidity, let alone a liquidity crisis."

Alan Schwartz, CEO of Bear Stearns (March 2008)

or even

"We will get through this."

— Dick Fuld, CEO Lehman Brothers (August 2008)

You get my point.

Five months ago, in early October 2025, I wrote a lengthy piece on what I thought (and still think) has the potential of becoming a crisis with a massive fall-out. Titled, “Pirate Credit”, (click here to read it again) it analysed the (nearly) first warning signs of a crisis befalling the private credit sector.

That October newsletter also carries a very, very, very basic primer (and some links) on private credit, but for a fantastic introduction, explanation and more, I would refer you to the article just published by my friend Cédric Kohler at Seneko, titled “Give me a Pound of Flesh”, which is less gory than you initial think:

Though we are probably still in stage one of the five investment grief stages, evidence is now accelerating. Keeping our “Pirate Credit” style:

Anyway, why am I bringing this all up again?

Well, this was one of the headlines last week:

So, come again: no red and no yellow flags, just green, right??

And here’s where the virtue of that one of very few quotes you actually really need to remember comes in:

“Price leads narrative”

Source: 37-years of hands-on market experience

Already back in October, Part I of the “Pirate Credit” Saga was premiered, shares of Blue Owl were already down 50%+ peak to low:

Since then shares are now down 60%, which does not sound like an awful lot more, but as investment maths would have it, any bottom-fisher or bargain-hunter buying a fifty percent pullback back in October would now be down over 30%:

And you know what, simple, rule-based technical analysis (shoulder-head-shoulder pattern), would indicate that the (low) price target may carry a six-handle:

But, of course, did the headlines surrounding Blue Owl (OWL) last week not remain confined to OWL, but spread across to other similarly listed private credit and private equity, both closely (and lethally) connected outlets. The following year-to-date performances are just a refined selection of some of the larger players in this space:

And here is the chart of the VanEck BDC Income ETF that I DID show back in October and the is highly correlated with the fortunes of the private credit sector:

And here’s the update of that chart:

In conclusion, and zooming out on this some chart,

you could rightfully ask whether it is time to try and catch that falling knife at current levels. IMHO and FWIW, this is something I would not touch 10-yards pole, given the immense opportunity set out there and the high risk associated to this market segment, which after all, carries TWO OF THE MOST IMPORTANT market risks in existance:

1. Too much dumb money running after a dumb idea (after all, private credit is covenant lite credit)
   
   and
   

2. A classical duration mismatch, where quarterly redemptions are promised on five to ten year duration loans. (Ask SVB for their recent experience on duration mismatch…)

Let me finish then with the question that is probably burning on your lips (or at least should be):

Where is the regulator on all of this?

My blunt answer:

What regulator?

The FT’s Alphaville slightly more eloquent reply on the same:

ONWARDS …

Equity markets had a largely ‘boring’ week last week, with US markets regaining nearly all of the previous week’s losses and European markets building further on gains.

On one hand side, newsflow (private credit, Iran, tariff back-and-forth, etc.) are exerting downside pressure on stocks, whilst earnings

continue to be supportive and market breadth also remains constructive:

It is maybe therefore that the almighty S&P 500 continues to be stuck in that 200-points range:

And also maybe it is why the dispersion on the index is so bi-polar (aka barbell) this year. Take this graph from the fine folks at Bespoke Investment Group, which shows that whilst the index is up just about one percent year-to-date, only one-in-five stocks is up or down less than 5%, with a big majority showing much wider outcomes:

But probably the widest and most stunning dispersion between up and down comes out of the SAME(!) sector. Here’s the performance difference between semiconductor (SMH) and software (IGV) stocks on a year-to-date basis:

That’s 41% performance difference just year-to-date!!!

Zooming out to go back one more year:

Make that 93%(!) of performance delta in less than 14 months … WOW!

To finish off the equity part, here’s a country pair trade you should implement if you believe the impact of AI on sectors such as software and services and the “age of empire” both continue. Long Australia, short India:

In bond/rates markets, just two observations:

First, the yield on the Tens continues to adhere to our consolidation triangle established many moons ago:

As mentioned on several occasions, we expect a resolution out of the triangle in Q2 of this year. Which direction? No forecasting here, just patiently waiting and then ready to follow the outcome, whatever it is.

The second observation goes to credit spreads, which (so far) largely fail to show any nervousness regarding the deteriorating situation in private credit markets:

We will skip the currency section this week, only highlighting that in cryptocurrency-wonderland all three larger cryptos (Bitcoin, Ethereum and Solana) seem ready to attack key support levels again:

Having hopelessly overrun on time with regards on writing this week’s Quotedian, let me add just three more charts, all related to commodities.

The first chart shows the correlation between Polymarket bets that the US will attack Iran before March 31st (red) and the price of Brent (grey):

Not really a surprise there - but still important market implications. Will it be: “buy the rumour, sell the fact” with the selling commencing once an attack really happens? We may not need to wait until the end of March to find out, as chances for an ‘intervention’ are not slim once Trump’s “State-of-the-Union” address (Tuesday) and India PM’s Modi visit to Israel (Friday) is over …

The second chart may kind of confirm that just forementioned thesis:

And finally, our third chart argues that Copper Mining stocks (COPX ETF - red line) may be leading the Copper Futures prices (grey line) higher:

Investment thoughts:

• Do NOT catch that falling private credit knife

• Wait for breakout in S&P 500 for clearer directions, though over the intermediate term path of least resistance continues to the upside

• Similarly, remain duration neutral with your fixed income exposure, but maybe seek to improve the credit quality if necessary

• Stay away from cryptos right now

• Buy copper stocks on a set-back, buy gold/gold stocks on a break out

That’s all for this week - with a bit of luck our brand new Quotedian - Daily Edition (letter formerly known as The QuiCQ) should be out tomorrow Wednesday. Sign up below if you have not done yet so:

Daily Quotedian? I want IN!

In the meantime: May the Trend be With You!

• Everything in this document is for educational purposes only (FEPO)

• Nothing in this document should be considered investment advice

• Investing real money can be costly; don’t do stupid shit

• Leave politics at the door—markets don’t care.

• Past performance is hopefully no indication of future performance

• The views expressed in this document may differ from the views published by NPB Neue Privat Bank AG

“It is not the strongest of the species that survives, nor the most intelligent, but the one most adaptable to change.”

— Charles Darwin, “On the Origin of Species”

Housekeeping

Before we dive into this week’s market review and deliberations you may have already noticed a few, slight changes taking place in, at and around your all-time favourite financial markets newsletter 😉.

First of all, we are dumping the asset class structure (equity, fixed income, FX, commodities), replacing it with just one huge, completely random ‘Deliberations’ block.

But fret not, the ‘TL;DR’ (Too Long; Did not Read) section at the beginning will tell you what the second, deliberations part is all about.

And for those of you who are just constantly screaming: “Show me the money!!”, we’ve got the ‘Squaring the Circle’ section at the end, which intends to give you some savvy investment advice. Which in turn and of course immediately triggers following disclaimer:

Finally, our (nearly) daily publication, The QuiCQ (click here), will eventually be re-branded into The Quotedian - Daily Edition, though for now the two lists will be run separately.

With that out of the way, here we go!

• Rotation out of tech into energy and consumer staples stocks continues

• Mag 7 are giving up market leadership as FCF tumbles

• Equity markets look ripe for a correction

• Continue to overweight non-US markets

• Bond rally about to stall?

• US Dollar continues to be structurally weak

One of the big themes of this year has been “From Bits to Atoms”, as the rotation out of software stocks (IGV - grey line) into oil stocks (XLE - red line) continues:

On a stand-alone basis, the software ETF (IGV) is in the vicinity of long-term support levels AND is wildly oversold:

So, may it be worthwhile trying to catch that falling knife?

Perhaps.

Though for the time being, it seems that contagion into the broader tech sector is real threat. Here’s the Nasdaq-100, which seems to have a similar set-up as February a year ago:

24,000 to 23,900 seems to be key support zone here.

The Mag 7, which are NOT your Mag 7 of a few years ago thanks to all that AI-induced spending spree,

are breaking down versus the broader market (below - ratio of Mag 7 / S&P 500 equal-weight index):

But, BTW, all that AI spending is actually pretty decent for end-users, such as me. Remember that relative strength model (aReS) I have been showing in this publication over the past years. It used to look like this,

and involved downloading data from Bloomberg into Excel, uploading the Excel sheet into Tableau Public and was rather on the ‘fidgety’ side.

Five minutes invested into prompting Claude (Anthropic) gave me a fully interactive version with all bells and whistles, including an automated data update on a daily basis:

WOW! Just WOW!

Anyway, back to markets, where we see in the above WOW-table that consumer staples stocks have been climbing sharply in ranking over the past weeks. That is of course another sign for caution as investors seem to be positioning themselves more defensively:

Especially versus consumer discretionary stocks is that rotation very pronounced:

Seasonality is also not very helpful over the next two to three weeks:

Is Bitcoin (red) then trying to tell us something?

Volatility remains elevated on the S&P 500 (VIX) and the Nasdaq 100 (VXN),

but probably not elevated enough (yet) to argue for an immediate bottom.

Worse, bond volatility (MOVE inverted - red line) has also been pickup up over the past few sessions:

But, under the leitmotif: “There is always a bull market somewhere”, Japanese stocks have continued to behave well since the snap election a week ago,

and Brazilian stocks are continuing in a quiet, very overlooked bull market too:

And talking of Japan a moment ago, a blow-off top for JGB yields could have been put in place in January:

A top that also coincides with a top (for now) in the USD/JPY rate:

Rumour has it of course that the BoJ/MoF was inquiring about USD/JPY rates around that January top …

Staying on the US Dollar for a moment, the following front-page of The Economist,

usually a contrarian indicator, has so far failed to put a bid under the Greenback:

But one currency that definitely has found a bull trend is the Chinese Yuan. Not only versus the US Dollar,

but especially also versus the Japanese Yen, which may be politicised over the coming months:

US consumer price inflation (CPI) surprised to the downside last Friday,

and Truflation (click here and here) says inflation is even lower:

This has been pushing treasury yields lower,

and bond prices correspondingly higher:

Longer-term, our consolidation triangle on the Tens remains intact, hence I do no expect a substantial drop below 4% (stop loss below 3.90%):

European yields have come lower too over the past two weeks, but not to the same extent as their US cousins, making the interest rate differential (red line - lhs) between the two economic zones widen again and probably putting a floor under the EUR/USD (grey - rhs) rate at the same time too:

In commodity markets, oil (Brent) has been in an uptrend since the beginning of the year, but is now struggling to stay above US70 the barrel:

Nevertheless, that 15% increase in oil prices since mid-December has been disproportional well for all type of oil stocks:

Gold (and Silver) continue to be in a consolidation phase, which could last at least a few more weeks, if not months:

• Monday is a US holiday (Presidents’ day). Markets closed.

• This week look for Empire Manufacturing (17.2.) and Durable Good orders (18.2.) in the US; plus FOMC minutes of last meeting are out on Wednesday too.

• Inflation numbers due from various Eurozone member states should be a non-event

• Several companies reporting earnings - am interested to see those of Palo Alto Network (PANW) as guidance for the internet security sector after AI-related software sector sell-off. Worth buying into the numbers?

• Continue to buy Brazil and Japan stocks on dips

• Bond rally close to an end?

That’s all for today - make sure to sign up to our daily updates, if you have not done so yet.

The Quotedian - Daily Edition

May the Trend be with you!

• Everything in this document is for educational purposes only (FEPO)

• Nothing in this document should be considered investment advice

• Investing real money can be costly; don’t do stupid shit

• Leave politics at the door—markets don’t care.

• Past performance is hopefully no indication of future performance

• The views expressed in this document may differ from the views published by NPB Neue Privat Bank AG

“The only constant in life is change.”

— Heraclitus

There was no Quotedian yesterday due to a very specific reason:

Exciting changes are coming to the Quotedian and the QuiCQ!

For once, there is no sneak peek preview, but if all goes well, you should find out latest next Sunday/Monday on what your new, shiny, inimitable and all-time favourite newsletter will look like 🫶🏻.

In the meantime, here a quick update on some of the recent market happenings. In no particular order:

Remember that ragging bear market of last week? Here’s the S&P 500 Monday through Thursday:

This “sell-off” was of course ignited by a (truly gruesome) sell-off amongst software stocks, accelerated by the release of a new set of Claude apps by Anthropic,

which eventually swapped over into semiconductor stocks too:

So, what happened to that 3% drop on the broader S&P 500?

Aaaand, it’s gone! Actually, this index closed less than a quarter percentage point from a new all-time CLOSING high…

Worse, or better actually, the Dow Jones Industrial is already ticking in new ATH after new ATH:

And even better, the new ATH on the Industrials are confirmed by new ATHs on the Transport stocks, giving a screaming Dow Theory buy signal:

Especially that latest move higher in the DJT (lower clip), seems to confirm our 2026 outlook (click here) of growth being higher than suspected.

And one more comment on US stocks: The equal-weight version of the S&P 500 (RSP) has been marking new ATH also for the past two sessions, leaving little doubt where the market is heading over the short- to intermediate term:

Only sentiment

and positioning

are of slight concern, but probably not enough to counter very strong breadth as measured by NYSE new highs minus new lows

and advancing minus declining stocks on the same index:

Hence, for now, keeping it max. KISS:

“The trend is your friend, until the end when it bends”

Japanese capital markets are of focus also this week, with stocks jumping higher after PM Takaichi’s landslide win in the snap elections:

But the really good news here is not necessarily the upside acceleration in equities, but the lack of further weakness in the Japanese Yen,

and the relative calm surrounding bond yields:

The fear of course is that Takaichi with little internal political resistance over the coming years may probe too much fiscal largess, but again, for now the market seems to be pretty cool about it.

Staying with yields for a moment, it seems now that the Jeffrey Epstein scandal is poised to bring down its first major political leader. Which is of course not surprising, but as fate would have it, amazingly it could be the head of British PM Keir Starmer that could roll. Amazing and/or surprising because he seemingly has no direct involvment. Yet, here are the bets on Polymarket that Starmer will be out by mid-year:

Odds are trading at 70%!!

No surprise than that the Gilt market has been upheaval over the past few sessions:

The GBP/USD cross has been on a 10 big-figure round trip over the past few sessions, up 4 then down for, then up 2:

Finally, let’s have a quick glance at the commodity complex with a special focus on the precious metals.

In Gold, for now price action is taking place within that consolidation triangle I highlighted a week ago and if this should hold up, no major move is expected until the first half of March:

No major move within a $500 range, that is …

Whilst fundamentally I prefer a move out of the triangle to the upside, just in later march seasonality gets a tad negative for the yellow metal:

Silver, a remain a bit less constructive, unless it moves above USD 90 again:

Looking into the week ahead, some focus will be on tomorrow’s NFP numbers out of the US:

Alright, that’s all for this week. Look out for the changes to come to a Quotedian near you soon, and, as always …

MAY THE TREND BE WITH YOU!

In reality, you need no other Disclaimer than the one above, but just in case:

• Everything in this document is for educational purposes only (FEPO)

• Nothing in this document should be considered investment advice

• Investing real money can be costly; don’t do stupid shit

• Leave politics at the door—markets don’t care.

• Past performance is hopefully no indication of future performance

• The views expressed in this document may differ from the views published by Neue Private Bank AG

“To every action there is always opposed an equal reaction.”

— Isaac Newton

Enjoying The Quotedian but not yet signed up for The QuiCQ? What are you waiting for?!!

Get me The QuiCQ

Using Sir Isaac Newton as introduction AND title to this week’s Quotedian is a braver decision then you at first thought would think, given his track record as an investor:

But in this case we will refer rather to his law of universal gravitation, which describes gravity as a force by stating that every particle attracts every other particle in the universe with a force that is proportional to the product of their masses and inversely proportional to the square of the distance between their centers of mass.

Simplified and adapted to the investment world:

And so we are at the prices of precious metals in general and silver in particular!

Just last week, I wrote in the Quotedian dubbed “Ghidorah” following lines:

Having been invested in Silver all the way along, I start calling it a day here. A move above $120 is likely, but what is not likely at all is that Silver will then stall and STAY at that higher level.

Or, as rule #4 of famed Technical Analyst Bob Farrell outlines:

I am usually better at admitting the egg on my face (i.e. being wrong), but in this case I will take the victory lap 😉🤩

And here is what happened to Silver (pay close attention to the last candle to the right, which was Friday 30.1.):

Excuse my French, but that was $42-plus, or 38%, intraday drop highest to lowest. Blimey!

It was the second biggest daily %-move in Silver since the late 1950ies, (the biggest move was in the early 1980ies as the Hunt Brother tried to corner the silver market),

but the biggest Silver move ever in money ($) terms:

And now it get’s strange and then creepy.

And the strange thing about thing about this is, that on the month, Silver still closed up 18%!

And now to the creepy part … we really all should just be shouting “Nothing to see here!”

, as actually is everything is going exactly to plan: