The Global Supply Chain Crunch

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Degenerate Business School

Business


In Equities:A Tech and Growth sell-off drags the S&P lower. As the third quarter grinds to a close, we are roughly 4% off the all time high reached in early September. So for all the clamor and discord of impending doom and the end of days, still not technically in a correction. What's happening? A host of anxieties building to moody sentiment and a rapid, incremental climb in treasury yields. To recap:A more hawkish tone from the Fed (which is still extremely dove-ish in historical terms)Contagion risk from Evergrande and the Chinese real estate sector it representsDebt ceiling angstSensational chatter of oil and gas shortages, with pictures from the UK showing scenes from 28 Days Later at the petrol stationAll of that compounded by ongoing bottlenecks in the Global Supply ChainWhere did this lead 10 year yields?Current rate of 1.472 is above the 200 day moving average (1.40) and the 50 day moving average (1.32)But we are still below the ~panic button level of 1.70And what does this mean in terms of sector rotation within equities?A bullish, cyclical trend in traditional energy (XLE, ERX)A further drubbing for Cathie's funds and growth-y future things (ARKK, XBI)In Crypto:Not to leave Crypto behind, Bitcoin is showing a promising technical pattern of consolidation around both the 200-day and 50-day moving average that telegraphs more upside...IF historical patterns hold. To boot, there is generally a flash of seasonal growth in the 4th quarter. Charts:S&P 500https://www.tradingview.com/x/41RdtZZf/US 10 Year Yieldhttps://www.tradingview.com/x/9ZRyXV8w/XLEhttps://www.tradingview.com/x/9FwDClmL/ARKKhttps://www.tradingview.com/x/7Trt0G1c/BTCUSDhttps://www.tradingview.com/x/JO74iVEj/