The title of our daily Global Macro Insight was today: Markets confusing Lower Credit Costs with No Credit Risks + IPOs are an Omen.
Your scribe shares with you a chart that reminded him of his early years in the equity markets. The ETF IPO is handy, we didn’t have it in 2000.
In our GMI yesterday, the most important indication was the lack of participation in the latest all-time high for US equity indices. Only 90 components of the NYSE hit a high at the same time as the index vs. 405 in February’s previous record.
However, this February record corresponds to the historical high of the ETF IPO. Since February, the ETF IPO has collapsed, and we have written enough about the selloff on SPACs.
This divergence between the ETF IPO and the S&P500 is significant. In relative terms, the ratio may lose 30% technically, which would give a near-historic S&P500 downside magnitude.
Story to follow!!!