Range-bound day in TradFi with equities consolidating around the recent ranges but yields higher across the curve on the back of increased corporate supply. With Powell due to speak to Congress on Wed/Thu, issuers have been rushing to get their supply out of the way in the 1st two days of the week, with $30-$35bln looking to be priced in the 48 hour window. The only major headline of the day came from Atltan Fed Bostic, where he showed concern in his essay that a rate cut could unleash pent-up exuberance or new demand driven inflation. He further clarified in a Q&A that he expects “the first rate cut to be followed by a pause to assess…Hope asset runoff pace can continue as long as possible”.

A full line-up of Fed speakers await for the rest of this week, with Daly (Wed), Kashkari (Wed), Mester (Thurs) and Powell (Wed-Thu), so markets will be keeping an eye out for any further hawkish readjustments.

Over in equities, nothing particularly earth shattering, though Bloomberg notes that the performance concentration in the SPX has gotten to record extremes, with the % of members outperforming the index at the lowest levels since the dot-com bubble. Said another way, the rise in the SPX is driven entirely by just a small handful of stocks (e.g Nvidia), with even long-term stalwarts such as Apple and Tesla faltering against the main index YTD.

Obviously, a lot of the outperformance from the winners can be attributed to the outsized EPS growth contribution versus the median stock, but there is still a case to be made that we might be nearing an interim top in stocks (famous last words), with risk sentiment running amok across nearly all observable risk asset classes (stocks, credit, crypto).

Speaking of crypto, pretty much the same script with majors/altcoins/memecoins all gapping higher with mentions of life-changing gains being mentioned all over X/Twitter again. On the ETF side, volumes continue to stay healthy with the 2nd largest volume day for the group at $5.5bln according to Bloomberg.

On the native side, perpetual funding rates are extremely high with annualized rates gapping to 50%+ over the weekend across many exchanges, with BTC future basis widening to ~30% as well. The FOMO picture is even more evident in options, with a large number of $70–80k call strikes being purchased over the past 24 hours, as expectations of BTC hitting $100k before the summer are starting to rise as the ‘everything rally’ goes on for another day. Stay safe everyone!

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