Antipodean Capital Macro Strategy Daily Dec 21 - Stocks are behaving like they’re in a sustained bear market not a correction. In Q1, a US GDP and inflation downgrade cycle will unfold. This will weaken stocks, yields, & will peak the USD

Macro: US Growth: Evidence is mounting of a data cycle peak in the US, with further weak Philly Fed PMI data last night. Weaker data will be the key driver of further declines in US stocks due to Fwd EPS downgrades, falling US yields and a falling USD. Indeed the USD’s fall last night is key also, as it implies that precious metals can now start to rise and breakout, which Gold did last night.

Summary: US markets continued to slide, with main indices down 1-1.5% and tech and small caps down nearer 2%. Weak US Philly Fed PMI data, the softest since mid ‘16, saw growth optimism fade, and the USD embarked upon a potentially important slide v most FX rates. Yields, strangely, rose but that may be due to US 10’s hitting previous support lows at 2.75% more than anything. Precious metals rose.

New trades: None.
FX: Short $JPY at 112.80 risk 114.20 tgt 110. Long EUR$ at 1.1360 risk 1.1260 target 1.18. Sold NZDJPY 78.30 risk 78.90 target 75. Long JPYKRW at 9.85 risk 9.76 target 10.30
BONDS: Long 2 units ASX Banks 5yr CDS at 54bps, target 140. Long NZ 10s short NZ 2s at 104bps risk 130bps target 50bps. Sold Portugal 10yr bought German Bund at 158bps, risk 110bps target 350bps. Bought US 10’s at 2.91% risk 3.1% target 2.6%. Sold HYG at 83.55 risk 85 target 80.
EQUITIES: Long ASX All Ordinaries Top 100, Short ASX Small Ordinaries at 0.81x ratio. Stay short 1 unit Homebuilders at 751. Short US Banks Index at 93.25 risk 100 target 80. Stay short Dow Transports at 10375 risk 10800 target 9000.
COMMODITIES. Long Silver short Gold at 83.9x risk 87 target 65. Long Silver 14.08 risk 13.85 target 14.80+. Bought Gold at 1243 risk 1230 target 1300.