Antipodean Capital Macro Strategy Daily Nov 13 - Stocks retreat. Goldman stocks collapses as strategists warn of sharp drawdown risk. Sell ASX today. Sell CAD v USD & JPY as punters aren’t short enough or long enough JPY.

Today’s themes: Stocks declined again last night for no apparent reason driven by data, news or policy given the Veterans Day holiday, and no real EPS news. Market leaders led the way down.

Macro: US Equities & growth trades: Stocks continued to soften last night. We think this week will see further 2-4% declines while Friday’s highs are not challenged. (Theme: Our work here hasn’t changed. US equities are at the greatest over valuation extreme in US equity history. The Fed are hiking and policy is now tight given where core inflation is (falling), not easy. Data cycles are probably peaking. However, EPS/margin trends are still up. The 3rd Yr Presidential cycle is very favourable and supportive for new highs and US data is still at cycle high, implying strong growth still. Coming weeks will tell whether October’s swoon is the start of something more worrying, or whether stocks will make new highs. For now, the pathway remains down).

Summary: US stock markets suffered heavy losses but with no real explanation in terms of data, policy or news. The Veterans Day holiday shut US Bond markets, but stocks fell anyway, with tech, small caps and for the first time large caps leading the way lower. The USD rose to a new high for this move, contrary to our own expectations, pressuring commodities lower, and the VIX spiked higher. HY Bonds also retreated hard.

New trades: Long Dec VIX at 17.45%. Sell ASX200 at 5845 risk 5945 target 5600. Buy $CAD at 1.3240 risk 1.3160 target 1.38. Sell CADJPY at 85.85 risk 87 target 78. USD Index shorts from 96.17 stopped at 97 (-0.9%).
FX: Short EURSTG at .9010 risk .9150 target .84. Long AUDNZD 1.0750 target 1.12 stop 1.05. Long JPYKRW at 10.035 risk 9.60 target 13. Long GBP 1.2770 risk 1.27 target 1.33. Short AUDJPY at 82.20 risk 83 target 78
BONDS: Long 2 units ASX Banks 5yr CDS at 54bps, target 140. Long NZ 10s sell NZ 2s at 104bps risk 130bps target 50bps. Sold Portugal 10yr bought German Bund at 158bps, risk 110bps target 350bps. Long US 2-10 curve flatteners at 26bps/35bps risk 40bps target 10bps.
EQUITIES: Long ASX All Ordinaries Top 100, Short ASX Small Ordinaries at 0.81x ratio. Short US Homebuilders at 755 add at 800 risk 850 target 650. Short R2K at 1550 risk 1575 target 1450.
COMMODITIES. Long Silver short Gold at 83.9x risk 87 target 65.