Russell underperforming

Despite infrastructure push

Chart of the Day

Although the president is doubling down on his push for an infrastructure investment package, the relative underperformance of the Russell 2000 to the Nasdaq in the past week suggests markets are not yet convinced he will get a deal done. The Russell has underperformed, and it has been softening interest rates, in part due to the recent weakness of oil prices, that appear to have helped tech stocks more than their peers.

Macro

The February trade data showed exports fell by 2.6% MoM and imports decreased by 0.7% MoM. Most economists were blaming the weather. The moves left exports 10.0% lower than a year earlier, and imports 5.0% higher.

Up north, exports are doing better. Growth decreased to 4.1% YoY in February, while import growth decreased to -2.8% YoY.

The weekly EIA report showed crude inventories fell by 3.5 mn barrels last week and are now 5.4% higher than their average at this time of year over 2017-19.

The US oil refinery utilization rate was the highest since the pandemic began.

Consumers started borrowing again in February.

Markets

The VIX is edging down. It fell to 17.2 yesterday, from 18.1. A week ago, it was 19.4. The MOVE has remained higher.

Similarly to the low VIX, the CBOE US equity put/call ratio is at 0.41, compared to the long-run average of 0.62

That is because the 5-day average of US equity calls outstanding has risen by 16.1% in the past week.

There are no signs of exuberance in the EV market right now though.

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