👀 Deutsche Bank's Top Christmas Movies, Mid-Week Flash Crash, Mag 7 vs the World

Hi guys, it’s Kieran! The year is drawing to a close, the props are pushing their Christmas promos, and the Santa rally might finally be getting started. Before you sign off, let’s get caught up with what’s going on, and make our plans for next year!

📢 Prop Firm Industry News

A relatively quiet week for the top firms. Most are focused on advent calendars and Christmas promotions. Some good deals to be had out there so be sure to keep an eye on socials this week to try and snag a deal. If you’ve had your eye on a new firm, now could be a good time to jump in and give them a try.

No major announcements from firms this week, although Tradeify have made some tweaks to their programs 👇️ 

I came across this excellent interview with Justin Hertzberg who runs the leading prop firm technology firm FPFX. They run the backend of 150+ firms, so he is highly influential and his thoughts on the industry as it stands, and where we are heading, are very interesting. Definitely worth a watch.

From Payout Junction, here are the firms who have paid out the most over the last 7 days 🏆️

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🕜 Economic calendar

Here are this week’s red folder news events. After last week’s bumper calendar, this week is practically smooth sailing. Be warned though, liquidity will be very thin, so moves will be magnified in either direction if we get any unexpected shocks throughout the week.

📈 The Macro View

Market Sentiment continues to fall.

Last Wednesday’s mini-crash was quite the wake up call. The S&P500 was down 3.5% and it seemed for an afternoon that the world was ending. We have retraced 50% of that move already, but overall market sentiment continues to deteriorate.

Whilst the indexes remain strong, it’s only the mag 7 stocks keeping them up. As we have been discussing for months, if/when tech sells-off we will get outsized moves to the downside. Something to keep in mind when planning your risk management.

Short suckers

After Wednesday’s 3.5% sell-off, many on Goldman Sach’s Prime booked flipped their longs to shorts. Goldman's Vincent Lin writes: "In cumulative notional terms, the short selling in US equities over the past 4 sessions is the largest since early January and ranks in the 100th percentile on a 5-year lookback."

At these high valuations, it doesn’t take much for the market to get spooked. Even for the “smart money”.

Mag 7 - Pushing all-time highs in concentration

The magnificent 7 stocks now represent 31.2% of the S&P 500’s market capitalization, essentially matching the all-time high hit on July 9. This market is highly concentrated at historically high levels.

The world is all-in on Megacap tech.

Magnificent 7 margins are, well..magnificent

The Mag 7 stocks collectively enjoy a forward profit margin that’s far wider than the S&P 500, 25.4 vs 13.5. The hype is justified.

US vs the World

Not surprising, but going into next year, JP Morgan continues to favor the US over investing anywhere else "We keep our preference for US over Eurozone and over EM".

More all time highs, and again, this is all mega-cap tech companies. Feels like only a black swan can flip this trend.

Top Christmas films according to Deutsche bank.

Let’s finish off with some important macro analysis from DB. Home Alone ranks as the number 1 Christmas movie, followed by Die Hard. If you can pull yourself away from the charts for a couple of hours, either of these two options would be a great choice imo 🎄 

OK guys that’s it for this week. There will probably be no newsletter next week as their will be very little going on. Thank you for reading this year, I appreciate every one of you. It’s a joy to write, and helps me with my weekly analysis. I hope you get something from it too and it gives me great pleasure to have your readership, so I wish you a happy holidays and hope to see you again next year!

Kieran 🎅 

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