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Hi YXI friends,
Trade deals on. Trade deals off. This is the type of headlines investors face everyday, in deciphering the likelihood of another market crash or recession. Even worse, institutional research notes can talk endlessly about all the macro data points and past trends, without offering meaningful insights on where we are headed next.
At YX Insights, we don't pay much attention to news headlines. Instead, we concentrate on how quickly changing big-picture factors, like interest rates and Federal Reserve liquidity, affect risk assets. To do this, we use different methods such as machine learning, studying company fundamentals and valuation, looking at correlations between assets, tracking where fund flows are moving, and analysing price technicals.
By using these tools on a carefully chosen group of instruments like SPY, QQQ, TLT, BTC, and Mag-7, we get a clear idea of where the market is heading.
For those looking for our machine learning Model Signals directly, you can find them in our dedicated morning note on QQQ, BTC, TSLA (free), AAPL, AMZN and TLT. We also show them in the main content below.
Let’s dive in!
Table of Contents
DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.
1. YXI Daily Dashboard
Observations from today
Friday’s Nonfarm Payrolls signal a strong labour market, with the unemployment unchanged. Hourly earnings also grew at a slower pace than March, putting less inflationary pressure on services. This paints a more bullish economic picture than a “recession”.
Yields were higher and flatter on Friday, with 2-year yields rising by 12bp. The market sees a smaller likelihood for the Fed to cut rates by June.
Equity markets were constructive, although AAPL took a beating on earnings. AAPL is a capital-return story, rather than a product growth story. I would not short Apple due to its incredible share repurchase program.
META and MSFT continued higher above their 200 EMA. Investors may find the Mag-7s favourable during a period of economic uncertainty, as they have bigger cash piles to survive economic downturns.
SPY and QQQ Charts
QQQ Daily Model Signals are out today! SPY is Coming Soon.
The primary expectations are inked in black. The alternative expectations are inked in red where applicable.
SPY marched right below its 200 day moving average on Friday. This is a key resistance area for the bears to defend. Moving above it could further confirm that the market bottom is in.
QQQ also ended Friday just below the 200 EMA. Once moving past the 200 EMA, QQQ should head towards $525+ in a direct fashion.
FOMC Projections
We use the Fed Funds futures market to understand the market expectations of future FOMC interest rate decisions.
FOMC Date | Before Meeting | Post Meeting | Hike/ Cut in % |
|---|---|---|---|
05/07/25 | 4.33 | 4.33 | 0 |
06/11/25 | 4.33 | 4.23 | -0.1 |
07/30/25 | 4.23 | 4.08 | -0.15 |
09/17/25 | 4.08 | 3.88 | -0.2 |
11/05/25 | 3.88 | 3.68 | -0.2 |
12/17/25 | 3.68 | 3.48 | -0.2 |
01/28/26 | 3.48 | 3.38 | -0.1 |
03/18/26 | 3.38 | 3.33 | -0.05 |
05/06/26 | 3.33 | 3.28 | -0.05 |
The market now finds it less probable that the Fed would cut in June. It now expects a full cut by July, and just 3 cuts by the end of the year.
The CPI data on May 15 will be the next major catalyst for the market repricing.
3-month SOFR Futures Yields
YXI QQQ Model Signal
For greater explanations on how the model strategies work, please see my separate morning note dedicated to the Daily Model Signals (TSLA signals are free).
My technical analysis is written independently of the quant signal. This is firstly because the signal only tries to predict the daily movements and not the big picture. Secondly, by combining different analytical toolkit, we get multiple shots at the goal.
Today’s Signal: 1 (Position Long)
Previous Day Signal: N/A
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