Market Update: Fri 16th Aug
Tradfi outperforming crypto again...pain
gm
**MACRO** - Equities closed higher again yesterday while futures are marginally higher this morning. Interest rates continue to be strong as 10Y remains at around 3.85%. It does feel like to me traders are "long risk" treasuries so I think sometimes we're seeing a bit of "sell-the-news" type action there. We had another round of inflation data this week which saw PPI misses across the board, and CPI come in at 2.9% vs 3% expectations. It is yet more data that shows inflation is coming down and, more worryingly, that the economy is potentially weakening. So far it seems that stocks seem to have liked the price action as it is now a foregone conclusion that we will see rate cuts next month, it's just a question of how much. One thing that is positive to note is that we saw very strong retail sales data yesterday, which actually reenforces the soft landing narrative once again which is undoubtedly great for risk assets. It's a weird one because I still feel like levels across the board are very toppy, but from an economic data and monetary policy standpoint things are looking good; it's just a question of how much of it is priced in.
**CRYPTO** - We are back to the painful underperformance meta as BTC dipped to 56k last night before recovering to 58.3k this morning, while ETH is at 2600 and SOL at 144. ETH continues to marginally outperform but that momentum feels like it's petering out. There seems to be a lot of talk on the timeline about the revival of altcoins. I'm not sure what to think there, tbh, on the face of it, you gotta thing throwing some dice at stuff that is down 90% might be worth a punt but it's hard to say with conviction for me that we see a return of some of these guys which are mostly on board the bagholder express. I think it's a similar vibe with memecoins too, but tbh whenever the market rebounds memecoins are always the first to fly like 50-100% higher. I still have a preference for the big coins on Ethereum rather than Solana as there's much less competition and more sturdy price action imo, but of course the instant gratification (or depresession) casino is most rife on Solana. I think at levels here I'm inclined to hold and probably chip away at positions into strength (I say that after having derisked decently during the course of this year, had I not derisked I'd for sure be taking some chips off here even at these levels). US govt selling BTC can be a large headwind but if/once that's done would be an incredible point to buy.
GL today