The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
gm
MACRO - We're starting to see some weakness once again in equities, the SPX and NDQ closed 0.6% and 1.9% lower yesterday but at one point were a decent amount lower and actually managed to rebound off lows. Futures, however, are pointing lower this morning, with SPX and NDQ down 0.7% and 1.2% respectively. What's causing a dampener on the current mood? Well it's corporate earnings. META and AMZN stock both fell as much as 25% and 18% respectively in after hours trading which are simply huge huge moves, especially considering AMZN has a market cap that actually exceeds the entire crypto market as a whole. With the weakness in earnings we did see a huge rally in interest rates yesterday, but they've since sold off again which puts the curve at 438/418/402/412bps respectively on 2/5/10/30y. I guess one positive of earnings weakness is it does put more pressure on the Fed to be less hawkish/aggressive but it also gives you an insight into how bad a recession could be and its impact on equities.
CRYPTO - Quite remarkable outperformance sees BTC still north of 20k and ETH north of 1500, but these numbers represent about 3-4% declines from yesterday's highs, while alts are generally down about 5-7%. It seems everyone is watching the ETH supply chart very closely (http://ultrasound.money), which shows ETH is very close to becoming deflationary. At present it's still less that 1300 new supply of ETH that's been generated since the merge 43 days ago. I can't pretend I fully understand how these mechanics work but it's certainly a massive potential tailwind for ETH, particularly in instances when the short base is high. I think it's something to keep an eye on and I'm curious to see its impact in bull markets, it's a mechanic that I think can potentially give ETH a lot more upside than we've seen in the past.
NFTs - Pretty decent volumes across the board with a fresh wallet apparently buying $900k worth of NFTs overnight including BAYC, MAYC, CloneX, Azuki, Doodles and Cool Cats. Given the recent ETH pump we've seen, it's very encouraging to see fresh capital come in and sweep NFTs. Furthermore, most floors look about 5-7% higher to me, so for once, we've actually probably seen NFTs appreciate a decent amount in dollar terms over the last month or so. In addition to that, listings look lower across the general landscape, so we're seeing some decent strength here. I'm curious if we'll see another bull run in January or not. I'm a big believer in the calendar effect, but note we'll also have a $BLUR airdrop then and we know Metamask's $MASK token is also waiting in the wings. Arbitrum is another highly anticipated drop, so I do think there are some decent potential tailwinds to keep an eye out for.
Hope everyone has a good weekend!
-OSF