The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
gm
MACRO - A ghastly day for equities as the vol continues...SPX ended the day 2.1% lower and NDQ 2.9% lower. Futures are up smalls this morning, almost 1% actually, but it's quite clear that we keep seeing this pattern of dumping on market open. On the positive side, interest rates have seen a decent rally, putting the curve at 415/395/372/357bps on 2s/5s/10s/30s. That is quite a substantial move off recent highs, by about 20bps across the curve. Oil remains off its recent lows, hovering at around $82, but would still note that the average price in September has probs been lower than the average price in August which is a pretty strong thing for the inflation rhetoric. I've not yet seen estimates for September CPI but have to think we can see a third consecutive month of lower headline inflation, something the market doesn't seem to either notice or care about rn (something that I think is overlooked). All in all, this level of YTD lows for equities seems to be proving as some sort of support, looks like we've tested it 3x this year now on SPX and thus far it seems to have held once again. Most important thing for me this week is BoE coming back to buy gilts, sounds like a tonne of pension funds would have got liquidated if they didn't and thus the central bank basically had to "throw in the towel". It is an example of how central banks WILL still step in if we're on the brink of disaster. It's the same thing for the Fed; Powell knows he needs to be aggressive in hiking but if he destroys order in the market he's also failed at his job. Current economic data has allowed him to be aggressive, but if that starts to change (and you have to think it will), I would expect some market speculation on some Fed commentary that's "less hawkish". Feeding from above, continued lower inflation (even if it's in small amounts) I think is pivotal to that (pun intended).
CRYPTO - it's honestly been a remarkable decoupling in the past few days. Crypto was basically unchanged yesterday while stocks were in the shitter, BTC this morning is close to 19.5K and ETH at 1350. And btw...we're just looking at it in USD terms here. If you look at crypto in Euro or GBP terms it's been a drastic outperformance, given the massive FX deval out there agains the dollar. But I think that is exactly it and this is what BTC maxis will tell you. When you watch the central banks hike interest rates, and then turn around and have to force buy govt bonds to protect against liquidations (i.e. BoE this week) it makes you realise what a joke governments and central banks have become. You don't get any of this fuckery with BTC, and thus I think some of the disasters we've seen this year do support a bull case for crypto, or at least a case that's less embarrassing.
NFTs - NFTs continue to look healthy although volumes seem to be concentrated across two projects currently; QQL Mint Pass and Renga. The QQL Mint Pass has done another 2.3K ETH of volumes, taking it to 3.1K ETH volumes since inception. Interestingly the unique owners is just 50%, which is quite low for a project of sub 1K and implies a lot of whales in it. I think that project is very interesting...creators get 2% royalties which is something we've not seen before (but also prob brings up securities issues lol). As such though I think it's a rare NFT in which the provenance of the minter actually becomes very relevant, and it empowers minters. Keep an eye out there IMO. As we head into October tomorrow I think we see the de-factor countdown into $APE staking and I still expect eligible YUGA assets to continue their run into that.
GL everyone and have a lovely weekend.
-OSF
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