The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
gm
MACRO - Happy Halloween everyone. Well this is going to be a BFW (big fucking week). Tomorrow, the first day of the FOMC commences, and it concludes on the 2nd November after which we'll the interest rate decision (75bps once again is market consensus) but more importantly some commentary from the Fed wrt where things stand. As you'll remember, a WSJ article a couple of weeks ago alluded to there being a divide forming in the Fed with some thinking that it has been too aggressive in its hiking policy and needs to slow down, on fears of a deep recession. Indeed both housing and labour data has been getting incrementally softer, while inflation has come lower for 3 months in a row with the months of Q4 having easy comps vs last year. Any such communication from the Fed to confirm this speculation I think would be taken positively by markets, it would be short-term good because we can get some more clarity wrt a timing of a pivot (the Fed changing its stance on interest rates) and because of current positioning. Medium to long term it does mean there are legit concerns wrt the economy and Q2 corporate earnings have already shown such signs. Once again, it plays into the Q4 rally and 2023 grind lower thesis. On Friday we'll get the payrolls number for which the consensus is 220k, vs last month's 263k. Indeed for the last couple of months we are starting to see some materialised declines of magnitude which is one of the indicators the Fed uses (would have been more helpful to get the payrolls number BEFORE the FOMC this month but yeah). Next week we'll have midterms and inflation. So yeah..there's a lot. We saw stocks squeeze on Fri with SPX and NDQ ending 2.5% and 3% higher respectively, while futures are smalls lower today. Would note there's been a reasonable move higher in interest rates which puts the curve back at 449/425/406/415bps on 2/5/10/30y...with 10y notably back above 10%.
CRYPTO - We did see some real weekend strength on Saturday with BTC heading north of 21K and ETH as high as 1650 I believe. This was coupled with a sizeable rally across an array of altcoins but we ended up giving back some gains on Sunday/today. We saw $DOGE have an incredible 100%+ pump over the weekend before retracing about half of that move on speculation that Elon Musk could integrate utility of the currency with Twitter somehow. The pump makes sense when you think about it, and the drop back down also makes sense to me...but how knows, maybe there's something to it, particularly with Binance's involvement of the Twitter acquisition maybe we can expect there to be some more crypto or web3-esque additions. Elsewhere in ETH land we were getting excited about ETH becoming deflationary last week, but it appears we are once again trending to becoming inflationary with the supply change having doubled from last week (in absolute terms that number is still tiny compared to what it would have been with PoW).
NFTs - The Elon effect is in full swing with CryptoDickButts leading the charts with a 46% rally taking the floor to 2.9E after Elon Tweeted a picture of a DickButt:
Note the exclusion of the term "Crypto" there, as the idea of "DickButts" have long been around in internet history, CryptoDickButts are simply the NFT version of such a meme. Indeed, the initial reaction is "Elon is buying CDBs" but I'm cautious of such a belief (and Elon has yet to confirm his NFT purchases although one can only imagine he is the ultimate degen). Elsewhere volumes are benign and listings are mostly unchanged. Interestingly Reddit volumes are materially lower, but floor prices have held in well.
GL this week!
-OSF