The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
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MACRO - Things are currently looking pretty rosy with equities having a strong day on Friday closing 1.2% and 1.6% higher on SPX and NDQ while futures are marginally in the green today. This happens despite interest rates blowing back out to recent highs with 2Y at 4.93%, I guess stocks simply are not fazed by rates as things stand. This week will be interesting as we have payrolls on Friday for which the current consensus is 200k...but we've seen this consensus number consistently get beat over the last 12 months and given the economic data we had last week there is a risk a big number here blows out interest rates even further. I suppose the market is "happy" that the economy is strong while inflation has been coming lower...it does mean the Fed can have higher rates for longer but if that's not impacting the economy negatively while doing its job of lowering inflation is it such a bad thing? One big risk I feel is still the housing market which you think has to see a deeper crash with mortgage rates skyrocketing, but also remember the sensitivity of the banking sector to interest rates given how much bad exposure there is out there.
CRYPTO - After a quiet weekend crypto continues to surge higher but it's primarily ETH that's leading the charge and as we expected we're finally seeing ETH correct against BTC and bounce back, with that ratio now up to 0.064 vs lows of 0.06 last week. It puts ETH at 1960 and BTC at 30.6K with altcoins generally up about 5-7% across the board. We continue to be at the precipice of an inflection point overall for crypto - we had a bit of a scare on Friday when a WSJ article said that the BTC ETF applications fell short, but it sounds like there will be re-applications and we just have to hope the errors can be easily remedied. It's going to be a multi-month process but it's a relatively strong positive catalyst and I suspect crypto is going to be sensitive on further headlines surrounding it. You can see the tide is turning IMO and I think it's 65/35 that we're at the start of a bull cycle for crypto which has made me want to allocate a portion of my portfolio to some higher beta plays. Could be wrong, but I think you have to take a shot if you want to make mega bucks (remember, this is kind of a gamble but also done with a small % allocation of one's portfolio…not just degen gambling all your money).
NFTs - Well, for pfp projects it's free fall...BAYC down to 29.4ETH, MAYC down to 5, Azuki at 6, DeGods at 6.9, BAKC at 2...everyone is scrambling to get out as the sentiment on majorly hyped pfp projects has gotten beaten up amid ETH looking like it's going to break out. It's interesting to see gen art hold up relatively well with Fidenzas still at 73, Squiggles at 10 and even punks have retained a 44 ETH floor and now have a material lead over BAYC. Although we didn't see a big gen art rally post Sotheby's which I was hoping for, we have seen a material outperformance; that's because people do in fact collect art that they want to hold, whereas pfp-mania is a lot of hype, speculation and flipping. I think NFTs you want to hold you need to make sure they have big cultural and historical significance, and it has to be a view that is shared by many others (i.e. you can't just be like Azuki is culturally significant because it's your bags). From here I'm not sure where we go, feels like NFTs have room to fall and while there are some big buyers, they are participants who are mostly under water such as Machi. The moral of the story here is be careful who you trust and don't have too much money in illiquid speculative risk - it's important to have NFTs that you collect because you actually want to collect them…that way price vol is less daunting.
REPORTS - Assassins Creed, Far Cry, Rabbids, what do all of these things have in common? Well, they are all multimillion downloaded games all developed by the incredible team at Ubisoft. You’d of thought with such success the team would keep things safe, following the phrase ‘if its not broken, don’t fix it’. However, it seems that Ubisoft are ready to dive further into the Web3 space with the announcement of its first blockchain based game ‘Champions Tactics’. This will be a brand new PVP Tactical RPG experimental game on PC. Not too much has been revealed, however reactions have been mixed with Ubisoft struggling to rally the traditional gaming crowd. For more information, make sure to read the reports being released later this week by clicking the ‘REPORTS’ button below.
GL today
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