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 - well I mentioned I liked the setup going into Friday - 5 weeks of negative equity returns and everyone was consensus bearish going into a big data point - in the end we ripped! Employment oddly came in better than expectations (223k vs 220k expected) which should had been bearish but the thing the market focused on was wage inflation which came in less severe than had previously thought (4.6% vs 5% expected). Why is that a big deal? Well wage inflation tends to be the stickiest of all and if that is showing signs of abating even with higher employment then it presents a narrow window where the Fed could potentially steer a soft landing. Expect the market to rally IMO until Thursdays US inflation reading (6.7% consensus)- the question now is not “has inflation peaked?”, its “how fast will it slow down?”. Risks seem skewed to the upside to me now - if inflation comes in lower than forecast we can fly given how downtrodden everything is!
CRYPTO - crypto had a strong session on Friday but things really started to pick-up pace on Sunday. ETH is opening at 1320 and BTC at 17200 - both up around 5-7% over the last 3 days. There were some monumental short squeezes over the weekend too in coins where short positioning was very high, very consensus and very costly to maintain (negative funding). GALA was up 70%, LIDO was up 70%, Solana was up 20% and APE was up 15%. All these names were consensus shorts and a lot of people got burnt badly! It feels like the market could continue to hunt down and liquidate oversized positions which had been put on precariously while volatility was low. Expecting a pull-back in in a few of these but I think this trend continues!
NFTs - volumes were slower over the weekend (as usual) but they have benefited recently from the lack of volatility in ETH - this seems to have come to an end. If the price of ETH goes on an upward trend here then expect NFT volumes to dwindle and floor prices to migrate lower. If you were staking Yuga assets with APE then congratulations because that has been a phenomenal trade! Floors of Yuga collections held up relatively well (next announcement 11th Jan) but we have started to see most things slow-down and even fall in a few spots. The Memeland ecosystem has been the most active - the Captainz mint seems to be hovering around 5.5E which is definitely at the lower-end of expectations going into the reveal (although Potatoz only fell to 2E). Mutant Hounds is hanging out just below 2E ahead of their reveal this week. Terraforms continued their push higher above 4E, the Memes by 6529 reached a floor of 0.3 and dormant project 0N1 Force rose above 1E on rumours the project had been bought-out by a new management team. The idea of buying out and revamping old projects could be a trend in 2023 (see Pudgy Penguins!). Rektguy maintained its floor just below 2E, DAP just below 0.3E and TABZ just below 0.25E!
GL today!