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 tbh the Fed is just all over the place in my book. I do have to say I've yet again fallen into the trap of thinking the FOMC will be positive only for Powell to disappoint. IMO, this wasn't disappointing because he was specifically hawkish or anything, I think it was disappointing because it's becoming apparent that they potentially are just winging it right now and the market has greatly lost confidence in the Fed. We saw a 25bp rate hike as expected and analysts have pointed to an omission of prior wording that indicated "ongoing rate hikes". This means believes it is either at or close to its terminal rate (for now) - I suppose this is a good thing, ie, the Fed doesn't feel like it needs to raise rates even further to combat inflation. Powell re-affirmed his target of bringing back inflation to 2% and what that does mean is rates could stay high for a long time, throwing a spanner in the works for people who were hoping for a rate cut this year (although markets continue to price cuts sooner than Powell would communicate). Wrt banking crisis the Fed seems to think it's now contained but I wouldn't pay much credence to that given everything that has happened which was a clear oversight. From here, I think if we see more banking blow ups there is going to be A LOT of pressure on Powell to change his tune, and that's a big thing to watch out for. I guess it's good that he doesn't feel the need to raise rates further to combat inflation, but it makes you wonder if we would have heard differently had it not been for the blowups. From here, we're back to being data reliant, with the added pressure of banking contagion. Markets sold off yesterday in smalls but are bouncing with a vengeance today with SPX and NDQ up 1% and 1.7%. Interestingly we saw a rather large interest rate rally yesterday which I still can't fully get my head around.
CRYPTO - We saw a sell off yesterday which took BTC and ETH to 27.4K and 1750 respectively; it makes you wonder now whether the recent crypto rally was actually to do with banking failures or more to do with the prospect of lower interest rates and it feels like it's probably the latter. We did bounce off the lows and things are holding in OK here I think. Keep an eye out for Arbitrum which launches today and it'll be interesting to see if the price action there follows the same path as other new airdrop tokens. Given it will probably have a large market cap at launch ($10bn undiluted) I'm curious to see how it plays out.
NFTs - Another sea of red on lower volumes ($53m across the market). BAYC has dropped to a floor of 57.5ETH while everything else looks like its down about 5-10%. We saw a big move lower in Gabe Leydon's Digi Daigaku which fell by 28%, while Xcopy's Max Pain and Friends rose by 28% as we approach the 1-year anniversary for that and speculation starts to build on him doing something with it. It's not crazy to say that Blur farmers are probably mostly under water here and so I think we're seeing either some kind of unwind or capitulation of that. I think there's going to be a good entry point into some NFTs here - personally I have my eye on Punks as I view them as more of a sure thing. We'll see what happens.
GL today!
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