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 it's a weak start for futures this morning which find themselves down 1% on both SPX and NDQ. This comes after interest rates have aggressively surged this morning which now sees 2Y at 5.1% (the highest level in 16 years) and 10Y at 4.04%. This morning we had a huge huge beat on ADP employment (another measure of the labour market) which came in at a whopping 497k vs. 228k expectations which is an insane beat and once again another indicator of how hot the labour market is. This time the market really didn't like it hence the aggressive move in interest rates and stocks actually took a hit. This once again puts EVEN MORE pressure on tomorrow's payroll number for which the expectation is 225k...you have to think if that number comes in hot we see a bigger sell-off on concerns that inflation may have bottomed and will present a continued problem...however...there is an element of a lot of it already being priced in given the move we've seen in interest rates in the past few days.
CRYPTO - We had a strong start to the day with BTC once again breaking through 31K all the way to 31.4K and ETH up to the 1960 area; altcoins were up about 10-15% but we actually saw some correlation with macro creep back in and crypto has given up all its gains with BTC and ETH back down to 30.6K and 1904 respectively. If indeed we do see inflation return there is a two-fold effect here on crypto. On the one hand it's good because dollar devaluation is good for BTC, but on the other hand it's bad because it could mean higher interest rates which would hurt the NASDAQ and then in turn crypto. The net effect is unclear but an overall risk asset sell off would certainly not be good for crypto. Let's hope tomorrow's payrolls number comes in line or lower.
NFTs - Mixed price action on low volumes. The big news is that Blur has now added trait bidding which will earn you more points than regular collection bids. I think everyone is still trying to figure out if this is good or bad but reading the TL most think it will be bad as it will cause farmers to now start bidding and dumping mid-tier and rare-tier NFTs, and thus cause a lot of compression. So far it looks like overall price action is mixed with BAYC actually climbing back above 30ETH while Azuki and Elementals are both down about 7-10%. There's a lot of talk about how "Blur has ruined NFTs". TBH, I think Blur has created a lot of liquidity; yes, perhaps its current incentives aren't great for price action, but they have created buyers in the form of farmers which has allowed you to easily sell any top project for the last 6 months. If farmers weren't buyers, in a bear market, there may have not been any buyers at all and we could have seen aggressive 50-60% daily declines (like the shitcoin market) rather than this slow grind lower. I think we would have seen a very different dynamic in the bull, but I am just one man and his opinion!
GL out there today
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