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 - Equities closed the day a tiny amount higher yesterday while futures are pointing about 0.3-0.4% lower this morning on both SPX and NDQ. Interest rates are stable with the curve currently at 398/346/349/381bps across 2/5/10/30y. It's the calm before the storm as we go into CPI tomorrow, I do think the risk is skewed towards the downside there in that a "miss" is likely a much more negative event for markets than a "beat". As mentioned yesterday, if inflation starts heading the wrong way the Fed are in a real tough spot given their ammo to keep raising rates is now limited, but I suppose they could sustain rates higher for longer. The thing to once again note is that markets still expect a cut by the end of the year and it's almost like everyone is waiting for the Fed to break.
CRYPTO - Heavy price action continues although we have bounced a little bit off the lows with BTC now at 27.6K and ETH at 1840, about a 3-4% bounce off the lows of the last 24H. I still can't place why crypto has been so weak in the last 2 weeks there does seem to be some kind of technical selling and it is indeed always the technical reasons that drive crypto given it still has a relatively small market cap in the context of global financial markets. I wonder if we're at a stage now where high inflation might start to become "good" for crypto again because it either leads to a scenario of Fed hiking and killing banks which seems to be good for crypto, or the Fed sticking while inflation rises which I also think is good for crypto. Remember, the mistake people make about crypto being a good inflation hedge is that it has to be in an environment of low or possibly stable interest rates, not rising ones. The shitcoin market continues to be active but we saw further lows for $PEPE yesterday which dropped to a market cap of around $700m before rebounding. I think the fact that these coins didn't "die" yesterday is possibly a good thing, but we will need to see a meaningful bounce here to ensure we're not in a downtrend.
NFTs - Just 32m volumes across the market as floor prices seem to lose some steam. It's becoming increasingly more difficult to commentate on NFTs with hardly anything going on. One bright spot was Gary Vee spending approximately 11ETH on Rektguys; it didn't really impact the FP much at all and that does go to show how much of a lull we're in for NFTs. Next week (18th May) we'll have the Sotheby's auctions starting for the 3AC portfolio and I think that'll be an interesting bellwether for the market. We also have ACK's highly anticipated "Broken Keys" collection which goes on auction today and that'll be another thing to watch out for in respect of the crypto art market.
GL out there today!
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