Good Afternoon 👋
Happy Thursday, don’t forget to share with your friends/family ~ Here we go!
💥 Today’s price action was very choppy but somewhat stabilized towards the latter part of the session. Indexes opened lower on the back of a disappointing U.S. Philadelphia Fed Manufacturing Index, Toyota’s announcement of less production due to supply chain constraints and reports from Oxford University that efficacy of the covid vaccines AstraZeneca and Pfizer are reduced after 90 days of intake… talk about bad mojo. Even with all this, markets reversed to the green for the majority of the day. Luckily, we also had U.S. Initial Jobless Claims earlier which were a major positive. Claims went down to 345k which is a 17 month low, continuing the trend and reinforcing the optimism around job growth in the coming months. Beware of a slowdown caused by the delta variant. Here’s more details from (Reuters).
🌐 Cryptocurrency markets Are picking up steam again as we head into the weekend with other top coins like Dogecoin, Cardano and Ripple lead the way. Perhaps the slight boost in volume also comes on the back of a widely anticipated Jackson Hole meeting where The Fed Chair J Powell will provide commentary on the economic outlook in the US. In other news, Facebook released its own crypto wallet where it will allow peer-to-peer payments using its newly proposed ‘stablecoin’ denominated Diem Stablecoin. Here’s an interesting article on (Diem).
Tale of the Tape
As of 08/19/21 close.
U.S Markets
📈 Markets, Rates and Volatility (VIX) Almost a 3rd consecutive down day in the markets today saved by technology’s outperformance. A nice remainder that technology is still growing at the same rate and will continue to save us on days like these. On the other hand, Energy led the way down with a whooping 2.60% drop caused by underperformance of oil. As covid cases continue to grow globally, gasoline demand will struggle to meet its number which will continue driving prices lower. Energy has been the best performing sector of 2021 given the incredible rebound of oil prices. Rates again failed to maintain its gains and is now sitting near 1.22-1.24% range. Volatility (VIX) continued its rally towards the 20 price level and was able to get to a high of 24.74. VIX continues to outperform given the heightened amount of uncertainty around markets.
Here’s a look on every sector in the S&P500 from SPDR.
⚠️ The Wall of Worry In this fast paced market, it is key to note the themes that seem to be impacting stock market performance so that we keep track of its progress and can inform ourselves to tactically adjust. In my opinion, these are the most important issues that are keeping volatility and market rotations in place.
Updates as of 08/19/21:
Inflation Sentiment: The minutes revealed that the Fed is concerned about not reacting soon enough to inflation but still split on how to tackle it.
Delta Variant Strain: Covid cases still on the rise across the U.S and causing disturbances in the markets globally.
Job Market Recovery: Jobless claims at 17-month low (345k), reflecting some optimism around jobs growth. Still 10 million jobs open. Next job reports are going to be extremely important.
Fed Tapering: Most market participants anticipate November or December as the months of choice to start, but it can be announced as early as September.
Peak Growth & Asset Prices: Weak Philly manufacturing survey adds to the peak growth theory.
Check the Full U.S Economic Calendar (Here).
Earnings Today
🛍 Macy’s Had an incredible Q2 with the Same-store sales growing around 6% (compared to pre-covid levels!) and beating on both top and bottom lines. The CEO stated that both old and new customers were coming back to its store as its new store re-branding strategy is now paying off. See more details from the Press Release (Macy’s).
🐶🐱 Pet Acquisition Co. Pet wholesaler & online shop (listed in the NYSE as WOOF) absolutely crushed Q2 earnings with revenue growing 20% YoY. A strong momentum in pet ownership in the US on a rolling 2 year basis has led to substantial growth and will continue to contribute in the upcoming quarters as pets become more part of the household. More details (Here).
Check the Full U.S Earnings Calendar (Here).
Corporate News
🔞 OnlyFans Pulls Out As strange as it sounds, OnlyFans has decided to remove all pornographic content of its platform by October 1st, leaving many creators empty-handed. The decision comes on the back of private and institutional investor discontent regarding the legitimacy of the business that is run on. Crazy that the company believes it can survive without its primary business but it also makes sense given that most private and institutional investors have limitations around investing in shady, illegitimate or unethical businesses. More details (Here).
💰 Bitcoin x Mortgages UWM has announced that it will start accepting bitcoin as part of its mortgage payments if the borrower decides to use that as the currency of the payments. This comes on the back of growing institutional adoption all around corporate America, whether its banks offering to clients or opening funds to invest in it, tech companies adding it to the balance sheet as an alternative asset to the USD, Bitcoin seems that this time around is getting way more adoption. More details (Here).
😈 Amazon joins the Dark Side Just like the famous quote from Star Wars when Anakin turned bad and Obi Wan told him: “You have become the very thing that you swore to destroy”; Amazon has just confirmed its plans to open retail stores across the U.S, starting with Ohio. The company provided details of 30,000 sq ft (compared to 100k WMT/TGT), and will offer top consumer brands only. More details (Here).
Meme Headlines
Disclaimer: I am not a financial advisor. This is not a recommendation to buy or sell any security. When investing, always do your own research and asses your own risk.