Infrastructure🤝Cryptos
U.S Oil Demand Grows 🛢🔥
Good Afternoon 👋
Another relatively slow day in the markets today with both SP500 and DOW hitting all time highs but giving back majority of those gains throughout the day. Nasdaq fell as Mega cap tech continues to slowly retreat from its all time highs. On the economic front, The Department of Labor stated early Tuesday that U.S worker productivity fell in Q2 , primarily driven by lack of workforce mostly in the small business sector. If we recall yesterday’s JOLT report, there was a record 10 million job openings because not enough people are willing to fill these positions. On the energy front, we had the monthly report from EIA, forecasting that gasoline demand will continue to increase in the U.S into the next couple of months according to the data. Oil spiked into positive territory after facing a steep decline in the past few weeks due to covid variant threats across the globe. Cryptos continue to rally with BTC hitting 46k and ETH hovering around the 3k area. Makes you wonder if cryptos are rallying due to a bigger news in play? Just today, VanEck filed for Bitcoin ETF futures, which is a derivative based on its bitcoin ETF that has not been approved by the SEC yet. No bitcoin ETF has been approved by the SEC yet so be on the lookout for that catalyst, it will for sure rattle the crypto markets.
Headlines
✔️ 1$ Trillion Infrastructure - Pass The U.S Senate has finally come to an agreement after several months of negotiation, passing a historic $1 Trillion infusion of capital to renew the U.S entire physical infrastructure, from bridges, roads, to railroads; everything will be renewed for the future. The strong bipartisan support shown today reflects the grim sentiment that U.S lawmakers are experiencing towards major climate changes across the world and the U.S with the course of time. Looks like politicians are finally getting it right. Read all the details from (NYT).
🗽 NYC Governor role up for grabs After harassment allegations started to pile up against Cuomo, it was just a matter of time when he would be held accountable in the public spotlight. As a consequence, the NYC governor has put in his 2 week leave and will be replaced by Kathy Hochul, marking the 1st female governor of the state. More details (Here).
Without further delay, the tale of the tape:
Tale of the Tape
As of 08/10/21 close.
U.S Markets
📈 Markets, Rates and Volatility (VIX) Slight divergence today in the major indexes with Energy, Financials and Industrials leading the way for the SP500 & Dow while Nasdaq retreated due to tech’s underperformance. Both SP500 and DOW made new highs today majorly driven by oil’s good momo and Nasdaq continues to be well in range of making a new one as well. Markets seem to stick with the rotation from value/defense to growth and vice versa depending on the type of day we’re having and the 10 yr rate’s direction. On this note, 10 Yr Rates continued its upward path marking a 6th consecutive day of gains closing at 1.35%. Volatility (VIX) continues to spike to 17 but fails to retake the level. Traders/Investors are sticking to the rotation narrative so given the many earnings scheduled for this week, cash will most probably be repositioned to gain exposure to these companies. Actually just yesterday, FactSet released a report that SP500 earnings growth for this quarter has been the highest in over 13 years, driven mostly by energy’s big upside. Expect market participants to follow the trend.
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 08/10/21:
Inflation Sentiment: Inflation still continues to be on target for 2% on the long run so for now all the readings are being treated as temporary. We will see in the next coming months how the elevated economic activity will affect prices and the consumer.
Delta Variant Strain: The EIA came in with a positive note reiterating U.S demand will persist well into next months, offsetting any setbacks from the new variant.
Job Market Recovery: Jobs numbers reflect a wide open 10 million jobs but a detriment in jobs in the services sector as people are not getting back to the workforce.
Fed Tapering: Fed officials continue to go back and forth with Fed Evans mentioning today that he needs to see “a bit more jobs” to be confident about starting to wind down asset purchases.
Peak Growth & Asset Prices: No updates.
Check the Full U.S Economic Calendar (Here).
Earnings Today
👾 Coinbase Crypto exchange giant reported strong Q3 earnings with a beat on both top and bottom lines. particularly revenue was almost triple of what was expected from analysts as crypto trading has increased greatly in popularity which is driving the companies fees through the roof. Detailed report (Here).
⚽️ Fubo Sports streaming underdog posted good Q3 numbers particularly with losses narrower than expected. On the other hand, subscriber growth was oustanding with the company now forecasting over 900K subscriber by next quarter. Everything from user engagement to revenue metrics were revised to the upside and reiterated positively by CEO David Gandler. Detailed report (Here).
Check the Full U.S Earnings Calendar (Here).
Corporate News
Venmo 🤝 Cryptos The company is said to start offering cryptocurrency exposure to its credit card users by using its cash back system. Venmo is aiming to attract customers by offering 0$ transaction fees associated with its cash back purchases so users can buy BTC, ETH, LTC and BTC cash at face value. More details (Here).
🧾 Exxon raises “for sale” signs Exxon Mobil has long promised to address its enormous debt of over $70B and has today accelerated its efforts by putting up over 5,000 gas wells of its U.S shale producers across the state of Arkansas. Report from (CNBC).
💊 Oral Covid Vaccine Trials MyMD’s subsidiary Oravax Medical commenced Phase II trials of its Oral covid vaccine which will take in Israel. The vaccine is said to act as a standalone as well as a further booster. More details from (Nasdaq).
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.