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Category: topSource: redinewsNov 15th, 2021

Gary Gensler: Vast Majority Of Retail Market Orders Go To Dark Pool

Following is the unofficial transcript of a CNBC interview with SEC Chair Gary Gensler on CNBC’s “Squawk on the Street” (M-F, 9AM-11AM ET) today, Tuesday, October 19th.  Following is a link to video on CNBC.com: Q3 2021 hedge fund letters, conferences and more Vast Majority Of Retail Market Orders Go To Dark Pool: SEC Chair […] Following is the unofficial transcript of a CNBC interview with SEC Chair Gary Gensler on CNBC’s “Squawk on the Street” (M-F, 9AM-11AM ET) today, Tuesday, October 19th.  Following is a link to video on CNBC.com: .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Vast Majority Of Retail Market Orders Go To Dark Pool: SEC Chair All references must be sourced to CNBC. BOB PISANI: Hey guys. Lot to talk about today. We’ve got a Bitcoin futures ETF trading, we’ve got the GameStop report out. What do they all have in common? Well they’re all regulated by the SEC. Let's talk to the man in charge, SEC Chair Gary Gensler joins us right now. Mr. Chairman, thanks very much for joining us. GARY GENSLER: Good to be seeing, good to be with you, Bob. PISANI: So, I want to talk about your GameStop report but I have to start with Bitcoin. We've got a raft of cheering people down here from ProShares, ProShares Bitcoin ETF. The futures ETF is starting trading just started a few moments ago. I have to ask you can you, can you explain to our viewers why you chose to allow a Bitcoin futures ETF to begin trading but have not yet approved a regular Bitcoin ETF? GENSLER: Bob, thank you for that question. Just to give you a little context. I think that we in the official sector should be technology neutral but not policy neutral and so what we’re trying to do is ensure to the best we can within our authorities to bring projects into the investor protection perimeter. And so, what you just mentioned, Bitcoin futures have been overseen by our sibling agency the Commodity Futures Trading Commission which I was once honored and proud to serve there and that's been four years and some of these applications came in and when effective, as you said one of them went effective with regard to those products over at the Chicago Mercantile Exchange that our sibling agency oversees. PISANI: I think the important thing here is you've made it clear in the past that this does not have the some of the concerns that approving a full Bitcoin ETF would have. You don't have people breaking into exchanges for example, you don't have problems with fraud or manipulation. Was that a factor, it seems that that was a factor in the fact that you went ahead and allowed the Bitcoin futures ETF. You don't have those particular problems here. GENSLER: Oh, well I'm not going to get into any one application or project. I think what you have here is a product that’s been overseen for four years by a US federal regulator and CFTC, and that's being wrapped inside of something that within our jurisdiction called the Investment Company Act of 1940. So, we have some ability to bring it inside of investor protection. It's still a highly speculative asset class and listeners should understand that underneath this, it still has that same aspect of volatility and speculation but there's our sister agency is overseeing this for four years and then it brings it inside, as I said, an 80 year old law here at the SEC. PISANI: I move on to the GameStop report usual thorough report from your staff. I think this will be the historical record of what happened but I'm curious about the recommendations. You have been talking for many months about payment for order flow and gamification and the potential deleterious effects of both of these on the US trading system and yet there was no discussion about how this might have impacted the trading for GameStop. I'm wondering if there is some kind of connection? Was payment for order flow and gamification factoring what happened with GameStop or not? The report doesn't say. GENSLER: So, I think that the events of January revealed a number of things and as the staff suggested for additional consideration these two topics plus two others that we look out for the investing public when brokerage jobs, when robo advisors are using new data analytics and, and marketing to us using behavioral prompts to possibly get us to trade in a way that benefits them, benefits the application and the, and the program in conflict potentially with what benefits asked the investing public. Also imbedded in some of those issues are the structure of the stock markets itself. It's so much of the market now is, is evidenced in the report in January and these ones are about half of the market is not going to a transparent sort of market that fully lit market that you earlier showed, but it's going to dark holes and wholesalers so those issues the staff suggested up. What, we're going to take a closer look at in terms of what policies can help the public. JIM CRAMER: Chairman Gensler, it's great to have you on the show again. I know that your position on trying to invest. Well, I read a great book that you wrote about no free lunch, that’s why we have diversification. And then I read this report and I absolutely understand, it's very thorough it's got great stuff and talks about how options didn't really affect things, what did impact. And then on page, the last, number two, there's this sentence, “payment for order flow in the incentives it creates may cause broker dealers to find novel ways to increase customer trading including through the use of digital engagement practices.” I read this and it felt like a bit of a lamentation. I felt that right before that you talked about, don't forget, companies underneath the memes are actual employees, customers plans to invest, and then you get to this and I wanted you to be able to say, it may be this is unfortunate because I know that people want, they want to open as much engineering, but this is not Chairman Gensler. Chairman Gensler’s against any idea that we should be doing these digital engagement practices that might hurt investors. GENSLER: So, let me sort of address that. I think that we’ve found on platform after platform whether it's in, in, in streaming apps or retail apps, a very social media, that we're in a transformative time. The 2020s is rapidly changing on top of the invention of the internet, internet many decades ago, we have data analytics, artificial intelligence that markets to each of us a little differently. I mean you might type something in a text and then all of a sudden find you're being advertised something you typed to a personal friend in the text. So those features are all around. What we're raising the question is, is in finance, what does that mean for finance? These digital engagement practices, the underlying separating you from me and from all of us and then if the applications marketing for their revenues and payment for order flow does have an inherent conflict that the brokerage application is increasing their revenues if we trade more. And so are they using these behavioral prompts to get us to trade more or to move to different products, options trading or trading on margin which inherently have more risk in them, and where do we, the SEC, help the investing public out to help them do well when there's these inherent conflicts inside the, kind of inside the box. CRAMER: Right, but I guess what I struggle with is, you've got this great moment here. There are one million of these accounts belonging to investors with an average age of 19. I think these investors if they're focusing on, let's say, trying to put together a fantasy team, I think they’re spending a lot more time on fantasy trying to figure out who the, who's on tonight. How to be able to make it so what's the line, what's the over, they’re spending more time Chairman Gensler on their fantasy lineup than they are trading. They are trading like banshees. Don’t we want to encourage them to spend as much time as they do on their fantasy lineup. GENSLER: Well I think that that investing for the long term tends to have higher returns than day trading or even hourly trading and sometimes, not always, but sometimes these applications encourage individuals to have high trading volumes or trade on margin or options that have inherently higher risks. And so that's where, there’s, there's a worthwhile public debate and I think, I thank the staff of the SEC to serve up this report. I think yes, as you said earlier, now it's the job of the commission to sort through what we do with these additional considerations. PISANI: Mr. Chairman, the staff determined that a short selling squeeze was a factor, but it wasn't the primary reason for the big sell, price run up in GameStop. It was positive sentiment I'm reading from the report here that sustained the week's low-price appreciation, positive sentiment, not the short squeeze, short covering was a small fraction of the overall buying volume. I guess I'm wondering though despite that you've been talking about potential changes in short selling rules. Do we need to make any changes? Do we need more, for example, disclosure about short selling? GENSLER: I think that the markets could benefit from greater transparency, not only on short selling, but a related activity in the markets which is called stock loan when you borrow a stock to sell it short. Congress actually, our US Congress actually about 11 years ago passed two provisions that mandated, directed the SEC to do greater transparency in short selling, and this related activity stock loan. So I have asked staff for recommendations on this to promote, meaning that on a regular basis the market would benefit from seeing the volumes and activity in the lending market, meaning lending securities, and also this short selling activity. PISANI: Just to follow up on payment for order flow. Most, most viewers of the trading activity in the last 30, 40 years agree that the American investor has never gotten a better deal not only have commissions essentially go to zero but even trading costs are much lower, execution quality has improved dramatically in the last 30 years. I know there's a little bit of debate about it exactly how much but the average investor seems to be getting a very good deal, can you, do you feel you're going to be actually able to demonstrate a real harm from payment for order flow? Number one and number two, can you tell us what comes next here you've got the commission with your staff with a very excellent report on the facts, but not a lot of direction about where it should be going. Is the commission then going to meet and make recommendations or make rule changes from here? What's the path here forward after this commission staff report? GENSLER: Well, let me say this, you're, you're right that our markets have gotten more, have moved to zero commission but it doesn't mean it's free. There's still payment underneath these applications. It also doesn't mean that it's always best execution and we've had, we've had cases where we've announced in the last 18 months where there has been this conflict between the broker on the one hand and this payment for order flow on the other. And let me just remind your viewer that if you place a retail market order, as shown in this report, the vast majority of those don't go to the transparent lit markets, they go to the dark market with these, these pools that are not competing and so I’ve asked staffing, can we achieve this simple concept that your order when you place it competes with other orders and buyers if you're selling will compete to get, and to pay you hopefully, the best execution for that price order by order by order. That's what I've asked staff and I think that that's an important concept of competition that helps the investors on one side, helps the companies on the other side that are raising money in our markets. CRAMER: Well, Mr. Chairman, again I want to praise the staff because those who read this will know there was not a vast conspiracy against them which was really the topic that I know a lot of us felt we were really razzed by because we're all in on some sort of Citadel conspiracy. I think that's completely busted but there was something on page 12 that disturbed me, you talk about some of the marketplace may possess superior information about underlying assets. That sir I think is illegal. Did we discover that some of that superior information should be in front of the commission to find out what's going on? GENSLER: Well I think that you chose the words carefully maybe there but when, when order flow when, when trading is being purchased and sent to one wholesaler or another wholesaler then they have information that the rest of the market may not have at least for a short period of time, and, and even milliseconds matter in these markets. And so, that's what we're also looking at. You're absolutely right that we, I think from a policy perspective want to look at that and how we instill greater competition in essence for that data as well as for that order flow. DAVID FABER: Chair Gensler, Chair Gensler, David Faber here. You know we had you on not that long ago, obviously long ranging interview. I wanted to come back to SPACs if I might just for a moment. Haven't really heard that much from the SEC yet and I wonder where you are because it does appear that the market has been making its voice heard when it comes to SPACs. We are seeing the sponsors changing their compensation arrangements, we've seen the pipe market really frees up, and so is the market doing its job, and the SEC therefore perhaps doesn't have to take significant action in any way in terms of regulation for SPACs? GENSLER: I think that there is, is a need here for greater transparency, greater disclosure. These are, these are innovations that have happened in our markets, special purpose acquisition companies, but they're costly, and they may also have inherent conflicts between a promoter or sponsors who is taking generally about 20% of the offering that if you raise a billion dollars, that's $200 million. Can I repeat the number? $200 million to basically raise money and a blank check type of shell company and then you have two years to go out and try to buy something. And there's also this conflict that if you don't buy something, you don't get the promoter, or the sponsor doesn't get that 20%. So there's an incentive to buy something even if it's not the best purchase in the world particularly as the clock is ticking and you get to the end of the two years so I know I've said this a lot about staff working on recommendations. These, these rules are highly detailed. We need to work on the economic analysis which is so critical to good decision making. You're five commissioners, and so the process does take a number of months and sometimes the public says, where's that document or where's that rule proposal but I would envision that staff will put something up to our five-member commission and if, if there's the support of the commission, we'll put it out to public comment with regard to SPACs with regard to a number of these other topics we've talked about as well. PISANI: Just a follow up to my question. The second part you didn't quite answer. What's next here? What happens after this report? Does the commission, meet your five commissioners discuss what you want to do? Are you going to make proposed rule changes? I know you have a request for comment on digital engagement practices that are out there. What will become of that? I guess I'm looking for a roadmap for what you're trying to accomplish here. GENSLER: So, the five of us generally meet bilaterally and then sometimes we meet as a, as a group and as a group when we do that often that leads to what's called a public meeting and the cameras are on and the like. In terms of what's next is staff recommendations on the plumbing, this is called the clearing and settling side. There seems to be broad support in market participants to shorten the settlement cycle. We are secondly assessing the comments that came in on digital engagement. I’ve asked staff to consider whether there's some recommendations we have on those potential conflicts and also better protecting the public. And then the third area that was highlighted was market structure, the entire equity market structure. We haven't updated it in 16 years since 2005 and I think technology's changed so dramatically that it's worthwhile taking a very close look and seeing if we propose something now. In all of these areas as well as short selling, which I talked about earlier that I would anticipate we, we propose things because Congress has told us, mandated that we need to and these four areas I'd envision his staff is debating it, commissioners will weigh in, and then if we think so, we'll put it out to public comment. I, my, my hope is that we put it out and have a lively public debate and see what's best for the markets, and for the investing public. CRAMER: Mr. Chairman, on page 12, page 6, “In order for a customer to trade options, broker dealers must conduct due diligence that option trading is appropriate for the individual customer.” Sir, Robinhood has millions of customers and there's no way they're doing that. I mean, isn't it time we examine that process? GENSLER: Well, so it's, this is the, this is one of the challenges to get greater access, our user interfaces one our mobile phones have made it very efficient but then the question that you've just raised is also appropriate, is somebody on the other side looking as to whether, doing the due diligence as you say about that customer opening a higher risk account, an options trading account for instance or a margin trading account, and I think the staff appropriately flagged this issue. PISANI: Mr. Chairman, I want to thank you for coming on and giving us your thoughts and we very much appreciate the work of your staff and laying out the facts and obviously this is a very important historical document in terms of what happened and we look forward to having you on again soon to let us know what the next steps are. Gary Gensler, Chairman of the SEC Thank you very much for joining us. GENSLER: Thank you. Updated on Oct 19, 2021, 12:24 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkOct 19th, 2021

Fear And Panic As Bitcoin Crashes 50% From All Time High

Fear And Panic As Bitcoin Crashes 50% From All Time High Just two months after cryptos hit an all time high amid widespread euphoria that the newly launched bitcoin ETF would lead to even more substantial upside, the two largest tokens have lost half of their value, with the broader crypto sector suffering more than $1 trillion in losses amid an accelerating liquidation panic that the Fed's tightening cycle will lead to another crypto winter.  Such is the volatility in the sector where, as Bloomberg put it overnight, there has been just one constant recently: "decline after decline after decline." Of course, for veteran hodlers, Bloomberg hyperbole seems trivial in a world where 80% drawdowns are the norm and the current drop may have a ways to go before it hits a bottom, before a new all time high is hit. Where Bloomberg is right however, is that superlatives for the latest carnage have been easy to come by: Friday’s decline led to the liquidation of more than $1.1 billion in crypto futures positions and overall more than $1 trillion in market value has been destroyed since the last peak. In other words, "the meltdown is pouring salt on an already-deep wound." After the latest furious puke that pushed Bitcoin RSI's indicator to the most oversold level since the covid crash in March of 2020... ... Bitcoin, which lost more than 12% on Friday, saw its price drop just above $34,000 with Ethereum sliding as low as $2,400, as the two largest digital assets now trade at a 50% discount from their all time highs and are back to levels last seen in late July, early August. Other digital currencies have suffered just as much, if not more, most meme coins mired in similar drawdowns. While the selling has been relentless for the past two months, it accelerated in the past three weeks, after the latest Fed minutes - published in early January - showed its intention to not only hike rates but to accelerate the unwind of its balance sheet, which has sent all "bubble baskets" plunging, with bitcoin getting hit especially hard amid the carnage. And while there have been much larger percentage drawdowns for both Bitcoin and the aggregate market, according to Bespoke,  this marks the second-largest ever decline in dollar terms for both. “It gives an idea of the scale of value destruction that percentage declines can mask,” wrote Bespoke analysts in a note. “Crypto is, of course, vulnerable to these sorts of selloffs given its naturally higher volatility historically, but given how large market caps have gotten, the volatility is worth thinking about both in raw dollar terms as well as in percentage terms.” Another fact that Bloomberg gets right, is that over the past year, cryptos have transformed from relatively uncorrelated assets providing diversification during market turbulence, into what is effectively a high beta stock. This is easily seen in the following chart showing the 60d correlation between cryptos and stocks. One can thank institutional adoption for that, because the same institutions that are now facing margin calls on their tech holdings, are also dumping cryptos to provide much needed liquidity. “Crypto is reacting to the same kind of dynamics that are weighing on risk-assets globally,” said Stephane Ouellette, chief executive and co-founder of institutional crypto-platform FRNT Financial. “Unfortunately for some of the mature projects like BTC, there is so much cross-correlation within the crypto asset class it’s almost a certainty that it falls, at least temporarily in a broader alt-coin valuation contraction.” Antoni Trenchev,, co-founder of Nexo, cites Bitcoin’s correlation to the tech-heavy Nasdaq 100, which right now is near the highest in a decade. “Bitcoin is being battered by a wave of risk-off sentiment. For further cues, keep an eye on traditional markets,” he said. “Fear and unease among investors is palpable.” According to  Art Hogan, chief market strategist at National Securities, it’s useful to think of cryptocurrencies as living in the same space as other speculative sectors, including special-purpose acquisition companies and electric-vehicle makers. “When we’re in an environment where all of those riskier assets are selling off, crypto is going to find itself doing the same,” Hogan said. “When the Nasdaq 100 or any of the other more-speculative, rapid-growth, momentum-type asset classes start to gain some traction, so will cryptocurrencies.” Unfortunately for Bitcoin longs, one place where the token's correlation is especially high is that to such market naplam as Cathie Wood’s sinking ARK Innovation ETF, a pandemic poster-child of speculative risk-taking. That correlation stands at around 60% year-to-date, versus about 14% for the price of gold, according to Katie Stockton, founder and managing partner of Fairlead Strategies, a research firm focused on technical analysis. It’s “reminding us to categorize Bitcoin and altcoins as risk assets rather than safe havens,” she said. Perhaps unaware what "hodling" means, data from Coinglass shows that more than 342,000 traders had their positions closed over the past 24 hours, with liquidations totaling roughly $1.1 billion. “Digital-currency markets in total have been challenged this month,” said Jonathan Padilla, co-founder of Snickerdoodle Labs, a blockchain company focused on data privacy. “There’s definitely some pain there.” Though liquidations have spiked, the numbers are rather muted when compared to previous declines, according to Noelle Acheson, head of market insights at Genesis Global Trading. Acheson points out that Bitcoin’s one-week skew, which compares the cost of bearish options to bullish ones, spiked to almost 15% on Wednesday compared to an average of about 6% in the past seven days. “This flagged a jump in bearish sentiment, in line with overall market jitters given the current macro uncertainty,” she said. Amid the pain, some of bitcoin's most faithful are professing patience... HODLing #Bitcoin is painful. If you survive the journey, you will truly know what HODL means. — Dan Held (@danheld) January 21, 2022 ... while others are starting to wonder out loud at what point the battering might end. Famed crypto investor and (former?) billionaire Mike Novogratz mused on Twitter that “this will be a year where people realize being an investor is a difficult job.” 2600 $Eth would be the next support. Hoping and thinking it holds. Unfortunately Russel has like 14 percent more to go before it bottoms. Won’t be a straight line down. This will be a year where people realize being an investor is a difficult job. — Mike Novogratz (@novogratz) January 21, 2022 Unfortunately for Novogratz, 2600 did not hold and Eth is now trading below 2,400. Still, many point out that like on all previous occasions when cryptos crashed, they eventually rebounded to new all time highs. At some point, sellers will become exhausted and the market could see some capitulation soon, said Matt Maley, chief market strategist for Miller Tabak + Co. “When that happens, the institutions will come back in in a meaningful way,” he said. “Once the asset class becomes more washed-out, they’ll have a lot more confidence to come back in and buy them. They know that cryptos are not going away, so they’ll have to move back into them before long.” But it's not just central bank tightening fears and liquidation technicals that have depressed cryptos: one can also throw in a relentless news cycle, where just in recent days, regulators from Russia, the U.K., Singapore and Spain all announced interventions that could undermine crypto companies looking to grow in those regions. Meanwhile, the Biden administration is preparing to release an initial government-wide strategy for digital assets as soon as next month and task federal agencies with assessing the risks and opportunities that they pose, Bloomberg reported late on Friday. Testing the resilience and patience of the faithful, so far the sharp drop below the psychological level of $40,000 has failed to serve as an upward inflection point. Crypto proponents say heavy liquidations often serve to cut out the froth in easy-win asset speculation, helping to solidify new bottoms in the market. Ultimately, the real support will come from none other than the Fed, which will soon realize that it is hiking into a slowing economy... Tightening into a slowdown… Déjà vu? pic.twitter.com/pczXzMVSxb — Julien Bittel, CFA (@BittelJulien) January 22, 2022 ... and will be forced to be far more dovish during this week's FOMC meeting, a reversal which should serve to send risk assets sharply higher. “Fear and unease among investors is palpable,” Nexo's Trenchev,said. “If we see a bigger selloff in equities, expect the Fed to verbally intervene to calm nerves and that’s when Bitcoin and other cryptos will bounce.” In other words, the more the Fed tightens - or the more the Fed scares markets into believing it will tighten - the bigger the market selloff, and the worse the economic slowdown, until eventually Powell will be forced to ease, a key point brought up by  Bank of America CIO Michael Hartnett yesterday. Incidentally, it also means that the faster markets crash, the faster the Fed panics, and is forced to stabilize stocks because even if the new and improved Powell Put is well below previous levels, the Fed can't risk a market crash just to appease Biden's demands for an inflationary slowdown so Democrats aren't destroyed in the midterms. And incidentally, this weekend's ongoing selloff in cryptos means that while stocks are currently mercifully not trading, Monday should be another bloodbath, as Jim Bianco reminds us. The BTC/SPX correlation is "significant" Or as @jeffdorsman says, crypto is a 24/7 VIX. See the table, as of this writing, Crypto is down another 10% since Friday's NYSE Close. If this hold, no-coiners have about 36 more hours to gloat before it is their turn. pic.twitter.com/JpWeMJZbAf — Jim Bianco biancoresearch.eth (@biancoresearch) January 22, 2022 One thing is certain: several more 2% drops in the Nasdaq, and Powell - who two years ago crossed the Fed's final rubicon and bought corporate bonds to halt a catastrophic collapse - will be making emergency phone calls to put an end to the carnage. As such, a continuation of the meltdown may just be the best thing that the bitcoin faithful can hope for. Tyler Durden Sat, 01/22/2022 - 13:04.....»»

Category: dealsSource: nytJan 22nd, 2022

Forget a bitcoin winter — a crypto "ice age" might be coming as the Fed ends the easy-money era

Crypto prices have tumbled as bond yields have shot higher. Some investors think they might not recover for a long time. Prices have slumped, raising fears about a crypto winter.FTiare/Getty Images A crypto "ice age" might be coming as the Fed slashes its support for markets and the economy. Crypto prices have slumped, with bitcoin tumbling to a six-month low below $38,000 on Friday. With the Fed hiking interest rates, and nagging questions about regulation and the technology, the outlook could be bleak. Things are getting cold in crypto-land. Bitcoin is down dramatically from its November peak of close to $69,000, falling to a six-month low below $38,000 Friday. Trading volumes have slumped.Some investors are concerned that the market is going into a "crypto winter" — a period when prices fall sharply and fail to recover for more than a year — as the Federal Reserve abruptly tightens monetary policy.But it could be worse than that. Crypto could in fact be heading for an "ice age," where prices stay low for years and many investors lose interest, Paul Jackson, Invesco's global head of asset allocation research, told Insider recently.It's not just Fed policy. Many potential investors have niggling doubts about the robustness of cryptocurrency technology, and regulation that could stifle industry development.The Fed could put crypto in the deep freezeEarly last year, "Bond King" Jeff Gundlach said he thought bitcoin was "the stimulus asset"  boosted the most by the "torrent" of money from the Fed and US government during the coronavirus crisis.But less than a year later, the Fed is turning off its faucet as it tackles soaring inflation. Markets are now expecting four interest rate hikes in 2022.The resultant jump in bond yields has already whacked unprofitable tech stocks and cryptocurrencies. The two speculative assets look a lot less attractive when returns on risk-free bonds are higher.But more pain is likely, as bond yields have considerably further to rise, according to Invesco's Jackson."Central banks and governments have played a role in jacking up these markets, and as those policies reverse, then I think they will have a role in depressing them," he said.Read more: A 21-year veteran trader breaks down an options trade designed to help investors 'sustain risks long enough to see the light of profitability' — and explains why bitcoin could continue to move in tandem with tech stocksEven bulls such as Galaxy Digital founder Mike Novogratz have said crypto is likely to stay under pressure."I think it could be an ice age," Jackson said. "I think if you take away those conditions that have been created by the Fed ... it does change the outlook."Nagging questions about regulation and crypto technologyOf course, many cryptocurrency supporters disagree. Dan Morehead, CEO of investment firm Pantera, said in a note last week the sector should stay strong because the uses for crypto networks have ballooned.He pointed in particular to the growth in decentralized finance, or DeFi, where financial activities such as trading can be carried out without the need for intermediaries, thanks to crypto technology.But many investors are less convinced, with regulation a particular worry. The central bank of Russia, a crypto hub, this week proposed an outright ban of mining and transactions, adding to Friday's sell-off. European regulators could be about to toughen up their rules, and Spain and the UK are cracking down on crypto adverts.James Malcolm, head of foreign-exchange strategy at UBS, told Insider he thinks problems with crypto technology could be one of several factors, alongside stricter regulation, that could drag the crypto world into another winter.Malcolm cited a blog by the founder of the Signal messaging app, which concluded that blockchain technology is clunky and far from decentralized. Meanwhile, users of the ethereum crypto network have been infuriated by congestion and high transaction fees, which are proving very hard to fix."A lot of people in the technology space seem to be questioning whether or not [crypto tech] is that effective," Malcolm said. "It begs the question if it was so blatantly next-generation technology, then why aren't a lot of big tech companies all over it? Why isn't Google massively invested?"Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 22nd, 2022

Another One Bites The Dust

S&P 500 gave up opening gains that could have lasted longer – but the bear is still strong, and didn‘t pause even for a day or two. Defeated during the first hour, the sellers couldn‘t make much progress, and credit markets confirm the grim picture. There is a but, though – quality debt instruments turned […] S&P 500 gave up opening gains that could have lasted longer – but the bear is still strong, and didn‘t pause even for a day or two. Defeated during the first hour, the sellers couldn‘t make much progress, and credit markets confirm the grim picture. There is a but, though – quality debt instruments turned higher, and maintained much of their intraday gains. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Series in PDF Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2021 hedge fund letters, conferences and more And that could be a sign – in spite of the bearish onslaught driving the buyers back to the basement before the closing bell – that more buying would materialize to close this week, with consequences for S&P 500 as well. I would simply have preferred to see rising yields once again, that would be a great catalyst of further stock market selling. Now, the wisest course of action looks to be waiting for the upcoming upswing (one that didn‘t develop during the Asian session really), to get exhausted. Remember my yesterday‘s words: (…) The rising yields are all about betting on a really, really hawkish Fed – just how far are the calls for not 25, but 50bp hike this Mar? Inflation is still resilient (of course) but all it takes is some more hawkish statements that wouldn‘t venture out of the latest narrative line. Anyway, the markets aren‘t drinking the kool-aid – the yield curve continues flattening, which means the bets on Fed‘s misstep are on. True, the tightening moves have been quite finely telegraphed, but the markets didn‘t buy it, and were focused on the Santa Claus (liquidity-facilitated) rally instead – therefore, my Dec 20 warning is on. The clock to adding zero fresh liquidity, and potentially even not rolling over maturing securities (as early as Mar?) is ticking. And the run to commodities goes on, with $85 crude oil not even needing fresh conflict in Eastern Europe – the demand almost at pre-corona levels leaving supply and stockpiles in the dust, is fit for the job. With SPX short profits off the table, crude oil consolidating, and cryptos having second thoughts about the decline continuation, it‘s been precious metals that stole the spotlight yesterday – really great moves across the board to enjoy! Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 buyers are nowhere to be seen – what kind of reflexive rebound would we get next? The odds aren‘t arrayed for it to be reaching very high – yields are catching up even with financials... Credit Markets HYG is likely to pause a little next, and the degree of its move relative to the quality debt instruments, would be telling. Rates are though going to keep rising, so keep looking for a temporary HYG stabilization only. Gold, Silver and Miners Gold and silver keep catching fire, and are slowly breaking out of the unpleasantly long consolidation. The strongly bullish undertones are playing out nicely – these aren‘t yet the true celebrations. Crude Oil Crude oil looks like it could pause a little here – the stellar run (by no means over yet) is attracting selling interest. The buyers are likely to pause for a moment over the next few days. Copper Copper is paring back on the missed opportunity to catch up – the red metal will be dragged higher alongside the other commodities, and isn‘t yet offering signs of true, outperforming strength. Bitcoin and Ethereum Bitcoin and Ethereum really are setting up a little breather, but I‘m not looking for bullish miracles to happen. Still, the buying interest was there yesterday, and that would influence the entry to the coming week (bullishly). Summary S&P 500 upswing turned into a dead cat bounce pretty fast, and while we may see another attempt by the bulls, I think it would be rather short-lived. Think lasting a couple of days only. Not until there is a change in the credit markets, have the stock market bulls snowball‘s chance in hell. Commodities and especially precious metals, are well placed to keep reaping the rewards – just as I had written a week ago. For now, it‘s fun to be riding the short side in S&P 500 judiciously, and the time for another position opening, looks slowly but surely approaching. Let the great profits grow elsewhere in the meantime. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice. Updated on Jan 21, 2022, 1:29 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJan 21st, 2022

Should You Buy Payment Disruptor Stocks In 2022?

There’s a big “threat” looming over one of my favorite groups of stocks. After years of running higher, these stocks reversed course in 2021… Q4 2021 hedge fund letters, conferences and more And are now trading at a steep discount. But while most folks are getting this story completely wrong… I’ll show you why this […] There’s a big “threat” looming over one of my favorite groups of stocks. After years of running higher, these stocks reversed course in 2021… if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2021 hedge fund letters, conferences and more And are now trading at a steep discount. But while most folks are getting this story completely wrong… I’ll show you why this “threat” is presenting a great buying opportunity. Payment Disruptor Stocks Long-time readers know I’ve pounded the table on payments stocks for years… In short, payment disruptors have seized banks’ most profitable businesses one by one, leaving them with scraps. PayPal’s (NASDAQ:PYPL) app lets you buy groceries and bitcoin… receive Social Security... and even pay taxes. Credit card giants Visa (NYSE:V) and Mastercard (NYSE:MA) now handle more digital payments than big banks like JPMorgan. More than 40 million people now use Block’s (NYSE:SQ) Cash App at least once a month. That’s roughly one in eight Americans. In short, payment disruptors have turned Wall Street on its head. And it’s made them among the fastest-growing and best stocks to own from 2016–2020: But 2021 marked a big reversal for payments stocks..​ Visa and Mastercard had one of their worst years in almost a decade. PayPal, Block (formerly Square), and almost every other money disruptor slipped into the red. The Biggest Threats What’s going on with these former stock market darlings? There are a few reasons for payments stocks’ recent struggles. But one of the biggest “threats” can be summed up in four words: “Buy now, pay later.” As the name suggests, buy now, pay later lets you break up purchases into installments. Say you buy a pair of sneakers for $100. Instead of handing over 100 bucks at the cash register, you can pay in four $25 installments over a few weeks. Last year, consumers made $100 billion worth of retail purchases through BNPL companies like Affirm, Klarna, and Afterpay. That’s a huge jump up from $24 billion in 2020. Buy now, pay later is considered a threat to existing payment methods because it’s a closed-loop system. In short, BNPL firms don’t run on top of the existing payment networks that Visa and Mastercard largely own. They’ve crafted a whole new payment network, which cuts credit card firms and other players out of the picture. This closed loop allows BNPL companies to keep all the fees for themselves. The concern is BNPL firms will steal an ever-increasing share of payments for themselves, dampening growth for PayPal, Visa, and other payments stocks. But BNPL is not a real threat… it’s a massive opportunity. As I mentioned, BNPL firms like Klarna and Affirm have created their own payment networks. The thing is… roughly 85% of installment payments are made with debit cards. And guess who issues those cards? Visa and Mastercard. Afterpay, the firm that pioneered BNPL, teamed up with Mastercard for its debit card. Source: Afterpay BNPL is not a threat to these payment giants… it’s an opportunity. Long-time readers know credit card companies earn a small fee each time you swipe your card. When folks choose buy now, pay later, they’re using their card multiple times. This means Mastercard now collects fees on four installments instead of one payment. Affirm’s CFO Michael Linford agrees BNPL is an opportunity for payment networks. He recently said: “You can’t say Visa is a loser here. We ride Visa rails for a meaningful number of our transactions.” BNPL is also a moneymaker for PayPal and Block. PayPal launched its own buy now, pay later option in late 2020. This past quarter it processed $2 billion+ of installment payments. PayPal quietly built a BNPL business that’s 75% the size of Affirm. And back in June, Block acquired Afterpay. Over 100,000 businesses and 16 million customers have used Afterpay. Block now gets to collect all those fees. Closed-Loop Networks Closed-loop networks aren’t a new idea. A few years back, PayPal created a closed-loop network and tried to cut credit card giants like Visa out of the picture. It just had to convince folks not to link their cards to their PayPal accounts… and instead pay using PayPal’s digital wallet. PayPal hid card payment options and put its own wallet front and center. It was a total failure. Today, most PayPal transactions are paid for with debit cards. BNPL firms will suffer the same fate. They need to tap into the five billion or so plastic cards across the world to attract users. But Stephen… what if you’re wrong? What if BNPL firms do succeed in building a closed-loop system? Investment bank Credit Suisse ran the numbers on this potential threat. They looked at what would happen if BNPL accounted for a quarter of all digital payments and these folks chose not to pay with a card. Even in this worst-case scenario, buy now, pay later firms would steal just 2.6% of Visa and Mastercard revenues. That’s nothing for companies that grow sales roughly 15% per year. I mentioned consumers made $100 billion worth of retail purchases last year through BNPL companies. That’s a drop in the ocean compared to the volume payment giants handle. Look at this graph showing how small the buy now, pay later “threat” really is. Billions of dollars might flow through BNPL companies, but payment rails handle trillions of dollars. Even PayPal is on track to process over $1 trillion this year. Don’t be fooled: BNPL isn’t a threat to payments stocks. It’s an opportunity. That’s why I recently made PYPL, MA, and SQ all “buys” in my premium Disruption Investor portfolio. Next week, we’ll dig into another big threat weighing on payments stocks: the US Federal Reserve’s new payment system. The Great Disruptors: 3 Breakthrough Stocks Set to Double Your Money" Get my latest report where I reveal my three favorite stocks that will hand you 100% gains as they disrupt whole industries. Get your free copy here. Article By Stephen McBride, Mauldin Economics Updated on Jan 21, 2022, 3:04 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJan 21st, 2022

Leveraged Trading Is Not The Source Of Recent Crypto Weakness: So What Is?

Leveraged Trading Is Not The Source Of Recent Crypto Weakness: So What Is? By Marcel Kasumovich, One River Asset Management head of research Macro narratives are driving digital asset sentiment, from asset swings to regulatory decisions. This alone speaks to a maturing ecosystem – investors want the macro story. But digital asset volatility has been mostly uncorrelated to other macro markets in the recent past. It is more about a shift in investor behavior. 1/ As digital assets enter the mainstream, market commentary focuses on price. And in a world where exchange rate volatility is near all-time lows, attention has naturally shifted to digital assets where volatility against the US dollar is breathtaking by comparison. The megatrend towards the digitalization of finance will not be defined by the shorter-term gyrations. The innovation happening more behind the scenes will dictate the secular formations. Recent advancements in the Lightning Network illustrate the quiet determination to digitalize finance. 2/ The Lightning Network was proposed in 2015 as a way of scaling smaller payments, able to accommodate billions of transactions in a second (here). It addressed the tiring argument of Bitcoin’s inefficiency head-on. And after a slow start, user adoption surged last year with a 3-fold rise in network capacity (Figure 1). It is also integrating into the regulatory mainstream. This week, Bottlepay, a payment provider built on the Lightning Network, was approved by the UK Financial Conduct Authority. These new technologies can hold up to regulatory standards including anti-money laundering (here). It is a powerful example of technologists and regulators working together to encourage innovation in a complacent legacy system. 3/ Innovation may drive the megatrends, but investors are still left to manage and explain portfolio volatility from digital assets. And just as digital innovation is garnering more institutional attention, so too are the narratives around the volatility of digital assets. Investors are looking for macro thematic narratives, including the sharp downturn since November and the abrupt decline to start the year. Explanations center on the downturn in inflation expectations, the Fed pivot toward faster rate hikes and balance sheet normalization, as well as the decline in growth stocks tied to the rise in real interest rates. The high correlation of bitcoin returns to inflation expectations last year (56%) reinforces a desire to put a tidy macro narrative to the digital ecosystem. 4/ But the analytics tell a different story. We run a simple empirical exercise to evaluate bitcoin returns as explained by three macro factors: market-based inflation expectations (5y5y inflation swaps), the inflation-adjusted terminal policy rate (5y5y overnight interest rate swap less 5y5y inflation swaps), and Nasdaq 100 equity returns. These factors only explain 10-45% of the variation in bitcoin over the past two years and with various representations of the data. More importantly, there is almost no relevance of these factors in explaining the bitcoin downturn since November. Those factors would imply a bitcoin price of 50-60k, much higher than the current price. 5/ What does that mean for investors? Digital assets volatility has been largely independent of macro factors in the recent past. To be sure, the independent volatility that most investors hope for is skewed to the upside. But in assets where volatility expectations have ranged from 55% to 158% in the past two years, there will be plenty of periods where idiosyncratic moves detract from a portfolio. The test for any investor is asking about the structural trends. What tokens will prosper with the digitalization of finance? How broad will token pluralism extend? If the answers to the structural questions are positive, then downside volatility should be met with programmatic rebalancing into digital assets. 6/ Of course, idiosyncratic volatility is not satisfying. It is a polite way of saying we need to dig deeper for an explanation. What is behind the swings in digital assets if the macro narrative falls flat? The hunt for the explanation is partly a process of elimination and partly identifying new patterns of behavior. There are three key elements of the market microstructure of interest. 7/ First, the bitcoin forward yield curve has been stable, indicating leveraged trading is not a source of downside volatility. Figure 2 illustrates the one-month annualized yield implied by bitcoin futures on the Deribit exchange, where leverage is more readily available to traders. A rise in speculative demand leads to higher forward bitcoin prices and higher implied yields (vice versa). In periods of excess leverage, forward prices fall more than spot as speculative traders forced to close positions at unfavorable prices. Last May, one-month yields fell to an annualized –75%, reflecting a costly, steep inversion of the forward curve to speculative long traders. On this downturn, the compression in yields is barely visible. 8/ Second, option markets have decoupled from previous correlations to spot prices, with declining volatility expectations. The one-week implied volatility on Ether is 70%, near the lows of the past year (Figure 3). Ordinarily, declines in spot prices, particularly severe ones, would have seen a surge in volatility expectations. However, volatility is low despite a sharp decline in spot prices. The same pattern is evident in 25-delta put-call volatility skew. The one-week skew in Ether options is only marginally positive, near the average of the past year. This is strongly counter to past downturns in spot prices, where option skew spiked well above 40%! Again, leveraged trading is not the source of the recent price weakness. 9/ Third, a rise in the dispersion of digital asset prices hints at a change in investor behavior. We illustrate this point with a unique parsing of the data based on the last two downturns: May 8, 2021 and Nov 9, 2021. Dispersion is measured by the median difference between the individual returns on the 12 assets of our Core Index and bitcoin returns. When Index asset returns are evenly dispersed around bitcoin returns, the measure is zero. The one-month dispersion in the latest downturn measures near-zero (–0.4%). This is vastly different from May 2021, where the one-month dispersion index measured –9.1%. Index assets exhibited higher beta to the bitcoin downturn. No doubt, two cyclical periods don’t make a trend, but it does call for attention. 10/ Market behavior is bifurcating. It is evident in futures markets, where the decline in yields has been greater in regulated markets (CME) than in unregulated ones (Deribit). It is evident in active supply, where the percentage of longer-term holders has dropped alongside a more-than 20% fall in large-value bitcoin addresses (greater than $10mn). It is evident in the surge of interest in venture applications (here). Investors focused on macro narratives have mattered more than leveraged traders. And it is these ebbs and flows that should remind investors that we are at the very early stages in the digitalization of finance. It is precisely in those imperfect, inefficient early stages where megatrend assets are most additive to a portfolio. Figure 1 – Lightning Network Capacity Surge, Adoption Rising Figure 2 – Bitcoin Futures’ Yield Stable, No Sign of Speculative Excess Figure 3 – Ether Volatility Low Despite Declining Prices Tyler Durden Sun, 01/16/2022 - 22:00.....»»

Category: dealsSource: nytJan 16th, 2022

Rotate to Cyclical Sectors With These Top-Ranked ETFs

As the Federal Reserve turned more hawkish and expectations for interest rates hike rose, investors rotated out of the high-growth technology to cyclical sectors like energy, financials, materials and industrials. Rising yields have gripped Wall Street since the start of 2022, resulting in a sell-off in the tech sector. As the Federal Reserve turned more hawkish and expectations for interest rates hike rose, investors rotated out of the high-growth technology to cyclical sectors like energy, financials, materials and industrials.Investors seeking to tap the current trends could consider the ETFs form the cyclical sectors. While there are many options, Vanguard Energy ETF VDE, iShares U.S. Home Construction ETF ITB, U.S. Global Jets ETF JETS, Materials Select Sector SPDR XLB and SPDR S&P Bank ETF KBE with a Zacks Rank #1 (Strong Buy) or 2 (Buy) seem excellent choices.Why Cyclical?Prices for almost everything, from raw materials to food prices to shipping costs, soared last year at the fastest pace in nearly four decades. This is especially true as the consumer price index jumped 7% year over year in 2021, marking the largest 12-month gain since June 1982. The red-hot inflation has set the stage for the first interest rate hike as soon as in March (read: 5 ETF Plays to Make the Most of Red-Hot Inflation).The 10-year Treasury yield hit a two-year high on bets that the Federal Reserve could raise interest rates as soon as in March. The latest Fed minutes revealed policymakers’ concerns about worsening inflation and early interest rate hikes to combat rising inflation. The policymakers signaled three rate increases this year and three in the following year as inflation concerns deepened. The probabilities of a March interest rate hike of 0.25% surged to 72%, according to fed futures trading contracts.Omicron cases are also surging in the United States, with more than a million new cases in a single-day and hospitalizations hitting new highs.However, a still-improving economy backed by job growth and higher consumer confidence will likely bolster risk-on trade. Increased U.S. consumer confidence, suggests that the economy would continue to expand in 2022. Additionally, President Biden’s administration took steps to eliminate supply-chain bottlenecks, indicating that higher inflation will not last very long. Further, the wider spread of vaccinations, new vaccines as well as solid corporate earnings bode well for the economy. As the cyclical sectors are tied to economic activities, these outperform when economic growth improves.Vanguard Energy ETF (VDE)Vanguard Energy ETF is one of the popular choices in the energy space, having accumulated $6.6 billion in its asset base. It provides exposure to a basket of 104 energy stocks by tracking the MSCI US Investable Market Energy 25/50 Index (read: 5 Energy ETFs Making the Most of Oil Price Surge).Vanguard Energy ETF sees a good volume of about 1.5 million shares and charges 10 bps in annual fees. VDE has a Zacks ETF Rank #2.iShares U.S. Home Construction ETF (ITB)iShares U.S. Home Construction ETF provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index. With AUM of $3 billion, iShares U.S. Home Construction ETF holds a basket of 46 stocks with heavy concentration on the top two firms.iShares U.S. Home Construction ETF charges 41 bps in annual fees and trades in a heavy volume of around 3 million shares a day on average. iShares U.S. Home Construction ETF has a Zacks ETF Rank #2.U.S. Global Jets ETF (JETS)U.S. Global Jets ETF provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. In total, the product holds 51 securities and charges investors 60 bps in annual fees.U.S. Global Jets ETF has gathered $3.5 billion in its asset base while seeing solid trading volume of nearly 12.1 million shares a day. It has a Zacks ETF Rank #2.Materials Select Sector SPDR (XLB)Materials Select Sector SPDR is the most-popular material ETF that follows the Materials Select Sector Index. It manages about $8.6 billion in its asset base and trades in volumes as heavy as around 6 million shares. Materials Select Sector SPDR holds about 28 securities in its basket and charges 12 bps in fees per year from its investors (read: 5 Top-Ranked ETFs to Add to Your Portfolio for 2022).In terms of industrial exposure, chemicals dominates the portfolio with a 68.8% share, while metals & mining, and containers & packaging round off the top three positions. The product has a Zacks ETF Rank #1.SPDR S&P Bank ETF (KBE)SPDR S&P Bank ETF offers equal-weight exposure to 98 banking stocks by tracking the S&P Banks Select Industry Index. Regional banks dominate the portfolio with 74.8% share while thrifts & mortgage finance, diversified banks, other diversified financial services and asset management & custody banks take the remainder.SPDR S&P Bank ETF has amassed $8.6 billion in its asset base while trading in a heavy volume of 2.8 million shares a day, on average. The product charges 35 bps in annual fees. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Materials Select Sector SPDR ETF (XLB): ETF Research Reports iShares U.S. Home Construction ETF (ITB): ETF Research Reports SPDR S&P Bank ETF (KBE): ETF Research Reports Vanguard Energy ETF (VDE): ETF Research Reports U.S. Global Jets ETF (JETS): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

Congress needs to stop day trading, says Senator Mark Warner, a former VC and entrepreneur

Day trading is a conflict of interest and can violate the Stock Act, as members of Congress know what will affect the market before the public. Senator Mark Warner of Virginia.SAUL LOEB/POOL/AFP via Getty Images Big Technology is a newsletter about tech and society by independent journalist Alex Kantrowitz. Virginia Sen. Mark Warner says members of Congress shouldn't be allowed to trade individual stocks. He says doing so is a major conflict of interest as members often know of upcoming events that will affect the market. Mark Warner has a different background than his colleagues in the Senate, one more common in Silicon Valley than Washington's halls. Before Virginians elected him US Senator in 2008, and governor six years before that, Warner was a venture capitalist and entrepreneur. He cofounded Nextel, a wireless company now owned by Sprint, and invested in hundreds of startups. Today, he's worth hundreds of millions of dollars.When I sat down with Sen. Warner this week for Big Technology Podcast, I wanted to learn why his colleagues talked a big game about regulating Big Tech but had done little so far. They risked losing credibility by persistently calling out tech executives and then sitting on their hands. And given Warner's background, he was the perfect person to ask.Our conversation covered familiar territory — techno-optimism, tech illiteracy, and lobbyists — but then turned to stock trading. Members of Congress can trade individual companies' stocks while professing to check their excesses, a stunning conflict of interest that pits their portfolios' prospects against the country's. The practice is commonplace, supported by party leadership, and may influence the legislative process. Warner said it should end."Members ought to restrict themselves from playing in the market," he said. "If you take these jobs of responsibility, you have to be willing to give up something."Warner is part of a broader awakening inside Congress around trading individual stocks, an issue that looms over the federal legislature's push to regulate Big Tech, and its relationship with big business overall. Democratic House Speaker Nancy Pelosi, known as the House's best trader, has long favored members being free to trade. But after years of acceptance, there's finally a movement inside the building to stop this legalized form of corruption. Among stock traders, it's common knowledge that you can't consistently beat the market if you don't have an edge. Firms that do it regularly tend to find themselves in hot water for insider trading, like Steven Cohen's SAC Captial, or on top of a Ponzi scheme, like Bernie Madoff. Then there's Congress. Federally elected legislators are often privy to the details of big-spending packages and potentially catastrophic events, like COVID-19, well before their constituents. They have an edge. They're not supposed to trade on that knowledge but — wink wink — they do. "There were members of Congress day trading from their congressional office, and day trading in large volumes," Brian Baird, a former member of Congress who served from 1999 to 2011, told me. "The idea that, in no way, shape, or form did the knowledge acquired from their public servant role influence their trades — it's just absurd. Human beings don't work that way."Some of the most egregious stock trading in Congress occurred when several Senators dumped large volumes of stock in winter 2020, right after Congress was briefed on the magnitude of the COVID threat. Sen. Kelly Loeffler sold millions in stock. Her fellow Georgia Sen. David Purdue made a windfall by dumping and buying back stock. Sen. Richard Burr offloaded more than $1.6 million in stock ahead of the market crash (and then made a suspicious call to his brother-in-law, who promptly called a broker). Loeffler and Purdue lost their races, the Department of Justice investigated Burr, and the public became more attuned to their representatives' trading habits.Loeffler, Purdue, and Burr disclosed their investments in compliance with the Stock Act, a law Baird originally introduced in 2006, which requires timely disclosure of trades by federal representatives. The law didn't prevent members of Congress and the Senate from trading individual stocks — that seemed too aggressive at the time — but it ensured the public would learn about their behavior. In that regard, it worked. Nobody's missing it now."The ability to trade, and particularly on a day trade basis, even if you're not doing anything wrong, it looks bad," said Sen. Warner. He said he keeps his investments in a trust that doesn't buy individual stocks. Today, momentum is building to finish the job Baird started. Democratic Sen. Jon Ossoff, who replaced Purdue in the Senate, introduced legislation this week along with Sen. Mark Kelly to ban members of Congress and their families from trading stocks. The bill would force them to put their assets in blind trusts. And if they violated the law, they'd be fined their entire salaries. Republican Sen. Josh Hawley, after failing to unite with Ossoff, introduced his own stock trade ban for members of Congress. Bridging the gap between parties won't be easy, but the bipartisan interest is a radical change from just a few years ago, where such bans were inconceivable. Nancy Pelosi's argument for allowing stock trading is that federal representatives should not be restricted from participating in the economy. "We are a free-market economy," she said in December. "They should be able to participate in that."But as Pelosi's colleagues consider regulating the tech giants, her family's been trading their stocks. Last July, her husband Paul Pelosi made $5.3 million by exercising call options to buy shares of Alphabet. His transactions took place just a week before the House Judiciary Committee advanced its slew of antitrust bills aimed at Big Tech. The market didn't think much of the bills, sending Alphabet's stock up, and Pelosi cashed in."The speaker has no involvement or prior knowledge of these transactions," Pelosi spokesperson Drew Hammill said at the time.Congress can participate in a free market economy without this apparent conflict of interest. Putting their assets in blind trusts, as Ossoff proposed, would solve the problem while allowing them to participate in the market. Even limiting federal representatives to broad index funds would help.The S&P 500 returned nearly 27% in 2021, for instance, a fine result for anyone. Restricting members to more general funds could give them the market's upside, help them focus on the entire economy, and remove the temptation for impropriety. As he leaned back in his chair in his Washington DC office, Sen. Warner, a seasoned investor, brought the point home. "The stock pickers, you look at their averages against the actual returns of the market over the last five or 10 years, and time and again picking a market-based fund is both cheaper and probably has a better return." And that is exactly why Congress should limit itself to that option, unless it has something to hide. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 14th, 2022

Take Advantage Of Elevated Volatility With Covered Call Options

High volume selling since early-November has been driven up volatility premiums on options across the equity market, generating rich Theta-catching opportunities It's once again time to start thinking about covered calls as monetary uncertainty in the face of unending COVID-fueled inflation induces a market pullback. The high volume selling (specifically in high-growth equities) we've seen since before Thanksgiving has been driven up implied volatility (IV) on options across the equity market, presenting us with generous Theta-catching opportunity.Covered calls will allow you to capture returns on stocks you already own or buy new shares of enterprises you've waiting to acquire at a discount.What's A Covered Call? Implementing a covered call strategy involves selling out-of-the-money call options on a stock that you own or want to purchase and collecting the premium that each call option yields you. This means that you are effectively sell-short the options contract.Your P&L on this option play would be inverse to the call's premium because you are effectively short in the derivatives market once you enter the trade. However, the underlying shares that you own protect you from any losses (aka covered call), making these trades risk-free (if you don't account for opportunity loss if the underlying stock soars above your strike).When executing a play like this, you must remember that each option contract represents 100 shares. Meaning you should only write (or sell) call contracts for each block of 100 shares that you own or would like to own.The Greeks To Focus OnTheta represents the time-value depreciation of an option's premium each day under the assumption the underlying security does not move. Theta can be seen as the daily return on a covered call option.It represents the expected daily returns of a covered call, assuming that the strike price is not reached prior to expirations. Theta (quoted as a negative figure) and implied volatility are directly correlated on an absolute value basis (aka disregarding -/+ signs).Theta and Vega, an option's sensitivity to implied volatility, are the most meaningful metrics to focus on when implementing a covered call strategy. As an option seller, we want Theta (expected daily returns) to be high on an absolute basis, while Vega (volatility risk) remains low.When assessing opportunities for covered calls, I'm looking for options with an IV of 50% or higher in combination with a Theta to Vega ratio that exceeds 0.25. The higher the Theta Vega ratio, the better the risk/reward outlay for option sellers (no matter what your strategy).Risk Of Writing Uncovered CallSelling call options is extraordinarily dangerous if you don't own the underly security because your downside is unlimited (similar to short selling a stock except leveraged due to the nature of options nature).To help you conceptualize this, imagine you sold a 1-Year out Alphabet (GOOGL) call in September 2020 for a September 2021 monthly contract (Sept 17th Exp.) at a $2,500 strike for a quoted $20 per share premium, with zero shares held.Now, most people in their right mind would think that there is absolutely no way that GOOGL, trading at $1,450 at the time, would be able to rally over 72% in the next year. Perceptively it was a 'low-risk trade,' despite not owning the $145,000 worth of stock needed to make this trade truly risk-free (100 shares).This trade would have provided an immediate credit of $2,000 ($20 quoted per share premium x 100 shares = $2,000), but as GOOGL rallied, your position would have quickly turned against you. Since you are short the call, every dollar the premium moves up is a dollar against your position as you would have to repurchase the call at market value to flatten your trade.Let's say you held on to this until it expired, assuming you didn't have the required shares on hand, you not only would have lost the entire $2,000 premium that you were credited a year prior but would now have to pay the difference between the $2,500 strike and $2,816 spot price of the stock. This would have run you $31,600, (($2,816 – $2,500) x 100 = $31,600).This trade risked an endless amount of capital for a measly upside of $2,000. Your brokerage account would have almost certainly sent you a risk alert or a margin call before you were able to lose this much (likely requiring $50k in liquidity), but this exemplifies the outsized risks involved in selling an uncovered call option.Now let's say you did own the necessary underlying shares when you sold the 1-year call on GOOGL (covered call). The trade would have yielded you the initial $2,000 credit, and you would have been making money on the underlying shares all the way up to $2,500. The transaction would have returned you ($2,500 - $1,450) x 100 + $2,000= $107,000 or a 74% profit.Since you owned the underlying shares, you still wanted the stock to go up, and the predetermined strike price you initially sold the call at was merely your exit price.How To Take Advantage FUD-fueled (fear, uncertainty, & doubt) market selloffs like these are the best times to execute a covered call strategy because the short-term surge in volatility causes the premium of these options to spike (seen as an increase in Theta on an absolute value basis). The higher the implied volatility (IV), the more uncertain the stock's future price is, which is reflected as an increase in the option's value. This allows you to capture a larger credit on the calls you would like to write.Remember only to sell calls that are tolerably out-of-the-money (above the market price of underlying shares) to ensure that you capture both the option credit and any potential upside in the share price if the stock does end up rallying to your strike price before expiration.There are a couple of crucial judgments you need to make when trading covered calls: what price you are willing to sell your stock at and whether you believe the market's volatility?If I write longer-term covered calls (6 to 18 months till exp.), I typically choose a strike price that I have predetermined as my price target (where I am willing to let go of the stock). If I'm selling a short-term covered call (1 week to 3 months till exp.) I can take advantage of near-term volatility, with the flexibility to roll the calls over each time the prior one expires if the volatility sustains (similar to a high-yielding fixed-income security).Buy-In StrategyIf you are looking to add equities to your portfolio with a size of 100 shares or more, it may be prudent to sell a call option simultaneously. Growth-oriented tech stocks are what I am focused on because of this cohort's significant valuation compression in recent months (50%+ declines in some cases) and the volatile premium on these already naturally high IV names is creating Theta-rich environment for generous returns on cover-call options.Stocks I'm looking to add are positioned for the next generation economy like AI-power customer service automator Twilio TWLO, best-in-class cybersecurity platform CrowdStrike CRWD, and real-time machine data management powerhouse Splunk SPLK. These stocks have long-term winners but are experiencing significant short-term uncertainty in the face of an increasingly hawkish Fed and broader market pressures from the latest COVID-variant (Omicron).These nascent tech enterprises hold a leadership position in their niche operating segments and have a compelling growth narrative that shouldn't be ignored. They will undoubtedly play a vital role in the commencing 4th Industrial Revolution, which is already rapidly digitalizing our global economy.Take a look at your portfolio and examine stocks where you hold a 100+ share position (1 call per 100 share block), with the highest IVs to capture the most Theta. This call selling tactic will not make you rich quick, but it is a savvy way to capture returns in a down-trending market.Make sure you are willing to exit these covered call positions at the strike price you chose. I am looking to sell March 18th expiring calls (the most liquid short-term monthly contracts), which will allow me catch volatility in this pivotal Q4 earnings season and provide the ability to roll these calls over if FUD continues to plague the market.I remain bullish as we enter the first earnings season of 2022 and am buying this dip in public equities.Happy Trading!Dan LaboeEquity Strategist & Editor of The Headline Trader Portfolio Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Splunk Inc. (SPLK): Free Stock Analysis Report Twilio Inc. (TWLO): Free Stock Analysis Report CrowdStrike (CRWD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

Ride on Rising P/E Investing With These 5 Top-Ranked Stocks

Want to try an out-of-the-box approach? Tap five stocks with increasing P/E ratios. Generally, investors love stocks with a low price-to-earnings (P/E) ratio. The perception is that the lower the P/E, the higher will be the value of the stock. The simple logic that a stock’s current market price does not justify (is not equivalent to) its higher earnings and therefore has room to run is behind investors’ inclination toward low P/E stocks.But stocks with a rising P/E can be equally worth buying. RentACenter RCII,U.S. Physical Therapy USPH,Cellectar Biosciences CLRB, Toro TTC and Zymeworks ZYME are examples of such stocks.Why Rising P/E a Valuable Tool?Investors should note that stock price moves in tandem with earnings performance. If earnings come in stronger, the price of a stock shoots up. Solid quarterly earnings and the forward guidance boost earnings forecasts, leading to stronger demand for the stock and an uptrend in its price.So, if the price is rising steadily, it means that investors are assured of the stock’s fundamental strength and expect some strong positives out of it. Suppose an investor wants to buy a stock with a P/E ratio of 30, it means that he is willing to shell out $30 for only $1 worth of earnings. This is because the investor expects earnings of the company to rise at a faster pace in the future on the back of strong fundamentals.Also, studies have revealed that stocks have seen their P/E ratios jump over 100% from their breakout point in the cycle. So, if you can pick stocks early in their breakout cycle, you can end up seeing considerable gains.The Winning StrategyIn order to shortlist stocks that are exhibiting an increasing P/E, we chose the following as our primary screening parameters.EPS growth estimate for the current year is greater than or equal to last year’s actual growthPercentage change in last year EPS should be greater than or equal to zero(These two criteria point to flat earnings or a growth trend over the years.)Percentage change in price over four weeks greater than the percentage change in price over 12 weeksPercentage change in price over 12 weeks greater than percentage change in price over 24 weeks(These two criteria show that price of the stock is increasing consistently over the said timeframes.)Percentage price change for four weeks relative to the S&P 500 greater than the percentage price change for 12 weeks relative to the S&P 500Percentage price change for 12 weeks relative to the S&P 500 greater than the percentage price change for 24 weeks relative to the S&P 500(Here, the case for consistent price gains gets even stronger as it displays percentage price changes relative to the S&P 500.)Percentage price change for 12 weeks is 20% higher than or equal to the percentage price change for 24 weeks, but it should not exceed 100%(A 20% increase in the price of a stock from the breakout point gives cues of an impending uptrend. But a jump of over 100% indicates that there is limited scope for further upside and that the stock might be due for a reversal.)In addition, we place a few other criteria that lead us to some likely outperformers.Zacks Rank equals to 1: Only companies with a Zacks Rank #1 (Strong Buy) can get through.Average 20-day Volume greater than or equal to 50,000: High trading volume implies that the stocks have adequate liquidity.Just these few criteria narrowed down the universe from over 7,700 stocks to just 59.Here are five out of the 59 stocks:RentACenter (RCII): The Zacks Rank #2 company is the largest rent-to-own operator in the United States, offering durable goods such as consumer electronics, appliances, computers, furniture and accessories. You can see the complete list of today’s Zacks #1 Rank stocks here.The past four-quarter average earnings surprise of RCII is 10.09%. RCII has a top VGM (Value-Growth-Momentum) score of A.U.S. Physical Therapy (USPH): This Zacks Rank #2 company is the largest publicly-traded, pure-play operator of outpatient physical and occupational therapy clinics.The past four-quarter average earnings surprise of USPH is 20.95%. U.S. Physical Therapy has a top VGM Score of A.Cellectar Biosciences (CLRB): This Zacks Rank #2 company is developing agents to detect, treat and monitor a broad spectrum of cancers.The past four-quarter average earnings surprise of CLRB is 4.50%.Toro (TTC):This Zacks Rank #2 company is a leading worldwide provider of innovative solutions for the outdoor environment, including turf, snow and ground engaging equipment, and irrigation and outdoor lighting solutions.The past four-quarter average earnings surprise of TTC is 10.27%. Toro has a good VGM Score of B.Zymeworks (ZYME): This Zacks Rank #2 clinical-stage biopharmaceutical company engages in the discovery, development and commercialization of bio-therapeutics for the treatment of cancer in Canada.The past four-quarter average earnings surprise of ZYME is 6.01%.  You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.Click here to sign up for a free trial to the Research Wizard today.Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RentACenter, Inc. (RCII): Free Stock Analysis Report Toro Company The (TTC): Free Stock Analysis Report U.S. Physical Therapy, Inc. (USPH): Free Stock Analysis Report Cellectar Biosciences, Inc. (CLRB): Free Stock Analysis Report Zymeworks Inc. (ZYME): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksJan 14th, 2022

Nomura Fears "Fatigued" Bond Bears Face Imminent Squeeze As The Fed Is "Generally Priced-In"

Nomura Fears "Fatigued" Bond Bears Face Imminent Squeeze As The Fed Is "Generally Priced-In" The "bearish US Rates / USTs" trade is locally feeling quite "fatigued" and Nomura's Charlie McElligott warns that the extreme-positioned market is susceptible to further monetization from the payers/shorts. Source: Bloomberg Specifically, McElligott warns 'bears' that we'd need to see fresh +++ data surprises to see the market able to price-in additional hawkish tightening at this juncture - or a stickier (and more dangerous) scenario being the much-discussed  "Wage/Price-Spiral" kicking-off. Source: Bloomberg The Nomura strategist confirms this view even as more Fed speakers (now Daly and Harker) join the ranks of officials signaling March liftoff, and most communicating comfort with 3-4 hikes this year. A quick glimpse at the STIRs shows the last few days have seen March rate-hike odds hit a new cycle-high but the Dec 2022 expectations are fading very modestly (and are below the prevoious peak earlier in the week)... Source: Bloomberg "Think about it," says McElligott, in the past week, we have seen: 1) the Fed Minutes (and speakers thereafter) confirm Balance Sheet run-off beginning mid-year and alongside simultaneous hikes; 2) US Unemployment dipping below 4%; and 3) US CPI YoY at 7% Yet, EDM3 (June ’23 Eurodollar) is unchanged week-to-date and TY has RALLIED, which is telling us that the Fed, at this juncture, is generally “priced-in." Furthermore, the chief strategist notes with the near-certainty too that “the longer the trade sits and stops working,” that Shorts / downside trades in UST futs and ED$ will be incentivized to "profit-take," as the following table shows, CTAs are 'all-in' short... Specifically, McElligott points out the following key levels to watch in rates/bonds.. ED4, currently -100.0% short, [99.395], buying over 99.52 (+0.12) to get to -83%, more buying over 99.53 (+0.14) to get to -66% , flip to long over 99.55 (+0.16), max long over 99.56 (+0.17) JPY_10Y, currently -100.0% short, [151.05], buying over 151.21 (+0.16) to get to -83%, more buying over 151.22 (+0.17) to get to -66%, flip to long over 151.34 (+0.29), max long over 152.27 (+1.22) GBP_10Y, currently -66.1% short, [123.35], more selling under 123.8 (+0.45) to get to -83%, max short under 123.79 (+0.44), buying over 126.6 (+3.25) to get to -62% , more buying over 126.61 (+3.26) to get to -57% , flip to long over 130.4 (+7.05), max long over 130.41 (+7.06) EUR_10Y, currently -100.0% short, [170.22], buying over 170.86 (+0.64) to get to -83%, more buying over 170.87 (+0.65) to get to -66% , flip to long over 175.67 (+5.45), max long over 175.68 (+5.46) USD_10Y, currently -100.0% short, [128.578125], buying over 130.45 (+1.87) to get to -83%, more buying over 130.46 (+1.88) to get to - 66% , flip to long over 133.2 (+4.62), max long over 133.21 (+4.63) And if rates reverse lower, that will lift some of the feet on the throat of 'long-duration', hyper-growth stocks, which are trading at the range lows in Nomura's Tech Sentiment Index... And while we have seen US Equities Indices kinda "stall-out" here in the absence of Tech leadership, due to the recent "Secular Growth" revaluation shock over the past month or so, but, in recent days, Nomura notes that there has been a transition from Equities folks being “concerned about downside risk” to now, a more front-footed one, even somewhat more “offensive” dynamic playing-out yday a few different ways: Sellers of IWM “crashy” downside (Jan 198P sold 20k, Jan 200P sold 26k, Jan 195P sold 77k!) VIX Jan20C sold 30k to close (1mm in Vega, 25k in vVol), while separately seeing a client buyer of Feb 21P Overall US Equities Options market yday saw $13.5B of Call premium trade vs $7.5B of Put premium More broadly, Nomura is also seeing this “pivot from left to right tail” focus in SPX Jan Skew, where so far YTD, the dynamic is clearly “downside offered, upside bid”: So McElligott concludes there is then scope for a constructive scenario which could play out for Large Cap US Tech Equities—and with it, help lift broad US Eq Index—from the recent malaise: Macro-wise, the aforementioned “fatigue” being seen in the “bearish Rates” trade on hawkish Fed being “priced-to-perfection” at this point—which means US Treasury Yields now may be able to consolidate and help pause pain from the “(cheap) Value / (expensive) Growth” rotation bleed, ESPECIALLY as you see Tech / NDX / SPX rally here on this morning’s PPI marginal “disappointment” vs heady expectations Locally as noted, Dealers are now back in “stable regime” of “+ Gamma vs spot” territory in QQQ options (flip line down at 386.50), while Delta is pushing ever-nearer to “neutral” up at 390.07 in QQQs, with almost +$17B of $Delta picked-up in recent days off the lows Tech positioning locally  is much cleaner now, as per flows and PB data—hence the prior Vol metric “extremes” in QQQ options are coming off the boil (Skew, Put Skew, Term Structure) Also, from a much longer-horizon—but the “pull forward” of this potential catalyst can matter in the shorter-term…US Mega / Large Cap Tech historically derive a substantial portion of their Revenues from overseas—where currently, we see Nasdaq 100 @ ~40% of all Revs from outside US; so this “Weaker USD” trade which is brewing can help act as a tailwind for the largest Tech players, particularly under the guise that R.O.W. growth can also begin to pick-up again The net of all this, as SpotGamma notes, is that we have a fairly defined upside range, capped by 4800 for the next week. As long as the S&P500 holds >4700 its likely gamma builds around current prices, and this leads to a pin in the ~4750 area. Currently SpotGamma's EquityHub snapshot shows a gamma “node” at 4670. The indication here is that if the S&P breaks 4700 it could lead to a quick test of 4670, then we see hedging flows changing which could lead to support at the 4670 line. This pinning leads to a decline in realized volatility, which should drag implied volatility. This adds some supportive flow to market prices. Tyler Durden Thu, 01/13/2022 - 12:51.....»»

Category: dealsSource: nytJan 13th, 2022

SMART Global (SGH): The Next-Gen Options Trade You Don"t Want To Miss

SGH is roaring out of the shadows with an ambitious growth strategy that won't remain under the investors' radars for much longer SMART Global Holdings SGH is the under-the-radar semiconductor stock you've been looking for, with its broadening portfolio of cutting-edge chips that are poised to take flight in this commencing technological Renaissance.SGH is roaring out of the shadows with an ambitious growth strategy that won't remain under the investors' radars for much longer. New CEO Mark Adams is transforming this once complacent memory-focused legacy tech business into a motivated leader in niche innovations.The company released a record quarterly report at the start of 2022, blowing analysts' estimates out of the water and raising forward guidance. However, SGH's undiscovered attributes appear to have both positive and negative consequences, which we saw in its (unwarranted) post-earnings capitulation. This drop-off is a technical retreat catalyzed by the overbought RSI levels it had reached in recent weeks after an over 100% 52-week run into this year opening earnings report (confusion about the upcoming stock split may also be playing a role).The good news is that it presents us with an excellent trading opportunity as the stock picks up support at its 50-day moving average (which you can see below).Image Source: TradingViewSMART Global shares' exceedingly thin trading volumes (low liquidity due to its under-the-radar quality) allowed a small group of controlling institutional shareholders to direct its post-earnings narrative. They pulled profits from this recent winner (up 70% since mid-October), and the downward momentum catalyzed a fear-fueled domino sell-off.The TradeDon't let these big-shot Wall Street firms scare you away from this clear-cut winner. SGH's post-earnings capitulation is extraordinarily overdone and with the recent shareholder shuffle.Silver Lake, a nearly $100 billion tech-focus private equity fund, had been the primary shareholders of SGH since it went public in 2017 until this past fall when the global investment group completely exited the trade (with public returns of nearly 400% in just a few years), leaving $10s of millions in stock value up for grabs.SMART Global's ownership has since been erratic, with most of the investing world still unaware of this small-cap stock's existence. SGH's ownership is almost entirely institutional at this point, and with the already thin volumes, its vulnerability to short-term price manipulation is high.Nevertheless, those analysts covering SGH are more bullish than ever after its most recent quarterly release. SGH is lining up perfectly for an ideal options trade as it capitulates out of overbought RSI territory, and these fear-induced publicly-traded contracts maintain a muted implied volatility (meaning relatively cheap calls).I am looking at SGH March 18 $70 calls between $1.50 and $2.00 a contract. $75 is my short-term target price for SGH as today's elevated volumes, coupled with an early February stock split, bring a new slate of investors to the table. I'm projecting 200% to 300% returns on this trade but will begin pulling profits on my options once SGH breaks above $68 (Fibonacci retracement derived price target).The Earnings ReportSMART Global (SGH) reported its November quarter results (fiscal Q1 2022) after the closing bell Tuesday afternoon (1/4), beating analysts' estimates and raising guidance, yet SGH fell off a cliff. SMART Global achieved record revenues and margins that flowed down to an incredible 177% increase in per-share profits, with its top-of-the-line intelligence platforms (AI, HPC, & other cloud-functionality) being this next-generation innovator's primary growth driver.SGH was down as much as 18% in its post-earnings price action, but I remain unconvinced that it will stay below $70 a share for long. This knee-jerk sell-off reaction resulted from its small market cap (less than $1.5 billion), concentrated ownership, and overbought RSI levels, which SGH had floated up into following its sizable 25% end-of-year rally.SGH also announced that it would be initiating a 2-for-1 stock split, which would go into effect at the beginning of February. This is a clear signal from SMART Global's new CEO, Mark Adams, whose savvy ambition for innovative growth is the primary reason we are in SGH, that this stock is headed much higher. Either way, I'm more bullish on SGH post-earnings than ever before.The TransformationNow is the time to add this hidden gem to your portfolio before the broader investing world catches wind of this discounted chip winner.SMART Global has been around since the late 80s, but it wasn't until Mark Adams took the helm amid the pandemic last year that this chipmaker's upside potential went through the roof. Adams is transforming this once complacent memory-focused legacy tech company into an energized visionary.Adams was the leading force behind SGH's quick strategic acquisition of Cree's niche LED chip business at the peak of pandemic fear for a steal at $300 million. Cree LED's synergies are already paying dividends as it drives margin expansion, improves the firm's capital & operational efficiency, and provides critical industry relationships.Smart Global's new forward-thinking chief has already vastly improved its operational performance and is ramping up R&D spending to ensure that the enterprise remains ahead of the innovative curve.Analysts are getting increasingly bullish on this under-the-radar transformation play as SGH flips the switch on accelerating profitable growth, knocking estimates out of the park by an expanding percentage over the past 3 quarters. Zacks Consensus EPS Estimates for SGH's have been soaring across all time horizons after this most recent quarterly report driving the stock into a Zacks Rank #2 (Buy), and all 6 covering analysts agree on a buy rating for the unique value opportunity here.The BusinessSMART Global Holdings had been a reliable pure-play memory leader in the chip space for over 30 years before deciding to broaden its product portfolio, which appeared to be catalyzed by activist investors following SGH's 2017 IPO. The company has since executed 4 strategic acquisitions.Penguin Computing was SGH's first vital acquisition ($85 million price tag) back in 2018, adding a broad portfolio of leading next-generation products, including high-performance computing (HPC), cloud computing, hyperscale data centers, and the development of artificial intelligence (AI). This segment has exploded since its acquisition as its AI-focused products experience budding demand. In the summer of 2019, this resourceful chip giant acquired Artesyn Embedded Computing and Inforce Computing for $80 million and $12 million, respectively. Artesyn (which is now called Smart Embedded Computing) provides critical data center architecture used in "industries such as telecom, military and aerospace, medical, and diverse automation and industrial markets," according to its website.SMART Wireless Computing (formerly known as Inforce Computing) exposes the enterprise to cutting-edge technologies like "medical imaging, collaboration/videoconferencing, wearable hands-free computing, and robotics/unmanned aerial vehicles," according to its investor relations page.SMART's diverse set of growing end-market demands provides the company with an enormous total addressable market (TAM), significant upside potential, and not to mention an excellent hedge against the cyclical nature of the semiconductor market.Image Source: SGH IRThe 11x forward P/E that SGH is currently trading at is a remarkably underappreciated valuation multiple for a high-growth tech business that is expected to exhibit consistent 20%+ earnings growth in the years to come.Final ThoughtsWith its fresh innovation-oriented operational outlay, Mark Adams at the helm (with a now proven track record of skilled management), and an industry-wide outlook of accelerating growth, the future SGH has never been brighter. I would recommend that you purchase some shares for a long-term hold along with these monthly March calls in SMART Global before its takes flight. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SMART Global Holdings, Inc. (SGH): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksJan 5th, 2022

Nancy Pelosi"s husband bought call options in these 5 stocks as 2021 came to a close

Pelosi's stock moves are widely followed by investors who seek to replicate the often-seen success of trades made by lawmakers and their relatives. Spencer Platt/Getty ImagesNancy Pelosi's husband bought up to $3.5 million worth of call options in various stocks last month.Paul Pelosi placed the bullish bets on well known stocks, including Alphabet, Roblox, and Disney.Pelosi's trades have garnered a lot of attention given his relationship to the Speaker of the House.Sign up here for our daily newsletter, 10 Things Before the Opening Bell.Paul Pelosi, investment manager and the husband of House Speaker Nancy Pelosi, purchased up to $3.5 million worth of call options in mega-cap stocks late last year, according to a financial disclosure form filed last week.His biggest purchase was up to $1.5 million worth of call options in Salesforce on December 20, according to the disclosure. Specifically, he purchased 130 call options with a strike price of $210 and an expiration date of January 20, 2023. The in-the-money call option purchase is a bet that shares of Salesforce will remain well above the $210 level by early 2023, and gives Pelosi the right to purchase 13,000 shares at that price, if the options are executed. Salesforce stock traded down 6% to $233.62 in Wednesday's trading session.Additional purchases include 50 call options in Disney, 100 call options in Roblox, 100 call options in Micron Technology, and 10 call options in Alphabet.The long-dated in-the-money call options give Pelosi leverage to the potential upside moves in the mega-cap stocks. The trades could be a bet on a continued regime of low interest rates or on the fundamental outlook of the companies themselves. But a recent spike in interest rates has hurt the fast-growing tech stocks that did so well amid the COVID-19 pandemic.This isn't the first time Pelosi has made high-profile purchases in tech giants. In the middle of 2021, Pelosi purchased $4.8 million worth of Alphabet, up to $1 million worth of call options in Amazon, along with up to $250,000 in call options on Apple. Such moves are widely followed by investors who seek to replicate the often-seen success of stock trades made by Congress members and their families. In fact, one site, CongressTrading.com, has built a community on investors focused on discussing lawmakers' stock trades. Pelosi's latest trades came just days after Nancy Pelosi rejected the idea of banning Congress members from trading stocks, following an Insider investigation that found dozens of federal lawmakers and at least 182 top congressional staffers are violating a federal conflict-of-interest law known as the STOCK Act."We are a free-market economy. They should be able to participate in that," she said. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 5th, 2022

What"s Behind The Surge In Yields That Sent Tech Stocks Tumbling, And What Happens Next

What's Behind The Surge In Yields That Sent Tech Stocks Tumbling, And What Happens Next For a while it appeared that stocks, and especially giga-techs, were willing to ignore the plungefest in Treasuries and were riding the wave of new capital (some $125 billion according to Goldman) allocated to stocks of all stripes to start the new year. However, it wasn't meant to last, and with yields suffering their biggest 2-day surge since the chaos in March 2020... ... high-duration names, which just happen to be the market's all-important generals, are finally sliding which in a market with as little breadth as this one... ... is a very big problem because as Goldman warned a few weeks ago, a crack in the largest market leaders (the FAAMGs of course) could result in major pain: for those who forgot, the five most popular tech names - AAPL, MSFT, NVDA, TSLA, GOOGL - have contributed 51% of S&P 500 returns since April. And what goes up can just as easily go down if rates rise high - and fast - enough. Which brings us to the big question: what's behind the puke in Treasuries and will it persist? From 30,000 feet, the catalyst for the selling in Treasuries is hardly a surprise: the Fed is all hawked up and with the accelerated taper, rate hikes are scheduled to take place potentially as soon as April, with some speculating that the Fed may hike more than 25bps at a time (we seriously doubt it absent inflation truly spiraling out of control in the coming weeks). More likely, however, the recent yield spike is tactical (flow/positioning/liquidity-driven), and so we go to one of the most fastidious market tacticians, Nomura's Charlie McElligott who in his morning notes today does a post-mortem of the selloff that started yesterday and has continued for much of Tuesday. According to Charlie, the selloff in US Rates and Treasuries turned violent by the US midday on the first day of the new PNL year as bearish bets were re-engaged (with UST 10Y Yields now cleanly through 50, 100 and 200 DMA’s to the upside, while 30Y Yields are nearing a test of the 200 DMA themselves), and shares the following thesis checklist as a list of the drivers behind the move: Inflation “stuck” and currently unrelenting at multi-decade highs, with more Omicron supply-chain snarls further squeezing prices Still above multi-year trend growth in US (Atlanta Fed GDPNow @ 7.641% last) US Employment pushing “near full” again (4.2% U-Rate back to levels last seen pre-COVID) Imminent (obvious) Fed tapering commencement, but now, with actual balance-sheet runoff (QT) potential thereafter in UST and MBS being socialized by some Fed members, all of which would mean the need for actual (gasp) price-discovery for “private side” buyers--including convexity hedgers in Mortgages. Translation: we may very soon discover what the true yield of TSYs should be. Start-of-year resumption of heavy Corp debt issuance calendar @ ~ $11.25B of paper (Street expectations of ~$140B for the full-month of January), with a particularly duration-heavy (> 10 years) WAM seen in yesterday’s paper (note: more of the same today, with another 7 deals early, mostly Financials) Last but not least, we have seen the shift to the market not just pricing-in 3 full FOMC hikes this year, but pulling the liftoff forward almost every day, with the March meeting now ~ 72% “priced” These key drivers behind persistent Treasury weakness were not lost on the market, and as Charlie writes, there was lumpy Duration selling in both Cash and Futs on Monday (especially a notable late-day WN block seller ~ $1.1mm in DV01), which was matched by "particularly aggressive options flows", including what McElligott calls "an eye-wateringly ENORMOUS buyer of TY downside, where HUGE prem was spent on 71k of the TYH2 127 Puts (~1.95% yield target by mid-Feb exp) at nearly ~$5.5mm bp dv01" (here he notes that this was an ADD to a view, with OI on Dec 31st at 161k, but now 231k as of Jan 3rd). The move has led to Treasuries posting their worst start to the year since 2009, sending ripples through markets from Australia to the U.K. Adding to this, and in agreement with point 1 above, Bloomberg adds that Treasury traders "are betting the rapid spread of the omicron variant will increase inflationary pressures in the U.S. economy, rather than weaken them." Specifically, the article looks at 10-year breakeven rates which climbed to as high as 2.66% on Tuesday, the most since November, and up from as low as 2.36% on Dec. 14. Even real rates jumped from as low as -1.13% at the end of 2021 to -0.96% today. “Inflation continues to be the major theme of the market given life with the coronavirus,” said Makoto Noji, chief currency and foreign bond strategist at SMBC Nikko Securities Inc. in Tokyo. There is speculation that “the widening spread of the virus will lead to a decline in labor participation and supply constraints,” he wrote in a research note. So how has this rate puke impacted stocks? Well, as McElligott continues, yesterday there was an outright “Momentum Shock” in the US Equities factor space, with the “Long-Term Momentum” factor absolutely "rekt" -3.5%, a 1d -3.1 std dev move over the past 1Y window and the largest drawdown in the factor since the peak of the meme stock / HF unwind on 1/27/21! Furthermore, the Nomura quant writes that the rally/short-squeeze in “Low Quality/High Vol” stocks seen yesterday - i.e. “Leverage” and “Short Interest” factors booming - was a stark contrast to the recent theme of the grab into “Quality” (high over low), “Size” (large over small), “Low Risk” (over high vol). Putting this together, this end-of-’21 “up in Quality” dynamic noted above was a large part of the blow-up in “Unprofitable Tech/Highly Speculatives” trade seen since the start of Nov ’21 into year-end (as the “short” leg of the trade), but yesterday, all of that “high spec” stuff really squeezed higher again, according to McElligott, as it looks like short books were de-grossed in a major way, while some too simply were taking discretionary punts on “high beta” to play for the January effect raising all boats, but particularly in the stuff which has just been the most beaten-down and ripe for O/P. Of course, this “Momentum shock” reversal (lower in Size, Quality, Low Risk “longs” vs the squeeze in “junk” Leverage / High Vol / Cyclical Value) also meant a frustrating day for hedge fund long & short “Crowding” proxies on the first day of the year, as both suffered outsized losses: Hedge Fund Crowding Factor -0.8% (-1.3 z-score) Hedge Fund L/S Proxy -1.5% (-1.8 z-score) Adding to the confusion, while hedge funds were clearing out their 2021 short-book leftovers, CTA/vol control funds were mechanistically rushing back into stocks, leading to the overall market ramp. According to McElligott's calculations, the Nomura QIS CTA model showed +$16.4B of fresh buying in Global Equities on the day (particularly focused in Asia with the Nikkei signal flipping from “-49% Short” to “+100% Long”—notionally buying +$15.6B, on top of +$800mm in US and and +$100mm in European equity futs). In the US, Nomura's Vol Control model estimated another +$3.8B of S&P futures buying as 1-month Realized Vol continued its collapse with a 6th straight day of buying, and now +$23.3B over the past 2 weeks (take a look at where the VIX is and compare it a month ago (spoiler alert: it has been cut in half). So what happens next? Well, as the Nomura strategist reminds us, next week should see the concentration of the forward buying - with particular focus on tomorrow (he is projecting a 1.0% chg = +$7.8B buying; 0.5% chg = +$14.5B buying; 0.0% chg = +$16.9 buying). Yet mechanistic buying aside, the risk is that with Index Options Gamma- and Delta getting longer/more positive, McElligott warns that we are slowly inching nearer towards “potential for a pullback” territory, and as usual Nomura's clients are urged again to focus on the monthly Op-Ex as the “unclench” catalyst there later mid-month January QQQ $Delta back to $13.2B, 94.9%ile SPX / SPY $Delta back to $291.6B, 80.1%ile In conclusion, the Op-Ex tied “window for a pullback” also corresponds with again “stress-y” vol signals as spot indices trade to new highs, and with “Skew” and “Put Skew” flashing again - but particularly noting that “Term Structure” is screening “extreme” and to the point made at the top of the note on the heavy selling of Vol / optionality.  Translated to plain English, what all of the above means is that instead of waiting until Friday to see where this week's op-ex chips may fall, the market is trading more or less as it should, and high duration giga-techs are dumping as yields are spiking... just as one would expect. The only question is whether this "logical" behavior will continue - one look at the chart below shows that the Nasdaq has a ways to drop if indeed it is allowed - or alternatively, if the remarkable bounceback from every op-ex makes another appearance, and spoos trade solidly back over 4,800 on their way to fresh all-time highs. Tyler Durden Tue, 01/04/2022 - 15:01.....»»

Category: blogSource: zerohedgeJan 4th, 2022

Beneath The Surface, Rally

Very good S&P 500 entry to 2022, and the HYG intraday reversal is the sight to rejoice. In the sea of rising yields, both tech and value managed to do well – the market breadth keeps improving as not only the ratio of stocks trading above their 200-day moving averages shows. Likewise VIX refused to […] Very good S&P 500 entry to 2022, and the HYG intraday reversal is the sight to rejoice. In the sea of rising yields, both tech and value managed to do well – the market breadth keeps improving as not only the ratio of stocks trading above their 200-day moving averages shows. Likewise VIX refused to reach even 19, and instead is attacking 16.50. This is not complacency – the bulls were thoroughly shaken at the entry to the session yesterday – but a buying interest that convincingly turned the tide during the day. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get Our Activist Investing Case Study! Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below! (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more As I wrote yesterday: (…) thanks to the credit markets message, I‘m not reading into Friday‘s weakness much. There is still more in this rally – value held better than tech, and high yield corporate bonds didn‘t really slide. The year end rebalancing will likely give way to solid Monday‘s performance. While VIX appears to want to move up from the 17 level, it would probably take more than one day to play out. As the Santa Claus rally draws to its close, the nearest data point worth looking forward for, is Tuesday‘s ISM Manufacturing PMI. It‘ll likely show still expanding manufacturing (however challenged GDP growth is on a quarterly basis), and that would help commodities deal with the preceding downswing driven by energy and agrifoods. Both of these sectors are likely to return to gains, and especially oil is. The only sector taking a beating yesterday, were precious metals. While inflation expectations were little changed (don‘t look for inflation to go away any time soon as I‘ve been making the case repeatedly), the daily rise in yields propelled the dollar to reverse Friday‘s decline, and that knocked both gold and silver off the high perch they closed at last week. Still, none of the fundamental or monetary with fiscal policy originating reasoning has been invalidated – not even the charts were damaged badly by Monday‘s weakness. As economic growth gets questioned while fiscal policy remains expansive unlike the monetary one, volatily in the stock market together with persistent inflation would be putting a nice floor beneath the metals. Even cryptos are refusing to yield much ground, the Ethereum to Bitcoin ratio keeps trading positively, and I‘m not even talking the rubber band that commodities (crude oil and copper) are. Very good for our open positions there, as much as in the S&P 500 – let them keep bringing profits. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Really bullish price action in both S&P 500 and Nasdaq – that was the entry to 2022 I was looking for. Embellished with prior downswing that lends more credibility to the intraday reversal. Credit Markets HYG refusing to decline more, is the most bullish sign for today imaginable – let it hold, for junk bonds now hold the key, especially if quality debt instruments keep declining steeply. Gold, Silver and Miners Gold and silver look to have reversed, but reaching such a conclusion would be premature. The long basing pattern goes on, and breakout higher would follow once the Fed‘s attempting to take the punch bowl away inflicts damage on the real economy (and markets), which is what the yield curve compression depicts. Crude Oil Crude oil is about to launch higher – and it‘s not a matter of solid oil stocks performance only. Just look at the volume – it didn‘t disappoint, and in the risk-on revival that I expect for today, black gold would benefit. Copper Copper swooned, but regained composure – the stop run is over, and we‘re back to base building for the coming upswing. Broader commodities certainly agree. Bitcoin and Ethereum Bitcoin and Ethereum are very gently leaning bullish, but I‘m not sounding the all clear there yet thanks to how long Bitcoin is dillydallying. Cryptos aren‘t yet out of the woods, but their posture has improved thus far noticeably. Summary First trading day of 2022 extended prior S&P 500 gains, and the risk-on appetite is improving as we speak. Commodities are reaping the rewards, and we‘re looking at another good day ahead, including in precious metals taking a bite at yesterday‘s inordinately large downswing. Nothing of the big factors ahead for Q1 2022 as described in today‘s analysis (I wholeheartedly recommend reading it in full for the greatest benefits – there is only so much / little that I can fit into a one paragraph summary), and that means we‘re looking at further stock market gains as the bull runs (including in commodities and precious metals, yes precious metals), aren‘t over in the least. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice. Updated on Jan 4, 2022, 10:47 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJan 4th, 2022

ETFs to Drive Tesla"s Near $1 Million Vehicle Deliveries

Annual deliveries surged 87% year over year to 936,172 vehicles, marking the fastest pace of growth in many years. Tesla Motors TSLA reported another quarter of record deliveries, underscoring its strong growth and defying the global automotive semiconductor shortage that is hampering car production across the globe.The solid delivery data is likely to boost the ETFs having a substantial allocation to this luxury carmaker like Simplify Volt Robocar Disruption and Tech ETF VCAR, Consumer Discretionary Select Sector SPDR Fund XLY, Vanguard Consumer Discretionary ETF VCR, Fidelity MSCI Consumer Discretionary Index ETF FDIS and MicroSectors FANG+ ETN FNGS.Tesla Q4 DeliveriesThe company delivered a record 308,600 (296,850 Model 3 and Y, and 11,750 Model S and X) vehicles. Deliveries surged 70% from the year-ago levels and 30% from Q3. In fact, Q4 is the sixth consecutive quarter that the world's most valuable automaker posted record deliveries. With this, annual deliveries surged 87% year over year to 936,172 vehicles, marking the fastest pace of growth in many years.The electric carmaker produced 305.840 (292,731 Model 3 and Y, and 13,109 Model S and X) vehicles during the quarter (read: 5 Top-Ranked ETFs That Outperformed Wall Street in 2021).The remarkable data came despite the several challenges, including semiconductor shortages, congestion at ports and rolling blackouts, that hurt production rates in the final quarter of the year.Tesla hit the trillion-dollar market capitalization for the first time in October, following the biggest-ever order from Hertz and joined an exclusive club of mega-cap technology companies. The electric carmaker received an order for 100,000 of its electric vehicles, valued at $4.4 billion, from rental-car icon Hertz GlobalTesla has been outperforming the market, having gained 34.5% over the past three months. It has a Zacks Rank #2 (Buy) and a Growth Score of A.ETFs in FocusSimplify Volt Robocar Disruption and Tech ETF (VCAR)Simplify Volt Robocar Disruption and Tech ETF is an actively managed ETF, seeking concentrated exposure to the leader of autonomous driving technology and then enhancing the concentrated exposure with options. It is heavily exposed to the Tesla stock and Tesla call options at 25% share.Simplify Volt Robocar Disruption and Tech ETF seeks to boost its performance during extreme moves in Tesla, charging investors 0.95% in annual fees. It has accumulated $9.1 million in its asset base while trading in an average daily volume of 1,000 shares (read: Best-Performing ETFs of Fourth Quarter).Consumer Discretionary Select Sector SPDR Fund (XLY)Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index.Consumer Discretionary Select Sector SPDR Fund is the largest and the most popular product in this space, with AUM of $23.7 billion and an average daily volume of around 7.9 million shares. Holding 61 securities in its basket, Tesla takes the second spot with 18.5% of assets. Consumer Discretionary Select Sector SPDR Fund charges 12 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.Vanguard Consumer Discretionary ETF (VCR)Vanguard Consumer Discretionary ETF currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 304 stocks in its basket. Of these, Tesla occupies the second position with a 15% allocation. Internet & direct marketing retail takes the largest share at 25.4% while automobile manufacturers, home improvement retail and restaurants round off the next two spots.Vanguard Consumer Discretionary ETF charges investors 10 bps in annual fees, while volume is moderate at nearly 126,000 shares a day. The product has managed about $7.4 billion in its asset base and carries a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: ETFs to Gain as US Consumer Confidence Improves in December).Fidelity MSCI Consumer Discretionary Index ETF (FDIS)Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index, holding 297 stocks in its basket. Of these, TSLA takes the second spot with a 14.5% share. Internet & direct marketing retail makes up for the top sector with 25.2% share followed by specialty retail (20.1%), automobiles (17.4%) and hotels, restaurants & leisure (15.1%).Fidelity MSCI Consumer Discretionary Index ETF has amassed $2 billion in its asset base while trading in a good volume of around 163,000 shares a day on average. Fidelity MSCI Consumer Discretionary Index ETF charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 with a Medium risk outlook.MicroSectors FANG+ ETN (FNGS)MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index, designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 equal-weighted stocks in its basket with Tesla accounting for 10% share.MicroSectors FANG+ ETN has accumulated $78.8 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 23,000 shares and has a Zacks ETF Rank #3 (Hold). Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA): Free Stock Analysis Report Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports MicroSectors FANG ETN (FNGS): ETF Research Reports Simplify Volt Robocar Disruption and Tech ETF (VCAR): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 3rd, 2022

The Elon Musk Elevator Down

The Elon Musk Elevator Down Submitted by QTR's Fringe Finance “Stocks take the stairs up, and the elevator down.” Bear with me today. I know tomorrow is New Year's Eve, 2021 and I know I’ve written extensively over the last two months about the fact that Tesla (TSLA) is the only string that Cathie Wood’s flagship ARK Innovation Fund (ARKK) is hanging on by. And while I definitely don’t want to spend every day harping about the unmatched investing prowess of Ms. Wood, I do think today marks a great time to reiterate and examine this sentiment, and I’ll explain why. First, I think it’s worth noting: for all of the CNBC appearances, all of the ass-kissing by podcasters and financial media hosts, all of the touting of Cathie Wood as a “visionary”, all the magazine covers and writeups (Forbes called her “Wall Street’s Wizard” on their 50 over 50 cover), all of the conference appearances and the rest of the endless bluster we have had to endure for the last 3 years, ARKK has now officially given up all of its historical outperformance versus its benchmark as a result of the absolutely atrocious year it had in 2021. (Note: All figures used in this article were accurate to the best of my ability as of December 30, 2021 and do not include market performance for ARKK for the last trading day of the year.) This is seven or eight years worth of “work” (or at least making it look like you’re doing some work) down the drain as a result of underperforming the NASDAQ by more than 46% this year, as of 12/29/2021’s close. All of the comparisons and arguments over the last 2 years about how ARKK is such a better vehicle than the NASDAQ due to Wood’s investing acumen are officially moot and heading into 2022, Cathie Wood is going to have to put up or shut up. She may get a fresh YTD P/L figure to cling to, but “Wall Street’s Wizard” won’t just be fighting to outperform her benchmark this year, she’ll be fighting for ARKK’s performance versus its benchmark since inception and a lot of the firepower Wood needs is going to have to come from this guy: If I were an ARKK investor, this would frighten me. Meanwhile, almost every headline on Wednesday this week was about how the S&P made its 70th new all-time high day and how the year stood out as such a blockbuster one for the stock market. ARKK finished Wednesday down 1%. In fact, over the last 5 trading days, Tesla has been up 15%, the NASDAQ has been up 2.77% and ARKK is lower by -5.27%. Are you starting to understand why, exactly, it’s going to be a problem for Cathie Wood if Tesla starts to pull back? Over the last month, all of the Top 10 holdings in ARKK are lower between -2.8% and -20.9%, including Tesla. The NASDAQ is only down -0.11% over the same period. While the NASDAQ is only 1.8% off its 1 year high, ARKK’s well known/top components have fallen between 11.6% and 69.4% from their 1 year highs (Full disclosure: using % off highs is an ugly way to make a chart, no matter what you’re looking at). And for those thinking the pain could be over and there’s nowhere to go but up, here’s a gentle reminder that out of ARKK’s well known/top holdings, the lowest price to sales ratio is 4.1x and the highest is still 39.6x sales. The exercise becomes even funnier when you attempt to use a price to earnings ratio. According to YCharts, six of these 11 companies turn up a null response when asked for a forward PE, while the forward PE’s of the remaining five names, Zoom, Roku, Tesla, Twitter and Twilio, return figures of 37x, 144x, 175x, 189x and (drumroll please) 2,802x. But hey, maybe ARKK has bottomed, right? I know I’ve mentioned this before, but the portfolio of companies Wood continues to keep in her “flagship” fund are all still wildly overvalued and, in my opinion, have plenty of room to fall in a situation where high flying stocks re-rate lower. Via CathieWoodStocks.com2022 is going to be such a crucial year to watch ARKK, not only to track its performance against its benchmarks, but to see if Wood’s narrative about her “innovation” stocks (whatever that means) being in “deep value” territory (read: routinely over 100x sales) still holds water with the financial media (it will) and investors (it may not). My guess is the narrative will not hold up, and that we won’t even need a market crash to prove it - we’ll just need either a slight rotation from growth to value or a 30% drawdown in Tesla at some point. Ergo, Wood has two options as I see it at this point: Rebalance her portfolio to remove Tesla as a top weighting, which would contradict all the claims she’s made about the company over the last two years and would subject her portfolio to more exposure to the names that dragged her down in 2021 to begin with. Cling even tighter to Tesla and simply pray to god that despite volatility in the company’s most crucial market (China), the constant recalls, the amped up valuation, the psychotic CEO who has been charged with securities fraud and routinely taunts regulators in between selling $15 billion whacks of stock and massive emerging competition both domestically and abroad, shit just doesn’t go wrong. Tesla is what made Cathie Wood - but it could also be what breaks her. Things get tricky for ARKK’s balancing act heading into 2022. Look, many people have different explanations for Tesla’s historic run over the last two years. Personally, as my readers know, I still believe it was fueled by the options market. Regardless, it’s no longer about how it got here, it’s about where it is going. The stock simply can’t continue to go parabolic forever. Tesla was up 53.9% this year and ARKK plunged -24.63%. What kind of outperformance from Tesla will Wood need for ARKK to break even next year? At some point, either the options market hysteria will end, Tesla will miss operational milestones, or the reality of its valuation will simply set in. I’ll go further and say that even if Tesla winds up higher in the future, it’s may not get there fast enough to counterbalance the hand-selected portfolio of high flying names that Wood has stuffed ARKK with. For me, it’s not a question of if ARKK will bear the consequences of what I see to be poor management, it’s a question of when. A friend of mine said it best yesterday about Wood: “A market that takes Tesla down 30% will wreck the rest of her holdings even more.” And he’s right. After 6 or 7 tough years of taking the stairs up, Cathie Wood could be getting ready to take the Elon Musk elevator down. Photo graciously custom made and provided by @Keubiko-- As always, Zerohedge readers get a 20% discount to my blog at any time, that lasts forever, by clicking here: Get 20% off forever Disclaimer: Now or at the time of publishing I owned/own ARKK, QQQ, IWM, TSLA puts and am routinely short all of these names and sometimes other names that Cathie Wood has exposure to. Readers should assume I am short Cathie Wood at any given time. I may add any name mentioned in this article and sell any name mentioned in this piece at any time. None of this is a solicitation to buy or sell securities. These positions can change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I get shit wrong a lot.  Tyler Durden Mon, 01/03/2022 - 06:30.....»»

Category: blogSource: zerohedgeJan 3rd, 2022

As Good As It Gets

S&P 500 and risk-on assets continued rallying, pausing only before the close. Santa Claus delivered, and the final trading week of 2021 is here. With the dollar pausing and VIX at 18 again, we‘re certainly enjoying better days while clouds gather on the horizon – Thursday‘s inability of financials to keep intraday gains while yields […] S&P 500 and risk-on assets continued rallying, pausing only before the close. Santa Claus delivered, and the final trading week of 2021 is here. With the dollar pausing and VIX at 18 again, we‘re certainly enjoying better days while clouds gather on the horizon – Thursday‘s inability of financials to keep intraday gains while yields rose, is but one albeit short-term sign. The Fed is still accomodative (just see the balance sheet expansion for Dec – this is really tapering), didn‘t get into the headlines with fresh hawkish statements, and inflation expectations keep rising from subdued levels. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Importantly, bonds prices aren‘t taking it on the chin, and the dollar hasn‘t made much progress since late Nov. Both tech and value are challenging their recent highs, and the ratio of stocks trading above their 200-day moving average, is improving. The same for new highs new lows – the market breadth indicators are picking up. We haven‘t seen the stock market top yet – the rickety ride higher isn‘t over, Santa Claus rally goes on, and my 2022 outlook with targets discussed that a week ago. Precious metals are extending gains, and aren‘t yet raging ahead – the picture is one of welcome strength returning across the board. The same goes for crude oil finally rising solidly above $72 as the omicron fears are receding in light of fresh incoming data including South African policies. It‘s only copper that‘s now reflecting the prospects of real economy slowdown. At the same time, the crypto rebound last week served as a confirmation of broad risk-on advance. Still more to come, as per Thursday‘s article title. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is within spitting distance of ATHs, and the bulls haven‘t said the last word in spite of the approaching need to take a rest. It‘s rally on, for now. Credit Markets HYG has finally overcome the Sep highs, but its vulnerability at current levels is best viewed from the point of view of LQD underperformance. Investment grade corporate bonds could have been trading higher compared to the progress made by TLT. Gold, Silver and Miners Gold and silver are looking up, and so are miners – the upswing isn‘t overheated one bit, and can go on as we keep consolidating with an increasingly bullish bias. Crude Oil Crude oil once again extended gains, and even if oil stocks are a little lagging, the medium-term bullish bias in black gold remains. The path of least resistance is once again up. Copper Copper at least closed unchanged – the fresh steep rally indeed seems more than quite a few weeks ahead. But the table for further gains is set. Bitcoin and Ethereum Bitcoin and Ethereum are entering the final trading week of 2021 in good shape. The rising tide of liquidity is still lifting all boats in a rather orderly way. Summary Thursday brought a proper finish to the Christmas week, and we‘re not staring at a disastrous finish to 2021 across the board. Short-term extended, but overall very positive bond market performance is aligned, and we can look for positive entry to 2022 in stocks, precious metals, oil, copper and cryptos alike. Shrinking global liquidity, no infrastructure bill, and consolidating dollar complete the backdrop of challenges that would make themselves heard well before Q2 2022 arrives. I hope you had Merry Christmas once again, and will also enjoy the relatively smooth ride while it lasts – 2022 will be still a good year, but with its fair share of corrections. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice. Updated on Dec 27, 2021, 2:09 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 27th, 2021

Pharma Stock Roundup: FDA Approves PFE & MRK"s Oral Pills for COVID & Other Drugs

FDA approves Pfizer's (PFE) and Merck's (MRK) oral COVID antiviral pills and AstraZeneca's (AZN) asthma medicine, Tezspire (tezepelumab). This week, the FDA granted emergency approval to Pfizer PFE and Merck’s MRK oral COVID antiviral pills, Paxlovid and molnupiravir, respectively. The regulatory agency also approved AstraZeneca’s AZN asthma medicine, Tezspire (tezepelumab), Novartis’ NVS LDL-C–lowering siRNA-based therapy, Leqvio (inclisiran) and Glaxo’s GSK long-acting injectable therapy, Apretudefor HIV prevention.Recap of the Week’s Most Important StoriesFDA Approves Pfizer and Merck’s Oral COVID Pills: The FDA granted Emergency Use Authorization (EUA) to Pfizer’s promising oral antiviral candidate, Paxlovid in combination with low-dose ritonavir to treat mild-to-moderate COVID-19 in adult and pediatric patients at increased risk of hospitalizations or death. Pfizer expects to begin delivering Paxlovid immediately. Paxlovid’s approval was based on clinical data from an interim analysis of a phase II/III study, EPIC-HR study. Data from the study showed that Paxlovid (administered) reduced the risk of hospitalization or death by 89% in non-hospitalized adult patients with COVID-19 at high risk of progressing to severe illness compared to placebo within three days of symptom onset. Similar benefits were observed in patients treated within five days of symptom onset.The FDA also granted EUA to Merck and partner Ridgeback Biotherapeutics’ similar oral antiviral pill, molnupiravir for treating high-risk adults with mild-to-moderate COVID-19. However, Merck’s pill can only be prescribed for whom alternative COVID-19 treatment options authorized by the FDA are not accessible or clinically appropriate. It cannot also be prescribed as the first treatment for patients hospitalized due to COVID-19 or for pregnant women. The authorization of molnupiravir was based on data from the phase III MOVe-OUT study. Data from the final analysis of the MOVe-OUT study showed that the medicine reduced the risk of hospitalization or death by approximately 30% in non-hospitalized at-risk adult patients with mild-or-moderate COVID-19, which was less than 50% as previously reported, per interim data announced in October.Paxlovid and molnupiravir are antiviral medicines, which can be prescribed as at-home treatments to help fight mild-to-moderate COVID-19 infection. It can help prevent hospitalization in patients with a mild-to-moderate form of the disease but at high risk of severe COVID-19 and thus lower some of the pressure facing the healthcare and hospital systems.FDA Approves AstraZeneca and Amgen’s Tezepelumab: The FDA approved Amgen and AstraZeneca’s monoclonal antibody, Tezspire (tezepelumab), for the treatment of severe asthma. The approval for Tezspire was based on data from the PATHFINDER clinical program and included the pivotal phase III NAVIGATOR study. Regulatory applications seeking approval of Tezspire are under regulatory review in the EU and Japan.The European Medicine Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) gave a positive opinion recommending the approval of AstraZeneca’s drug Saphnelo to treat moderate-to-severe active autoantibody-positive systemic lupus erythematosus (SLE), the most common form of lupus. The drug was approved in the United States and Japan in August and September this year, respectively.The FDA accepted and granted priority review to AstraZeneca’s supplemental biologics license application (sBLA) seeking approval of rare disease drug Ultomiris for generalized myasthenia gravis (gMG). The FDA will give its decision in the second quarter of 2022. Ultomiris, a long-acting C5 complement inhibitor, was added to AstraZeneca’s portfolio with this year’s acquisition of Alexion and is already approved to treat paroxysmal nocturnal haemoglobinuria and atypical haemolytic uraemic syndrome.FDA Approves Glaxo’s HIV Injection for PrEP: The FDA approved Glaxo’s long-acting injectable form of cabotegravir drug for the prevention of HIV infection, also called pre-exposure prophylaxis or PrEP. The drug, to be marketed as Apretude in the United States, is the first and only long-acting injectable therapy approved for HIV prevention.  It will reduce the daily administration of currently available oral pills for PrEP to as few as six injections a year. An oral formulation of cabotegravir, with the trade name of Vocabria, is already approved in combination with J&J’s Edurant (oral rilpivirine) for the short-term treatment of HIV-1 infection. A combination of long-acting injectable cabotegravir and Edurant is approved as Cabenuva for the treatment of HIV-1 infection in virologically suppressed adults.Novartis to Buy Gene Therapy Company: Novartis announced a definitive agreement to acquire London, U.K.-based gene therapy company Gyroscope Therapeutics for an upfront payment of $800 million. The acquisition will add Gyroscope Therapeutics’ one-time gene therapy candidate, GT005, to Novartis’ pipeline. GT005 is being developed in phase II to treat geographic atrophy, a leading cause of blindness, for which there are no approved treatments. In addition to the upfront payment, Gyroscope Therapeutics will be entitled to potential additional milestone payments of up to $700 million.The FDA granted approval to Novartis’ small interfering RNA (siRNA) therapy, Leqvio (inclisiran), to lower LDL-C or “bad” cholesterol. The injection is to be given as an initial dose and then two maintenance doses a year. With the approval, Leqvio becomes the first LDL-C–lowering siRNA-based therapy approved for treating atherosclerotic cardiovascular disease (ASCVD). Novartis received marketing authorization for Leqvio from the European Commission in December 2020.Novartis signed an option, collaboration and license agreement with BeiGene, per which it will obtain the development and commercialization rights to the latter’s late-stage cancer candidate, ociperlimab, if the option is exercised. Per the terms, Novartis will make an upfront payment of $300 million to BeiGene while the latter will also be entitled to earn a fee of $700 million if the option is exercised before late 2023.Novartis also announced disappointing top-line results from phase III studies, PEARL 1 and PEARL 2, on ligelizumab in chronic spontaneous urticaria (CSU). Data showed that the studies met their primary endpoints of superiority for ligelizumab versus placebo at week 12 but not versus Xolair (omalizumab).Pfizer to Test 3-Dose COVID-19 Vaccine Regimen in Kids: Pfizer and BioNTech are planning to test a third 3 µg of their COVID-19 vaccine, at least two months after the second dose of Comirnaty in children aged six months to five years for better protection against COVID-19. The decision was taken after a routine review of an ongoing clinical study by the external independent data monitoring committee (DMC). A pre-specified immunogenicity analysis of the data by the DMC from a subset of a phase II/III study population showed that the COVID-19 vaccine failed to demonstrate non-inferior immunogenicity levels in two to five years age group compared to 16 to 25 years aged individuals.The CHMP recommended approval for Pfizer’s three drugs — somatrogon for pediatric growth hormone deficiency, Prevnar-20, its pneumococcal 20-valent conjugate vaccine, and Lorviqua as a first-line treatment for ALK-positive advanced non-small-cell lung cancer. A decision related to the potential approval of these drugs from the European Commission is expected next year.Pfizer & BioNTech announced an agreement with the European Commission (EC) to supply more than 200 million additional doses of their COVID-19 vaccine, Comirnaty. The additional doses will be delivered in 2022. With the latest option exercise, the companies now have agreements to supply more than 650 million doses to EC member states in 2022.The NYSE ARCA Pharmaceutical Index declined 0.9% in the last five trading sessions.Large Cap Pharmaceuticals Industry 5YR % Return Large Cap Pharmaceuticals Industry 5YR % ReturnHere’s how the eight major stocks performed in the last five trading sessions.Image Source: Zacks Investment ResearchIn the last five trading sessions, AbbVie rose the most (1%) while Pfizer declined the most (4.2%).In the past six months, Pfizer has recorded the maximum gain (53.4%) while Novartis has declined the most (6.3%)(See the last pharma stock roundup here: PFE Announces Arena Buyout, LLY Ups 2021 View & More)What's Next in the Pharma World?Watch out for regular pipeline and regulatory updates next week. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AstraZeneca PLC (AZN): Free Stock Analysis Report GlaxoSmithKline plc (GSK): Free Stock Analysis Report Novartis AG (NVS): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis Report Merck & Co., Inc. (MRK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 24th, 2021

Still More To Come

S&P 500 Santa rally goes on, and risk-on markets rejoice. What a nice sight of market breadth improvement, and confirmation from bonds. Financials and industrials are lagging, but real estate, healthcare and tech are humming smoothly. As I told you yesterday about volatility: Q3 2021 hedge fund letters, conferences and more (…) The VIX is […] S&P 500 Santa rally goes on, and risk-on markets rejoice. What a nice sight of market breadth improvement, and confirmation from bonds. Financials and industrials are lagging, but real estate, healthcare and tech are humming smoothly. As I told you yesterday about volatility: if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more (…) The VIX is calming down, now around 21 with further room to decline still – at least as far as the remainder of 2021 is concerned. We got the lower values, and today is shaping up to look likewise constructively for the bulls across both paper and real assets. Yesterday‘s dollar decline has helped as much as well bid bonds. Inflation expectations aren‘t yet doubting the Fed, there is no more compressing the yield curve at the moment, so it‘s all quiet on the central bank front. That‘s good, the Santa rally can go on unimpeded. Precious metals are peeking higher in what looks to be adjustment to the lower yields and dollar, and commodities upswing remains driven by energy, base metals and agrifoods. Cryptos hesitation may hint at slimmer gains today than was the case yesterday when instead of a brief consolidation, we were treated to improving returns. Merry Christmas if you‘re celebrating – and if not, happy holidays spent with your closest ones. Let the festive season and message of the Prince of Peace permeate our hearts and inspire the best in mankind. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 rally goes on, and the 4,720s are again approaching. Market breadth isn‘t miserable in the least, and the riskier end of the bond spectrum looks positive even if larger time frame worries haven‘t gone away. Classic Santa Claus rally. Credit Markets HYG keeps jumping higher – the risk-on sentiment is winning this week. A bit more strength from LQD would be welcome, but isn‘t an obstacle to further stock market gains. Gold, Silver and Miners Gold downswing indeed weren‘t to be taken at all seriously – solid gains across precious metals followed. I‘m expecting a not too rickety ride ahead as the metals keep appreciating at relatively slow pace. Crude Oil Crude oil extended gains, and even if oil stocks paused, downswing in black gold isn‘t looming. Importantly, the $72 area has been overcome – the bulls should be able to hold ground gained. Copper Copper keeps tracking the broader commodities rally, and isn‘t outperforming yet. The red metal‘s long consolidation goes on, and a breakout attempt on par with early Oct seems to be a question of quite a few weeks (not days) ahead. Bitcoin and Ethereum Bitcoin and Ethereum are still consolidating Tuesday‘s gains – the performance is neither disappointing nor stellar. Both cryptos don‘t look to be in the mood for a break below Dec lows. Summary If not yesterday, then probably today we‘ll get a little consolidation of prior two day‘s steep S&P 500 and commodity gains (copper says) – the positive seasonality hasn‘t spoken its last word. HYG posture has significantly improved, and that bodes well for short-term gains still ahead before we dive into market circumstances turning increasingly volatile towards the end of Q1 2022. For now, let‘s keep celebrating – Merry Christmas once again – and enjoying the relatively smooth ride. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice. Updated on Dec 23, 2021, 10:33 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 23rd, 2021