S&P 500 above key level
The market’s uptrend has slowed once more, and the average stock still has some catching up to do, but staying above 4,370 on the S&P 500 indicates that things are on track.
It is common for the kind of intuitive, straightforward Jobs Day rally that we saw on Friday to be tested the following week, which may have been the case this morning, with dips in Treasury yields/banks/industrials that have now firmed up a bit.
The index has now made a new intraday high for 11 weeks in a row, one of the longest such streaks on record (source: Instinet). When previous streaks ended, there were a couple of sharp downturns (decreases of 15% to 20% in 1997 and 1998), but no real reversal and no major, decisive market tops.
At this point, everything is speculative and contingent. Although there is no enthusiastic push into economic-acceleration themes, the constant baton-passing (banks to tech and back, WFH to travel and vice versa) demonstrates a kind of market homeostasis at work, with little overall selling pressure.
Bond market chart and pretty extreme inflows into Treasuries support the notion that yields have reached short-term lows for the time being. Is the market pushing for a Covid-case peak in the coming weeks, as many leading indicators suggest? Is this just a continuation of the year-long ebb-flow between cyclical and secular-growth assets?
If a sharp pullback necessitates both overconfident investor positioning and tightening financial conditions, we don’t see that combination on display. Liquidity indicators are at their loosest, but still quite generous, readings. Furthermore, an increase in hedging activity reflected in total put/call ratios (index and single-stock options) contradicts the notion that investors are complacent in this area.
Yes, August is historically difficult, but we’ve said it before. Everyone is aware of it. If risk assets hold up well in the face of this fact, it most likely demonstrates underlying strength rather than reckless disregard for the hazards.
Earnings-forecast momentum is strong, but it is becoming more uneven. The S&P 500 is now 18 percent cheaper on forward price-earnings than it was at the start of the year. However, if we are in for a return to the norm in 2022, when earnings estimates begin to be overly optimistic, we should expect a lumpier, less bulletproof market.
Market breadth has improved throughout the session, but it is still on the weak side. More stocks are falling than rising.
The VIX rising a point is part of the usual Monday rebuild, but it also likely reflects the hedging impulse mentioned above. Given the calendar and the uncertainties of Covid interacting with back-to-school and the Fed’s taper plan, traders are taking advantage of cheaper protection.
(SRNG) in the ARK Genomic Revolution ETF and 5,737,252 shares in her flagship fund, ARK Innovation.
Soaring Eagle Acquisition Corp. is currently trading at $10 per share, which is typical for a pre-merger SPAC, valuing Wood’s total position at approximately $133.8 million.
Ginko Bioworks, a synthetic biology company, is set to merge with the blank check company. According to the merger press release, cell programming affects a variety of industries, including mRNA vaccines, animal-free protein, and renewable plastics.
Ginko Bioworks, founded in 2008, uses robotic automation, proprietary software, and data analytics to improve the technology and reusable biological assets required to engineer biology.
“The magic of biology is that cells run on digital code similar to a computer, except instead of 0s and 1s, they have As, Ts, Cs, and Gs,” said Jason Kelly, co-founder and CEO of Ginkgo Bioworks, in a press release. “Ginkgo’s platform simplifies the programming of this code, and we are making this platform available to organizations working to solve our most pressing problems.” The opportunity to work with programmed cells has never been more apparent, from mRNA vaccines reaching people’s arms to combating climate change.” The transaction implies Ginko has a $15.0 billion equity valuation.
Soaring Eagle’s stock rose slightly in premarket trading on Tuesday.
Bitcoin is heading to $100,000 according to this firm
According to an investor note released on Monday, Bitcoin has surpassed its 200-day moving average, and Fundstrat believes now is the time to buy.
According to the firm, that is a rule of bitcoin trading: buy above its 200-day moving average, and it is a “biggie,” the firm’s Tom Lee said in the note.
According to him, the cryptocurrency’s forward performance is stronger when it is trading above its 200-day moving average, with a six-month forward return of more than 193 percent when trading above that level versus more than 10 percent when trading below that level.
Lee, a long-time bitcoin supporter, believes it is unclear why the price is rising. He added that it is significant that the virtual currency continues to rise despite “legislative and regulatory assault” from China, which banned cryptocurrency mining operations in June, and the United States, which is nearing the end of a lengthy debate in Congress over how to handle crypto taxes outlined in the proposed infrastructure bill.
“Yet, bitcoin is surging,” Lee said. According to Fundstrat’s investor note, the play is “simple”: go long on bitcoin or buy crypto equities. “Digital assets should rally broadly,” he predicted. In addition to bitcoin and ether, investors can purchase exchange-traded notes through Bitwise and Grayscale, according to Lee. Among crypto equities, he pointed out that exchanges Coinbase and Voyager, as well as mining company Riot Blockchain, have a beta that is two to three times that of bitcoin. That is, these shares are volatile in comparison to the digital asset, but they have high return potential. Lee also mentioned the crypto-friendly bank Silvergate, noting that it has a beta that is five to ten times that of bitcoin.
Because trading fees account for a large portion of the revenue generated by crypto exchanges, their stock prices are closely linked to the price of bitcoin. Many, however, are working to diversify their revenue streams. This includes Coinbase, which is set to release its quarterly earnings report on Tuesday.
While trading volume has been lower in the past quarter, analysts remain optimistic about Coinbase’s second-quarter performance, expecting growth in its retail user base to signal broader adoption for Coinbase and the crypto market as a whole.