weekly stock market update

amc and gme are Thomas the Tank

This is a weekly market update (I post daily to TikTok). I publish these once a week (beta phase), as well as single stock pieces (1-3x a month) and macro deep-dives. I also publish on TikTokYoutube, and Twitter!

Youtube linked here :)


What Happened in the Stock Market This Week?

stock market wyd?

Even better - AMC is up 111% over the past week. Forget everything you learned! Meme stonks are the only path forward.


Market Movers

Because of collective belief in an asset. GME and AMC are literally - Thomas the Tank Engine - “I think I can”.


Economic Data

  • Durable goods missed at -1.3% vs +0.8% expected

  • Initial jobless claims fell to 406k vs 425k estimated

  • Consumer Confidence Index was weaker than expected at 117.2 vs 118.8 expected

  • PCE (the Fed’s preferred measure of inflation) and CPI (the other measure of inflation that we have for some reason) generally move together, but sometimes they do not (like most things in economics). CPI puts a higher weight on energy, used vehicles, and housing, whereas PCE puts more emphasis on healthcare and financial services.

    • PCE had a massive print, but the bond market didn’t care at all. The idea is that everything in the PCE is transitory - so even though it was up ~3%, it’s nbd, because, you know - it’s transient.

  • There is also a cabinet shortage. Because of course there is.


Economic Policy

  • Reverse Repo: it didn’t cross $500bn - but it is still at all-time-highs. I am going to write (and do a TikTok) on this soon because it is *confusing*

    • But basically RRP is a drain for reserves - banks use RRP as a place to keep rates from going too low by allowing borrowing at a fixed rate (h/t to DC), which allows the Fed to continue QE

    • Here is a brief explainer that I will improve upon:

    • BUT ALSO Federal Home Loan Banks auctioned 4-week discount notes and stopped at -0.001% (which is concerning, because the Fed is FIGHTING for rates to not go negative)

  • Global central bank balance sheets collectively approaching $26T; what even is ~debt~ but a formality at this point


Crypto

Crypto still going through it.

  • I am working on a paper ab


    out crypto market structure - below are some of the reasons I am working through on the reasons behind the selloff -

There are a few reasons behind the selloff:

  1. Bearish options skew: traders were positioned skewish, lots of market selling, huge deleveraging, margin calls, liquidation

  2. Stablecoin liquidity - USDT, USDC, DAI all trading well up til selloff, but once the selloff hit they all expanded tremendously - supplies +30-80%

  1. Tax day: Always selling before taxes :,)

  2. Scaled back stimulus: people don’t have the same amount of inflows, so neither does crypto

  3. Chinese mining: China crackdown could impact crypto

  4. Inflation data: Market is worried about inflation, lots of spillage between equities and cryptos

  5. Speculators falling out 

    1. Can access derivatives without going on chain

    2. Unit bias - retail has moved on to other things

  6. Trading platforms: people can trade on Robinhood, eToro - AND get access to equity here. So when equities selloff, crypto is more likely to be more correlated.

    1. Binance is a retail platform - they experienced panic selling and rotation into other crypto assets - retail led speculation and were spooked

  7. GBTC Grayscale’s product - these took in a lot of btc coins, and created strong institutional demand - created a supply squeeze too - saw a weakening in demand flows

  8. Liquidiations make everything more intense, and with lots of leveraged buying, thats a big issue.

More to come! I apologize, I feel like half this note was a big “Under Construction” sign. But much more to come.


Next Week

Earnings

Economic Data

  • JEROME ON FRIDAY

Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.