weekly stock market update

hot price summer??

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 TikTok, Youtube, and Twitter!

Youtube linked here :)

Also, it’s long because of all the graphs (gotta have the graphs) so might be cut off in your inbox!

Good tweet:

What Happened in the Stock Market This Week?

  • Short week, but that doesn’t mean it was SHORT of fun

  • Stock market ended the week strong, with strength (finally) in tech, and general strength in energy, real estate, and financials. Every sector ended positive on Friday!

  • The best performers on the YEAR - lesson learned! Never bet against energy or steel - or luxury

AMC: Please Read My Thoughts Here

I did a whole piece on AMC so I won’t talk about it too much - but main thing is, it doesn’t make sense, it will never make sense, and it only makes “sense” if you separate valuation from stonk and realize that things are driven by things not being real.

  • Right now, GME is one of the best performing stocks in the Russell 2000 Value Index. But all that could change when the Russell rebalances, which could put a damper on the meme stonk party.

    • The rotation trade is the meme trade, after all

Market Movers

  • Hedging inflation: When asked how to hedge against inflationary worries, a lot of people recommend investing in Emerging Markets. But a recent paper came out showing that “EM equities are highly correlated to US stocks & high yield bonds, limiting diversification benefits”

    • Basically, you can’t escape the influence of the United States, so it can be harder to diversify abroad

    • However, they do outperform when the USD is depreciating, making it a good currency play

    • The largest MSCI EM index members will experience 50% population declines as well, which could put pressure on those countries in the future. The article also notes that this is “more from an absolute than relative perspective.” Europe and Japan have poor demographic profiles too, and the US has exceptionally high valuations “which typically leads to low or negative long-term returns”.

    • The article concludes: “Investing in stocks today is like being between a rock and a hard place, with the low-hanging fruit harvested a long time ago.” :/

  • Where’s the meat? 1/5 of US beef capacity wiped out by another cybersecurity attack. JBS is the largest meat producer globally - so this is a big deal. I think we are going to see more attacks like this moving forward

  • International vs Domestic: FB revenue abroad has been dominated by growth in the United States - but FB is still one of the most powerful companies in the world.

Economic Data

Economic Policy

  • The Fed IS TAPERING: Fed will wind down corporate credit facility says $5.2B in bonds and $8.5B in bond ETFs so about $13.7B total (not really material in the grand scheme of things). But the fact that they are starting this journey means that there is definitely more to come.

    • This quote from FT sums it up perfectly: 'It has never been about the actual dollar amount the central bank is buying or selling. Last year, the symbolism of starting up the facility was enough to revitalize the financial markets. Policy makers have to hope the reverse doesn’t hold true.'


Bitcoin Miami is happening but…

What is the market pricing in?

Rishi had an excellent thread on this -

  • The market is pricing in rate hikes - but there is a disconnect as each is pricing in a different component of *why* rates should be hiked

  • Inflation is expected to be transient - rise then fall - but if it ends up NOT being transient, more hikes would be in our future.

Next Week

The market has a lot to digest.

Earnings next week

Economic Calendar

  • Consumer expectations

  • CPI on June 10!

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.