CPI data tomorrow, NASDAQ approaches COVID sell-off levels
CPI data tomorrow, NASDAQ approaches COVID sell-off levels
TUESDAY MARKET UPDATE
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Good Morning Everyone!
Remember, the stock market crashed in:
2020 (-34%)
2008 (-56%)
2000 (-49%)
1990 (-20%)
1987 (-34%)
1980 (-27%)
1973 (-48%)
…and recovered to all time-highs each and every time!
MARKET UPDATE
Nasdaq down 10% in the past 3 days
The 6-month tech sell-off has now nearly matched the violent COVID lockdown selloff (-30%) in March 2020.
Notable Year-to-date destruction
Carvana          -83%
Shopify           -75%
Netflix            -71%
Spotify            -60%
Snowflake       -58%
SNAPÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â -50%
Moderna        -46%
Uber               -45%
ISRGÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â -42%
Nvidia             -42%
Meta              -42%
Starbucks        -37%
Salesforce      -36%
Amazon          -35%
Nike                -33%
Disney            -31%
G.E.                 -23%
Google            -22%
JPMÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â -22%
Microsoft       -21%
Top 10 performers yesterday were Staples
The market is selling long duration growth to buy low-growth Staples at similar valuations
Looking for something bullish, enter Ed Yardeni
Continuing positive earnings revisions
Market re-rating 21.5x forward P/E to 17.5
Mega-tech de-rating (GOOG, AMZN, AAPL, FB, MSFT, NFLX, TSLA) 35x to 25x
Strong U.S. consumer – Jobs and balance sheet
No credit crunch – M2 money supply is $3 trillion above pre-pandemic levels
Inflation to peak this summer
10yr    3%
11:30 a.m. Biden to speak about inflation
Tomorrow @8:30 a.m. CPI data
Yesterday, the 10yr yield nearly touched 3.2% before ending back at 3%.  Â
Possible theories on why bond rates are rising fast
Fed will not crush inflation if it means torpedoing the economy
(Powell is not Volcker)
Lack of commitment to get inflation back to target
Commit to 2% inflation target rather than a soft landing
Crude $103   flat
Yesterday was the worst day for Energy stocks since June 2020
ETF XLE fell 8% yesterday
Market is worried about COVID related lockdowns in China
Europe still wrangling with Hungary over Russian oil imports
Tesla
Halted most production at Shanghai plant to due parts shortage
Pfizer
Buying Biohaven Pharmaceutical for $11.6 billion, 78% premium
Earnings
Simon Property
Sony
Sysco
Fox
Warner Music
CRYPTO
Bitcoin fell below $30k for the first time since July 2021
The Fear & Greed Index is at its lowest point since January 24
And extreme fear is gripping the entire crypto market:
Selling has been dominated by short-term Bitcoin holders (read: paper hands) but the volume levels haven’t been as extreme as earlier in the year:
Terra’s blockchain stablecoin, UST, lost its dollar peg twice over the past 48 hours
Terra’s native token, LUNA, is down 75% from its highs
El Salvador has bought the dip (again):
MEME OF THE DAY
Upstart Holdings ($UPST) took a beating after earnings yesterday. Here’s a look under the hood at the moves driving the price action:
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