Dow Jones: 35,768 (+0.86%)
S&P 500: 4,587 (+1.45%)
Nasdaq: 14,490 (+2.08%)
Russell 2000: 2,077 (+1.56%)
Bitcoin: $44,580 (+0.79%)
Ethereum: $3,251 (+4.15%)
There goes Zuck… Meta (FB) finally rebounded from 52-week lows today, jumping 5.37% as the Nasdaq led the market rally for the second straight day.
From the year-to-date lows in January, the Nasdaq is up 8.52%, the S&P is up 6.02%, and the Dow is up 4.71%. Small caps in the Russell 2000 have rebounded 7.88% (including today’s near-2% gain).
Earnings: So far 60% of S&P 500 companies have reported earnings, and 77% have beat Wall Street estimates — including Disney, Uber, and MGM, which posted beats after-hours.
Gold: Bond yields cooled off slightly today, helping gold futures rise for the 4th consecutive trading day. YTD gold is up just 0.07%.
Crypto: Bitcoin and Ethereum moved higher with stocks as well as BTC trading volumes started to trend higher. XRP continued its bullish momentum towards $1 and rumor has it that BlackRock is getting ready to offer clients cryptocurrency trading.
Source: Heat Map & Sector Performance — Finviz.com
Welcome to the Shibaverse
Shiba Inu (SHIB) has been a very good boi recently… The memecoin is up nearly 60% over the past seven days and another 7% today alone! Much wow.
But that’s not where the Shib story ends. Contributing to the pump today was the exciting announcement that the Shiba Inu ecosystem will be expanding to the metaverse.
A ShibaSwap blog post, complete with “Woofs” and a Michael Scott quote, vaguely described the concept of the Shibaverse… a story that begins with Shiba Lands.
Shiba Lands: Similar to Decentraland and Sandbox, Shiba Lands are parcels of property that will be available for purchase or auction using the Shiba-ecosystem LEASH token. To limit “gas wars” and prevent people from using bots, holders of LEASH will be awarded spots in a queue system that controls the land sale.
- Of course, LEASH surged almost 50% in the 24 hours following the news.
But there’s still a lot that we don’t know… like what kind of utility Shiba landowners will have access to, what roles SHIB and LEASH will play in the Shibaverse economy, and even how the metaverse will look (although there’s a 12 second teaser clip here).
Nevertheless, the Shiba developers seem confident that they can reward long-time Shiba supporters as they venture deeper into the digital world.
“The Metaverse is set to be one of the biggest areas within crypto for many to enjoy…using it as another great resource to offer crypto communities incentivization, content, and regular royalties,” said Shiba Inu developers in the announcement.
Fun fact: The official @Shibtoken Twitter account now has 2.7 million followers (300k less than @dogecoin).
Retail Money is Going to a New Favorite Stock Sector…
Tired of taking brutal losses in tech stocks (*cough* Meta)? Well, apparently you’re not alone…
A new report from Vanda Research shows that retail investors are betting big on materials and energy stocks so far in 2022, with energy inflows coming in at their highest levels since Q2 2020.
(Remember: Retail piled into energy back in April 2020 when WTI crude futures dipped negative.)
So far in 2022, the energy sector (XLE) is up 20.33%. Compare that with tech (XLK) and communication services (XLC) down 6.53% and 8.11%, respectively.
Vanda Research highlighted a number of individual energy stocks that retail investors have been focusing heavily on.
- Top performers: Halliburton (HAL) and Occidental (OXY), up 36.10% and 29.75% respectively
- Net retail buys in Chevron (CVX) topped $22 million in past five days
- 13% of total volume in Devon Energy (DVN) came from individual buyers in past five days
- Marathon Petroleum (MPC) volume is up 123% from its average one month ago
But is it too late to get in?
With the huge gap in performance between tech and energy stocks in 2022, it seems like energy could be getting expensive, especially since the sector already surged over 47% in 2021.
However, strategists say that Brent crude oil contracts could “certainly” hit $120 per barrel if Russia invades Ukraine… and White House advisors say that an invasion could come “any day now.”
Right now, oil contracts are sitting right above $90 per barrel (representing a 33% upside move if the analysts are right).
Pelosi Capital Could Be Shutting Down Operations
In an interesting turn of events, House Speaker Nancy Pelosi just greenlighted a plan to prohibit members of Congress from trading stocks — which means (if legislation actually goes through) we won’t be able to copy her trades anymore.
Why the change of heart? Opponents to the ban have said that it would disincentivize the best recruits from running for office.
- But a recent survey found that 76% of voters think lawmakers and their spouses have an “unfair advantage” when it comes to trading stocks, and only 5% of voters approve of Congressmen being able to trade.
While the House Administration Committee gets working on drafting new rules, pretty much all the details are open for debate before a final vote. Here are the major ideas hitting the floor:
- Sell it all: one proposed plan would have all Congress members sell their entire portfolios and bar them from stock market investing as a whole (as well as likely take on a hefty tax bill)
- The Blind Trust: another option is for lawmakers to transfer all assets into a blind trust, making them unable to trade for themselves without having to fully cash out
Plenty of questions still remain, but a vote on proposed legislation is expected this year (likely before the midterm elections in November).
SpaceX Loses 40 of 49 Newly Launched Satellites to Space Storm
Uh oh, Elon Musk’s satellites are falling back down into Earth’s atmosphere…
Last Thursday, SpaceX launched 49 Starlink satellites — which are supposed to support Musk’s global high-speed internet project — into space from Florida, but 40 of them were “lost” by a solar storm that struck Earth’s atmosphere.
What happened? The unexpected solar storm added significant atmospheric drag to the Falcon 9 launch, basically pulling the satellites back down shortly after reaching low orbit.
But don’t worry — this isn’t part two of Netflix’s Don’t Look Up. According to a SpaceX statement, the satellites are designed to “demise upon atmospheric reentry,” meaning orbital debris won’t be crashing into anyone’s backyard this week.
Generally speaking, each mission launch will result in the deorbit of a few Starlink satellites here and there, “but to lose most of the batch is unheard of,” according to Harvard astrophysicist Jonathan McDowell. CNBC estimates the cost of the loss to be upwards of $50 million.
- Even so, SpaceX has been pretty successful with Starlink. To date, 1,900 Starlink satellites are in orbit and the service has attracted nearly 145,000 users.
In other Elon Musk news… Tesla is expected to begin production at its Berlin factory as early as mid-March. The CEO will be visiting Berlin in mid-February, according to a tweet last month.
MeetKevin “Ending My Channel”
Kevin dropped a video 10 hours ago that details some changes that he’s going to be making to his YouTube channel…
But first, he reflects on his controversial decision to sell 99% of his $20 million portfolio. Kevin says that he has #noregrets thus far, even though the market has been rebounding over the past two weeks. Here’s a quick breakdown of his reasoning:
The market cycle: He says markets aren’t pricing in the real risks we have (broader market cycle shift). In Kevin’s view, the real pain will come when the Fed discusses policy action as early as March 16, but may not reflect in the markets until as late as March 2023.
The inflation problem: Kevin doesn’t believe that prices will magically come down when supply chain tensions cool off (which seems to be what the bond market is pricing in).
- Household and corporate balance sheets are high, so 1% rate hike likely won’t do much to curb inflation
- Companies are very confident in their ability to raise prices without hurting demand (pricing power) meaning prices will likely stay elevated
In other words, Kevin doesn’t see that ‘deflationary environment’ caused by tech and innovation (that Cathie Wood always mentions) becoming a reality for another 4 or 5 years…
And as a result, he believes that there is a 60 to 70% chance of a recession in the United States over the next 6 to 12 months. Sheesh.
Big channel changes are coming… Kevin goes on to say that he will no longer be doing daily market open and close livestreams on YT. He’ll only be covering major news livestreams with course members from now on.
- But as far as other videos go, he didn’t make any mention of stopping regular posts altogether.
Lastly, Kevin mentioned an “exciting new venture” that he is conjuring up behind the scenes… But details are still vague.
“I’m still under the impression that I’m not making a mistake by sitting out of the broader technology sector and most US stocks right now. We’ll see. I might expose myself to emerging markets or to alternative assets, but in the meantime, I am being patient,” Kevin said.
Canopy Growth Corp (CGC) +15.08% – Canopy reported smaller than expected losses and better than expected revenue for the last quarter. Flower sales were down but vape and drink sales increased.
Affirm (AFRM) +14.45% – Affirm stock surged today ahead of earnings as the Nasdaq surged more than 2%.
Chipotle (CMG) +10.16% – Chipotle was able to beat on earnings and meet revenue expectations. They also announced price increases due to higher labor and food costs.
CVS (CVS) -5.45% – CVS beat on earnings this morning on both revenue and earnings, forward guidance was reiterated rather than raised, assumably causing the drop.
Digital World Acq. (DWAC) -1.37% – DWAC continues to cool down from its recent massive bull run as delays for Truth Social are expected.
Exxon Mobil (XOM) -1.36% – Exxon has been slumping recently since oil prices hit a high of $90 and then stalled.
General Motors (GM) – Nomura downgraded General Motors from buy to neutral saying “cost clouds are on the horizon.” “However, in the near term, we expect the transition to EVs to limit profit growth for the reasons mentioned above, and thus we downgrade the stock to Neutral.”
Peloton (PTON) – JPMorgan reiterates Peloton as overweight saying the company is on the “incrementally positive” path forward. “But we continue to believe there is secular growth in connected fitness, and Peloton will be the leader in the space as pandemic pull-forward effects subside.”
Virgin Galactic (SPCE) – Bernstein reiterated Virgin Galactic as market perform but revised its price target down from $22 to $10. “With the stock down over 80% vs. prior peaks of ~$55-60 in February and June 2021, we view staff retention and access to capital as potential risks.”
Quote of the Day: “Surround yourself with people trying to shape the future.” – Cathie Wood
Fun Fact: A 2009 study by chemist Yuegang Zuo of the University of Massachusetts Dartmouth found that 85 percent to 95 percent of paper money in circulation contains traces of cocaine.
- Kevin O’Leary announces he’s buying the dip on Meta Platforms
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- NFL moves deeper into the Metaverse with Roblox partnership