Regulating Crypto

Regulating Crypto

All Central Banks wish to control the money supply. The Federal Reserve is no different. To date Bitcoin and Ethereum alone are off approximately $1.4 Trillion from their collective peak (this type of inflation is not captured in CPI statistics nor in the velocity of money - which helps explain why velocity did not accelerate … Continue reading Regulating Crypto

GDP, Inflation, Yields, Currency & 2023 Earnings

GDP, Inflation, Yields, Currency & 2023 Earnings

Real GDP: If the Atlanta Fed is correct, Q3 will be the third consecutive weak GDP quarter given the bank's Q3 Real GDP estimate of 0.3%, which follows two consecutive negative Real GDP quarters.Inflation: We expect inflation to be sticky when the CPI is reported on October 13th. Core CPI will remain elevated largely due … Continue reading GDP, Inflation, Yields, Currency & 2023 Earnings

The U.K. Is Not In An Enviable Position

The U.K. Is Not In An Enviable Position

The Bank of England will likely institute an emergency rate hike of 25-50 BPS today in our opinion as the Pound plummets against the USD (FX Headwinds Will Persist Into 2023). What is fascinating is that the fiscal side loosened policy last week as U.K. Prime Minister Liz Truss pushed tax cuts. Conversely, the monetary … Continue reading The U.K. Is Not In An Enviable Position

$95 Billion Per Month In QT Is A High Bar

$95 Billion Per Month In QT Is A High Bar

The Fed was to have achieved a $95 billion per month Balance Sheet reduction run rate by September ($60 billion of Treasury securities and $35 billion of mortgage-backed securities). The culling of $60 billion in Treasuries per month is going to be difficult to execute. The Treasury market lacks liquidity as evidenced by the sharp … Continue reading $95 Billion Per Month In QT Is A High Bar

FX Headwinds Will Persist Into 2023

FX Headwinds Will Persist Into 2023

Higher U.S. interest rates will continue to ensure that capital will flow disproportionately into U.S. Dollars at the expense of other countries and currencies. For companies that sell into the U.K., Germany, western Europe in general as well as Japan, this means that Reported Revenue will be haircut in future quarters as local currency is … Continue reading FX Headwinds Will Persist Into 2023

The NASDAQ Could Re-Test COVID Lows & The Rise of High Yield

The NASDAQ Could Re-Test COVID Lows & The Rise of High Yield

Could the NASDAQ re-test the COVID lows of March 2020 when it sat around 6,900? Yes. That would require a prolonged recession (which we expect) AND The Fed not restarting its ultra-dovish monetary policy of Quantitative Easing combined with a near zero Fed Funds Rate. Who knows how the Fed will behave in 2H 2023 … Continue reading The NASDAQ Could Re-Test COVID Lows & The Rise of High Yield

It Always Makes Sense To Invest In Quality Names

It Always Makes Sense To Invest In Quality Names

Many Technology investors got religion on August 26th as it relates to interest rate increases (more to come) and a Fed pivot (not any time soon). The message of "higher for longer" was reiterated yesterday by Fed Chair Powell. The Fed tends to undershoot when it comes to inflation and its Fed Funds target. We … Continue reading It Always Makes Sense To Invest In Quality Names

Is META Cheap?

Is META Cheap?

Whether of not META shares are inexpensive depends upon what you believe 2023 and 2024 estimates will look like. We believe the global macro environment will soften for the remainder of this year and next and that META's numbers over the next few quarters will reflect this difficult macro demand environment. META is in the … Continue reading Is META Cheap?

The Fed: Death By A Thousand Cuts

The Fed: Death By A Thousand Cuts

We had a saying on the sell-side to describe companies that would continually lower guidance each quarter rather than get all of the dirt out in the wash at once (this was pre-2005 before companies mastered the art of guidance). The Federal Reserve did not get the memo. The Fed raised its policy rate by … Continue reading The Fed: Death By A Thousand Cuts