Operating at the Intersection of Technology and the Capital Markets
Tag: equities
Back on June 28th I wrote that the Fed was not removing liquidity from the system on a net basis (QT, BTFP, TGA drawdown, reverse repo market, bank reserves). Bank reserves are a great proxy for liquidity in the system. In fact, bank reserves were up 1.3% year-over-year on June 28th, meaning there was more … Continue reading Liquidity Is Falling
Investors finally figured out that ZoomInfo (ticker: ZI), wasn't really a long-term growth story and that once corporate buyers began to pull back on Sales & Marketing spend, ZI would feel the pain. Further, I've always questioned what ZoomInfo considered to be organic revenue. ZI's Q3 2023 Revenue outlook calls for approximately 7-8% revenue growth … Continue reading ZoomInfo (ZI) Won’t Be The Last Outlook Haircut
The equity market is too sanguine. Things feel too still. Could this be the calm before the storm, or, will another round of Fiscal stimulus and Fed easing abort the storm on the horizon, fiscal debt and inflation be damned? It is difficult to make a call on the fundamentals whether it be the price … Continue reading Nothing To See Here. Or Is There?
Natural Gas is historically cheap. Demand is not going to zero. Therefore, it makes sense to consider owning some in your portfolio. You run the risk that Natural Gas prices may go sideways for a while. However, there is certainly more upside reward than downside risk. I can't say the same for equities, even for … Continue reading Natural Gas Is Historically Cheap
Investors are crazy if they don't believe there is more air to come out of the Everything Bubble. With Infrastructure Software companies like SNOW trading at 22x forward Revenue.. With Analytics Services companies like PLTR trading at 8x forward Revenue and 34x Adj. EBITDA.. With companies like COIN trading at 5x trailing Revenue (who knows … Continue reading The Bubble Still Floats
Regardless of where CPI lands tomorrow, my view is that the Fed will hold rates higher for longer than the market believes. Higher interest rates combined with a shrinking money supply (QT), translates to: tighter monetary conditions, a higher cost of capital, less revenue visibility for companies, more employee layoffs and a deeper recession. The … Continue reading Tomorrow’s CPI = Noise
The market has felt speculative since year-end. Increases in equity options volume supports this view. Animal spirits have not been sufficiently stomped out by the Fed. December 2022 saw 797 billion in equity options volume. That metric increased to 851 billion in January 2023 as investors juiced positions with options trades (see chart below). It … Continue reading Options Volume On The Rise
Back to the office, equities will sell off. We expect that equities will trade off when investors return to the office in January in anticipation of soft earnings. Technology stocks will be hit the hardest. Another leg down on EPS reports. When earnings are reported in January and early February, there will be another leg … Continue reading Equities Over The Next 2-3 Months
There will be more equity market fallout. Historically, equity markets haven't found a bottom while the Fed is in a tightening cycle. I see the NASDAQ index falling to 9,000 during Q1 2023 as: 1.) the Fed tightens further; 2.) weak 2023 earnings guidance is provided on Q4 EPS calls; and 3.) global recession combine … Continue reading Equities Have A Tough 2023 Ahead
Equity indices have rallied today as reported Headline and Core CPI increased by "only" 7.7% and 6.3% Y-O-Y respectively. Many Technology names are up double-digit percentages today on this macro news despite the fact that many companies are cutting heads (it's not just CRM, LYFT, META, MSFT, NFLX, RDFN and SHOP), given the weak economic … Continue reading Sell This Rally
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