Market Noms — Curated Market Digest #20220427

Hello to all readers and welcome to Market Noms. I doubt there are any readers. This will serve as merely a collection of my thoughts as I review the day from both an investing and speculative standpoint. I hope to remain consistent in order to both sharpen my writing and keep myself disciplined. Thank you for coming.

The week of April 25th through April 29th serves as a very busy week for the US stock market as several heavyweight stocks reported earnings. $MSFT and $GOOG reported earnings yesterday evening while $FB reported today and $AAPL, $AMZN, and $TWTR will report tomorrow. $GOOG ended the day down 3.7% on the day and is now approximately where the stock was trading one year ago. As of writing, $FB is poised to see the largest one day gain since 2015. Currently, the stock is up 18% after-hours.

The S&P 500 continues to slide as it has for the past five days. On Thursday, April 21st, the index briefly found resistance near the 200-day SMA of around 4513 before plunging below the 50-day SMA and continuing its descent down to as low as 4162.9 today. So far, the low for 2022 year-to-date remains at 4114.65 some two months ago. Some mainstream media pieces are blaming the slide on COVID concerns from overseas in China, but it is very possible that inflation and recession concerns weigh heavily on the minds of investors and retail investors, especially, may have lost a bit of risk appetite over the past couple months.

U.S. treasury bonds continue its historic selloff as well with $TLT (the 20+ Year Treasury Bond ETF) down more than 16% YTD. This coincides with the going rate for 30 Year Fixed Mortgages which settled in at around 5.30% today. News reports have begun to circulate as early as last week of continued layoffs within the mortgage industry as the market remains turbulent. The job market is still being reported as strong, however, so we may have to wait and see if this industry will have any ripple effects into other industries.

Elon Musk was busy on Twitter today, clarifying a few stances he holds while the $TWTR $44 Billion buyout continues. Several Twitter executives are taking to the platform to bring to light the number of harsh comments and insults that they have been receiving while Musk lays out a few ideas such as his vision for the company’s policies regarding freedom of speech or end-to-end encryption coming to the platform’s direct messaging. Fun fact, it was announced yesterday that around $12 Billion of Musk’s purchase was collateralized and borrowed (on margin) against his position in $TSLA. If $TSLA were to drop 40%, Musk will be forced to repay this amount in cash. $TSLA fell around 12% yesterday and around half a percent today — something to keep an eye out for.

Ethereum failed to break over the 50-day SMA yesterday and was rejected from the 3038.60 level, plunging to as low as 2767. Bitcoin has not been faring much better, since being rejected at its 200-day SMA of 48234 a little less than a month ago. Bitcoin is still trading below 40000 as of writing today.

In the NFT space, a lot has happened since I last wrote. Namely, Yuga Labs, creators of the Bored Ape Yacht Club, has announced their new metaverse, Otherside, and the land auction to follow. Around one month ago, Yuga Labs had asked members of the NFT community to partake in a Know Your Customer-Your-Customer, or KYC, verification process that required submitting personal information about yourself, residence, and general identity. Now, in order to partake in the Otherside dutch-auction this weekend, it will be required to have passed a KYC check. The auction will also host transactions done fully through $APE, or ApeCoin. Yuga Labs had previously dropped its holders some amounts of this token and $APE traded around the $11–$12 mark throughout April before picking up some volume around the 20th and surpassing the previous ATH of 16.47 when it launched back in mid-March. As of writing, $APE is trading at 19.36.

Among other NFT projects, it seems that pixel art has become quite a trend with the likes of Moonbirds going on an absolute tear for the past two weeks, surpassing 110K volume in Eth on OpenSea. The floor price currently sits at around a very gaudy 25+Eth and each NFT promises private club membership and additional benefits for long term holders. There were a couple more pixel-related NFT projects that started gaining some momentum as their founders’ primary goals seemed to be centered around purchasing a Moonbird for their holder so that their community could receive access to this exclusive club. Derivatives of popular NFT projects remain a risky investment and it remains yet to be seen if any of these derivatives provide meaningful returns to its investors.

To conclude today’s post, I wanted to comment that as the war in Ukraine continues, that many things remain uncertain. China and Iran have declared deepened military cooperation today and as Anti-West sentiments seem to grow, the markets will likewise remain in flux. There still remains a couple blue-chip stocks yet to report earnings this week and this may help to maintain some price level for the broader US stock market. That being said, I worry for some of my past colleagues who are still working in the mortgage industry, I worry for the rate at which commodity prices may continue to rise and lastly, I worry for the millions of 401K retirement plans that have been slashed in the past few months. However, it does seem like things in the US may get worse before getting better.

Market Noms is not written by a financial advisor and is not financial advice. Please do your own research before investing in any type of security.