United States

Cohn Robbins Holdings Corp. (CRHC: warrants closed Friday’s session at +8.9%) & Allwyn Entertainment
Wynn Resorts scrapped the blank-check merger [with Austerlitz Acquisition Corp I (AUS)] last November, citing promotional spending in the US sports betting industry.
Merger Vote Set: Novus Capital Corporation II (NXU) & Energy Vault: 2/10

U.S. Equity Strategy: Index Supports Breaking; Upgrading and Buying Utilities

By Joe Jasper

Indexes continue to violate our key supports as the Russell 2000 (IWM) broke below $208, the S&P 500 broke below 4495, and the equal-weighted Nasdaq 100 (QQEW) broke below $109.
This type of damage paints a bearish picture at the index level, and will take some time to repair.
Now that key supports have been violated, we are monitoring for oversold conditions that could mark a bottom, and it is possible that was yesterday (Jan. 24).

IPAR: 2021 Momentum Continues in 2022

IPAR updated its fourth quarter 2021 outlook by raising its sales forecast for the period. IPAR’s management had expressed caution when IPAR reported third quarter results
IPAR is forecasting Q4 sales of $210.8 million compared to our estimate of $144.7 million. The initial guidance IPAR had provided was conservative and based on limited clarity
IPAR remains one of our favorite growth stories in 2022. IPAR has expanded its brand portfolio and has a fragrance lineup that should result in sales growing by double digits

Sporting Crypto: The Artificial Intelligence Football Association

By Sporting Crypto

ASM’s (Altered State Mind) latest project; AIFA (Artificial Intelligence Football Association), is truly fascinating
ASM’s headline is ‘Make trainable AI-powered agents. Own and trade them using NFTs’
AIFA is an animated NFT collection, where the characters are useable in the AIFA-verse to play a 4vs4 football game

Before it’s here, it’s on Smartkarma

Jan 25

United States: Crude Oil, Ethereum, Dow Jones Industrial Average, Nasdaq-100 Stock Index, US Treasury (10 Yr Generic), Cohn Robbins Holdings Corp, Clearfield Inc, Asia High Yield Bond Index, HashiCorp, Opendoor Technologies and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

OIL MACROS: Snowballing Supply Worries May Keep Prices Elevated
Crypto Weekly – Web 3 and Selfie Monetization
Dow Jones – Spooky Chart Update I
NDX Low Due This Week – 15,500 the Level to Mend the Damage
Alpha Bites: Performance Summary of Trade Recommendations in FX and Rates – January 2022
Going through withdrawals
CLFD: Dropping Coverage, 32% Return in 4 Days
Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
Liquidity Risk Short Candidates: HashiCorp, Fluence Energy, Rivian Auto, Domo Inc.
Could SPACs Be a Contrarian Bet in 2022?

OIL MACROS: Snowballing Supply Worries May Keep Prices Elevated

By Vandana Hari

Demand cheer and supply fear have become the major drivers behind crude’s spike to 7-year highs.
Escalating tensions between the US and Russia over Ukraine are a major trigger for a fear premium. But a military conflict and supply disruption is not our base case.
Constant OPEC+ output shortfall and a thinning cushion of OECD stocks makes the market ultra-sensitive to any actual or feared supply disruptions.

Crypto Weekly – Web 3 and Selfie Monetization

Crypto continues to drawdown due to tightening, however, the industry continues to grow with several large VC fund raises underway such as a16z’s $4.5 billion dollar fund
Web 3 is a hot topic and we explore how several entrepreneurial individuals have monetized their selfies for millions
We also explore LooksRare’s potential to disrupt Opensea and their potential 2022 public listing

Dow Jones – Spooky Chart Update I

This chart draws a fascinating historical comparison between the behaviour of the stock market today with that seen 100 years ago around the Spanish Influenza
It clearly shows that what we are seeing today has some sort of reflection of the past
We have fresh developments that indicate further weakness for Equities [relative to Gold]

NDX Low Due This Week – 15,500 the Level to Mend the Damage

By Thomas Schroeder

NDX break below trendline and price support at 15,300 did open Pandora’s box and was touted as a key risk driver for a global sell off into late January.
NDX 14,300/100 low zone to kick off a recovery rise in February. We prefer the DJI near 34k and SPX near 4,350. Late January cycle low timeline in focus.
NDX underside of broken trendline at 15,500 is the level to re take to mend the technical damage – a tall order at this stage.

Alpha Bites: Performance Summary of Trade Recommendations in FX and Rates – January 2022

By Gautam Jain, PhD, CFA

In my monthly recap note, I provide a performance update of my weekly trade recommendations in emerging markets FX and rates.
Of the total of 31 trade recommendations made so far, I have recommended closing 21 of which 17 were in the money.
I also go over my open trade recommendations as well as those that I have closed recently.

Going through withdrawals

There have been 9 SPAC registrations withdrawn in 2022 to date
Don’t worry about the fallen SPACs, though. SPACs are like The Immortals… when one falls there is another to take its place. There have been 11 new SPAC registrations in 2022.
Cohn Robbins Holdings Corp. (CRHC: warrants +8.9%) & Allwyn Entertainment

CLFD: Dropping Coverage, 32% Return in 4 Days

We are electing to close out our Sell Rating on Clearfield (CLFD) after an unprecedented market response to our initiation.
In less than 4 trading days, CLFD’s stock has declined by approximately 32.3 percent
We see less of a reason to maintain coverage when the market has priced in for the business risks we had originally highlighted.

Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers

US equity markets dropped yet another day on Friday, with the S&P and Nasdaq down 1.9% and 2.7% as the risk-off sentiment continued to weigh on markets. Most sectors were in the red with Communication Services and Consumer Discretionary down 3.1% and 3.9%. US 10Y Treasury yields were flat at 1.77% after easing 8bp on Thursday. European markets closed mostly higher with the DAX and CAC down 1.9%, 1.8% and 1.2%. Brazil’s Bovespa closed 0.2% lower. In the Middle East, UAE’s ADX was up 0.3% and Saudi TASI was down 1.1%. Asian markets have broadly opened in the red – HSI, STI and Nikkei were down 1%, 0.1%, 0.6% while Shanghai was up 0.2%. US IG CDS spreads were 1.1bp wider and HY CDS spreads were 5.7bp wider, EU Main CDS spreads were 1.7bp wider and Crossover CDS spreads were 7.9bp wider. Asia ex-Japan CDS spreads were 1.5bp wider.

Liquidity Risk Short Candidates: HashiCorp, Fluence Energy, Rivian Auto, Domo Inc.

By Eric Fernandez, CFA

Liquidity shorts can be great short candidates. The key characteristic is that the company may not be viable, economically, given their cash flows and cash requirements.
Liquidity shorts have built-in catalysts, have moderate to higher betas, and can have strong down moves if a crisis develops. They can go bankrupt, pushing the stock price near zero.
HashiCorp Inc (HCP), Fluence Energy (FLNC), Rivian Auto (RIVN), Domo Inc (DOMO)

Could SPACs Be a Contrarian Bet in 2022?

After a Boom that lasted nearly 18-month, SPACs are now finding themselves under fire.
Increasing amounts of Scrutiny from regulators, A Mismatch in Incentives towards Sponsors, and Burnout in new deals by Investors have all contributed to the recent slump.
A majority of the high-growth De-SPACs have already seen a sharp selloff, leading to a drop of between 40-60%.

Before it’s here, it’s on Smartkarma

Jan 23

United States: Bitcoin and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Bitcoin’s Break Lower Is Warning Sign for Equities

Bitcoin’s Break Lower Is Warning Sign for Equities

The break below 29k leaves the way open for at least 29k if not 20k (45% lower)
It’s recent correlation to US equities suggests further pain ahead for stocks
Ultimately this looks like nothing more than a pure speculative market that went too far with too much excitement and is now on it’s way back down to Earth

Before it’s here, it’s on Smartkarma

Jan 22

United States: Netflix Inc, ROBLOX Corp, Gores Guggenheim, Silver, Intel Corp, Falcon Minerals, Silver Spike Acquisition Corp II, Immersion Corporation, Collegium Pharmaceutical, Asia High Yield Bond Index and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Netflix 4Q21: Don’t Look Down
Roblox ($RBLX) – Deep Dive
Polestar Is The Dark Horse in the EV Race
Silver: Initial Target Met, However..
Intel: Well-Positioned To Compete But Hardly A Short-Term Play
Falcon Minerals: High Quality Royalty Trust at a 30% Discount
The Nightcap from SPAC Track
Immersion: The Market Leader Of Haptic Technology Plunged By 33% In 6 Months
COLL: Risks Abundant with No Guidance
Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers

Netflix 4Q21: Don’t Look Down

By Aaron Gabin

Shockingly poor 1Q subscriber guidance implies 9M net adds for 2022, well below the ~25M level investors are accustomed to, implying saturation, competition, or both. (We think both)
Operating Margin guidance cut blamed on FX, we think more likely the demand for heightened content spend due to competition.
Netflix valuation always built on a long term DCF…very sensitive to downward revisions in subscribers and ARPU…we think Netflix settles around $400 until it can disprove bear thesis.

Roblox ($RBLX) – Deep Dive

By MT Capital

In order to understand the opportunity in front of Roblox it is important that we understand the scale of Gaming as a whole
The three main components of the Roblox Platform are the Roblox Client, the Roblox Studio and Roblox Cloud
Roblox has a fully functioning economy contained within its universe

Polestar Is The Dark Horse in the EV Race

2021 was the year of EV Stocks, with automakers raising large sums of money without any vehicle deliveries or revenues.
Swedish EV Maker Polestar is the latest in a long list of EV makers to go public through a SPAC, but there’s more to this deal than first meets the eye
Polestar is set to make its public debut at a critical juncture in the nascent EV Market where Tesla has captured a lion’s share and the competition is struggling to scale

Silver: Initial Target Met, However..

The initial target on Silver was the 200 day moving average which has now been met
This moving average limited the gains on the previous two occasions so a close above if seen would be another bullish sign
What has also happened overnight however is that we have taken out a multi week & month trend resistance which suggests further gains

Intel: Well-Positioned To Compete But Hardly A Short-Term Play

By Vladimir Dimitrov, CFA

From a market point of view, Intel’s risk-reward profile appears more compelling than many of its high-flying peers.
From a business perspective, the company will likely continue to suffer in the short-term, however, strategic positioning is still strong.
What has historically been Intel’s weak spot could prove to be its key competitive advantage over the coming years.

Falcon Minerals: High Quality Royalty Trust at a 30% Discount

By Turtles all the way down

Falcon Minerals (FLMN) is a royalty trust whos primary asset was the Karnes trough in the Eagle Ford shale
This is one of the lowest breakeven oil reservoirs in the US with a 10+ year drilling inventory with high quality large operators
It seems to have mostly traded at a discount to other royalty trusts. Probably because it has a much smaller asset base, and management with a spotty track record.

The Nightcap from SPAC Track

Silver Spike Acquisition Corp II (SPKB: warrants -5.6%) & Eleusis
SCVX Corp. (SCVX), a publicly traded Special Purpose Acquisition Company , has announced today that it has entered into a non-binding letter of intent (“LOI”) for a business combination
Vistas Media Acquisition Company (VMAC) releases merger vote and redemption results for its previously approved merger with Anghami

Immersion: The Market Leader Of Haptic Technology Plunged By 33% In 6 Months

By Moat Investing

The haptic technology industry is expected to grow at a CAGR of 14.5% from 2021 to 2027 according to PR Newswire.
IMMR issues with management, investor relations management, and litigations is limiting the value of the stock.
Immersion is putting less money into R&D, making some investors worried onto whether it will have a sustained strong future as market leader in haptic technology.

COLL: Risks Abundant with No Guidance

COLL has yet to issue their annual revenue forecast after three consecutive years of providing such guidance, leading us to assume 2022 could be challenging than current consensus estimates imply
XtampzaER revenue declined in third quarter 2021 with COLL facing difficulty in getting physicians to switch prescriptions. The slowdown in XtampzaER revenue has been the core of our investment thesis
COLL has a balance sheet liability of $191.7 million related to rebates, returns, and discounts. This liability has grown faster than revenue

Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers

US equity markets dropped yet another day with the S&P and Nasdaq down 1.1% and 1.3% as risk-off sentiment continued to weigh on markets. Most sectors were in the red with Consumer Discretionary, Materials and IT down 1.3-1.9%. US 10Y Treasury yields eased 8bp to 1.77%. European markets closed mostly higher with the DAX and CAC up 0.7% and 0.3% while FTSE was down 0.1%. Brazil’s Bovespa closed 1% higher. In the Middle East, UAE’s ADX and Saudi TASI were up 0.8% and 0.3%. Asian markets have opened in the red – Shanghai, HSI, STI and Nikkei were down 0.8%, 0.6%, 0.1% and 1.4%. US IG CDS spreads were 1.6bp wider and HY CDS spreads were 7bp wider, EU Main CDS spreads were 0.1bp tighter and Crossover CDS spreads were 0.6bp tighter. Asia ex-Japan CDS spreads were 1.6bp wider.

Before it’s here, it’s on Smartkarma

Jan 21

United States: S&P 500, Moderna Inc, Bitcoin, TerraUSD, Peloton Interactive, Clearfield Inc, US Treasury (10 Yr Generic), Power & Digital Infrastructure Acquisition Corp, Asia High Yield Bond Index, Texas Pacific Land Trust and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

US Equities: A Small Squeeze?
Is It Time For Moderna To Boost Share Buyback And Start Paying Dividends?
2022: The Supercycle Year
Stablecoin Part 2 – History of Stablecoins and the Best Stablecoin Yield Opportunities
Peloton and the Kiss(es) of Death
CLFD: Not so Clear Field, Initiating with Sell
What to Expect of EM Rates When Expecting US Rates to Stay Volatile?
The Nightcap from SPAC Track
Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
TPL: Rising Production, Raising Estimates

US Equities: A Small Squeeze?

Both the S&P 500 and the Nasdaq 100 have hit decent supports
This has come after the rise in yields has started to slow down
At this stage it appears at least a short term bounce may be seen. It is too soon to determine anything more than that

Is It Time For Moderna To Boost Share Buyback And Start Paying Dividends?

By Andrei Zakharov

Shares of Moderna Inc (MRNA US) underperformed and fell ~32% YTD. Investors continued to cut exposure to stocks of COVID vaccine makers, including BioNTech, Novavax, CureVac, among others.
In August 2021, Moderna announced the first share buyback plan. The company’s Board of Directors has authorized share repurchase for up to $1 billion with an expiry date in 2023.
We estimate Moderna may end 2021 with a total of ~$18.5 billion in cash, cash eq., investments and expect the company may boost share buyback in the future.

2022: The Supercycle Year

By Coinstack

We share our thoughts on why 2022 may be a great year for digital assets.
During a bullish 2021 we saw Bitcoin increase in price 58% and Ether increase in price 400%.
I expect this may actually turn out to be a positive year for the assets with the most growth, utility, and cashflows

Stablecoin Part 2 – History of Stablecoins and the Best Stablecoin Yield Opportunities

We explore the notion that stablecoins existed even before crypto was invented and shows the difficulties of creating a monetary medium with zero volatility
We show that the supply of stablecoins has grown 27x over the past 2 years and breakdown the history of stablecoins and their modern-day use cases
We demonstrate a strategy to generate 20% returns on stablecoins using TerraUSD (UST CURNCY) and Anchor Protocol

Peloton and the Kiss(es) of Death

By Investment Talk

As I perused the headlines yesterday, I came across a CNBC article that suggested Peloton would be hiring McKinsey to “review its cost structure and potentially eliminate some jobs”.
Whilst Foley is not likely to be sleeping with fishes anytime soon, the CNBC report suggests that 12% of Peloton’s physical store count might be on the chopping board
Whilst I still continue to believe Peloton will have success in their market over the longer term, this does not equate to attractive shareholder returns

CLFD: Not so Clear Field, Initiating with Sell

CLFD has been the beneficiary of communication service providers investing in their broadband networks to meet an increase in data traffic.
The events of the last two years, namely the COVID-19 pandemic causing work/learn from home and Huawei and ZTE equipment replacement, were the reason for the boom CLFD has experienced.
CLFD’s community broadband customer was incentivized to replace Huawei and ZTE equipment with reimbursement checks from the FCC.

What to Expect of EM Rates When Expecting US Rates to Stay Volatile?

By Gautam Jain, PhD, CFA

The risk of US yields continuing to rise is high especially with inflation not having peaked yet, the Fed potentially reducing its balance sheet, and real rates still negative.
The high volatility in US rates does not bode well for EM rates due to their high correlation even though EM local debt is overall cheap based on most metrics.
Until the volatility in US rates subsides, it is best to focus on cross-country and curve trades in EM, with my preference for curve steepening trades in several countries.

The Nightcap from SPAC Track

Power & Digital Infrastructure Acquisition Corp. (XPDI) shareholders approved its merger with Core Scientific
Vistas Media Acquisition Company Inc. (VMAC) shareholders approved its merger with Anghami
ACE Convergence Acquisition Corp. (ACEV) announces a $200M convertible note consisting of $175M in new financing from Oaktree and $25M from an ACE investment partner

Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers

US equity markets dropped again after with the S&P and Nasdaq down 1% and 1.2%. The latter is down 10% from its November 2021 high. Most sectors were in the red with Consumer Discretionary, Financials and IT down 1.4-1.8%. US 10Y Treasury yields eased 3bp to 1.85%. European markets closed higher with the DAX, CAC and FTSE up 0.2%, 0.6% and 0.4% respectively. Brazil’s Bovespa closed 1.3% higher. In the Middle East, UAE’s ADX and Saudi TASI were up 1.6% and 0.5%. Asian markets have opened broadly higher – HSI, STI and Nikkei were up 1.9%, 0.1% and 0.5% while Shanghai was down 0.2%. US IG CDS spreads were 0.6bp wider and HY CDS spreads were 3.5bp wider, EU Main CDS spreads were 0.1bp tighter and Crossover CDS spreads were 1.7bp tighter. Asia ex-Japan CDS spreads were 4.7bp tighter.

TPL: Rising Production, Raising Estimates

TPL remains unhedged to the price of crude oil with Permian Basin output rising. Total output in the Permian Basin is projected to surpass 5 million barrels per day
The increase in output would have an immediate benefit to TPL in the form of royalties and could generate incremental water and surface land easement revenue
TPL’s stock has been selling off with the broader market in what we speculate could have to do with no action from TPL’s Board after the annual shareholder meeting

Before it’s here, it’s on Smartkarma

Jan 20

United States: Microsoft Corp, Silver, Teladoc Health, Inc., US Treasury (10 Yr Generic), Atkore Inc, Social Capital Suvretta Holdings Corp and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Microsoft’s Activision Acquisition Is a Stupendous Deal
Microsoft – Thinking Through the ATVI Acquisition Further
Silver’s Bullish Break
Teladoc (TDOC US): Membership Add and Expanding Product Penetration to Drive 25–30% Top Line Growth
U.S. Equity Strategy: Market Sending Mixed Signals; Stick With Value; Energy Stocks Highlighted
Review of Current Short Ideas
The Nightcap from SPAC Track

Microsoft’s Activision Acquisition Is a Stupendous Deal

By Aaron Gabin

A blizzard of cost synergies we conservatively estimate at $500MM from lower distribution commissions, hosting costs, and cutting ATVI’s highly paid C-Suite.
Multiple strategic benefits: Catalyzes Microsoft’s XCloud streaming game service and Game Pass subscription offering….potentially offers greater leverage for app store negotiations with Apple and Google.
Accretive on valuation alone…MSFT is paying a 10% discount to ATVI’s 23x average forward PE from last few years. MSFT’s 11x forward P/S vs. ATVI’s 5.5x revalues ATVI’s revenues 2x.

Microsoft – Thinking Through the ATVI Acquisition Further

By Mio Kato

Our initial thoughts on Microsoft’s bid for Activision Blizzard were on the sceptical side given various signs of trouble at the company.
In contrast the majority of commentary on the deal has been somewhere between positive and euphoric though there are monopoly concerns from customers.
Yet the more we examine the implications the less we like this deal for Microsoft.

Silver’s Bullish Break

Silver’s rally through& close above $23.43 amounts to a bullish break which should open the way for a move to at least the 200 day moving average, currently at $24.63.
The more important level from a medium term perspective is $25.40
What is quite note-worthy is that the recent rally came on a day when the USD was higher

Teladoc (TDOC US): Membership Add and Expanding Product Penetration to Drive 25–30% Top Line Growth

By Tina Banerjee

Teladoc Health, Inc. (TDOC US), the whole-person virtual care industry leader in scale, clinical breadth, and outcomes, reported 70% revenue CAGR over the last three years.
The company expects 25% annual expansion in revenue per member, which together with 1–5% per year growth in membership will lead to 25–30% revenue CAGR during 2021–2024.
Teladoc has a strong growth opportunity amid a large TAM of 298 million total insured lives in the U.S., of which the company has penetrated just 30%.

U.S. Equity Strategy: Market Sending Mixed Signals; Stick With Value; Energy Stocks Highlighted

By Joe Jasper

The market continues to send a mix of risk-on and risk-off signals, though most of the risk-on signals are centered around value Sectors.
Value Sectors such as Energy, Financials, Manufacturing/Industrials, and Materials are currently our favorite areas for investment, and also Consumer Staples.
Some of our big picture supports are being violated, including the Russell MicroCaps (IWC) which is breaking below $134 as the Russell 2000 (IWM) tests support at $207.50-$208.

Review of Current Short Ideas

By Eric Fernandez, CFA

This presentation runs through six current short ideas presented on a Smartkarma webinar on 22nd December.
These are: Atkore (ATKR), Danaher (DHR), Service Corp International (SCI), ABM Industries (ABM), Monro (MNRO), and Renewable Fuels (REGI).
The presentation also summarizes Two Rivers’ short idea generation process.

The Nightcap from SPAC Track

Social Capital Suvretta Holdings Corp. III (DNAC: no warrants, common +0.01%) & ProKidney
Vishal Garg, founder and CEO of digital mortgage lender Better, [merging with Aurora Acquisition Corp. (AURC)] is staying on as CEO
Shares of SoFi rallied as more than 16% in after-hours trading on Tuesday following news that the fintech cleared its final regulatory hurdle in becoming a bank.

Before it’s here, it’s on Smartkarma

Jan 18

United States: USD Coin, Crude Oil, Elastic NV, Digital World Acquisition, Fiserv Inc, Asia High Yield Bond Index, International Business Machines, Russell 2000 Index and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Stablecoin Part 1 – The Game Changing Tech in Crypto and a Real World Arb Trade
Weekly Oil Views: Crude Looks past Omicron as Data Validates Mild Impact Expectations
Crude Oil: Levels Are There to Be Broken
Elastic: High-Profile Search Company With Attractive Fundamentals
Is Trump’s Social Media Platform Really Worth $12.8 Billion?
Fiserv – Investing In Transforming Leaders Rather Than Disruptors
Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
IBM: A Rising Tide Lifts All Boats
Hindenburg Omen and Q1 Inflection Catalysts

Stablecoin Part 1 – The Game Changing Tech in Crypto and a Real World Arb Trade

Stablecoins are the critical $170 billion dollar sector that is the key building block for the entire $2 trillion dollar crypto asset class with increasing attention from regulators
In part 1, we explore some real world case studies on problems that stablecoins solved for crypto such as stability of payments to vendors, and the enabling of lending
We also present a (almost) risk-free arb where traders pay 1.5% to borrow USD and receive 9% on stablecoin dollars

Weekly Oil Views: Crude Looks past Omicron as Data Validates Mild Impact Expectations

By Vandana Hari

Crude has rallied to 12-week highs as the market is looking past the Omicron wave, setting sights on a strong summer demand rebound.
The view is supported by data, prominently from the UK, which is past its Omicron peak. The wave was bigger than the Delta much much shorter and far less lethal.
Upgraded demand expectations are focusing attention back on reliability of supply and the growing shortfall in OPEC+ output against its target is a major worry.

Crude Oil: Levels Are There to Be Broken

Oil is testing & threatening to take out the trend high at $86.70
A number of levels converge in this area that extend up to $89.58
A breach of that zone would open the way for further gains to the tune of 20%-30%.

Elastic: High-Profile Search Company With Attractive Fundamentals

By Andrei Zakharov

Elastic NV (ESTC US) has grown its ARR from ~$207 million as of Jul-18 to ~$760 million today and may become a multi-billion dollar unicorn in the future.
We like the subscription-based freemium business model, strong net expansion rate, and acceleration in revenue growth of Elastic Cloud business, which currently represents ~33% of total revenue.
Elastic Search is one of the most popular search engines globally, and the company’s products have been downloaded more than 350 million times since 2013.

Is Trump’s Social Media Platform Really Worth $12.8 Billion?

Opinion about Trump Media and Technology Group (TMTG) is as polarising as Trump himself, and widely vary based on political affiliation.
The platform could see a potential user base of around 35-50 million (for reference, 70 million voted for Trump in the 2020 election)
Even if the company manages to hit its user & revenue targets, the stock seems to be trading at a lofty valuation to consider at the moment.

Fiserv – Investing In Transforming Leaders Rather Than Disruptors

By Vladimir Dimitrov, CFA

Fiserv is valued as a slow-growth and low return on capital legacy business, although this does not appear to be the case.
At present, the expected topline growth rate is far from spectacular, but parts of the business are growing fast and could result in a multiple repricing.
Due to the acquisition of First Data, the company’s improving profitability is a better measure of business performance than return on capital is.

Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers

US equity markets ended slightly higher on Friday with the S&P and Nasdaq up 0.1% and 0.6% respectively. Sectoral gains were led by Energy and IT, up 2.5% and 0.9% while losses were led by Real Estate and Financials, down 1.2% and 1%. US 10Y Treasury yields were up 9bp to 1.79%. European markets were lower on Friday with the DAX, CAC and FTSE down 0.9%, 0.8% and 0.3% respectively. Brazil’s Bovespa was up 1.3%. In the Middle East, UAE’s ADX was flat and Saudi TASI was up 0.3% on Sunday. Asian markets have opened broadly higher following – Shanghai, STI and Nikkei were up 0.6%, 0.1% and 0.8% while HSI was down 0.6%. US IG CDS spreads were 0.3bp wider and HY CDS spreads tighter 0.4bp. EU Main CDS spreads were 1.3bp wider and Crossover CDS spreads were 4.1bp wider. Asia ex-Japan CDS spreads widened 3.5bp.

IBM: A Rising Tide Lifts All Boats

By Vladimir Dimitrov, CFA

Even though IBM shares ended 2021 in the green, total return was very disappointing on a risk-adjusted basis.
Kyndryl shareholders were severely punished, and prospects for the company remain rather bleak.
2022 will be a critical year for IBM’s management to prove that it could turn the business around.

Hindenburg Omen and Q1 Inflection Catalysts

By Thomas Schroeder

The Hindenburg Omen is a bit of a controversial indicator but when combined with chart break points/catalysts, it becomes are more reliable set up with timing constraints.
Breadth deterioration is a key component for top building. NDX 15,300 and Russell 2,100 major inflection supports hang in the balance.
Late January cycle associated with false breakouts but will give us a preview of what lies ahead in Q2 if we manage re take support pivots.

Before it’s here, it’s on Smartkarma

Jan 17

United States: Tether, Citigroup Inc and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Crypto Weekly: Will Hong Kong Be the Macau of Crypto?
Citigroup – Many Moving Parts and Confused Mexican Exit

Crypto Weekly: Will Hong Kong Be the Macau of Crypto?

HKMA released a discussion paper on the regulation of stablecoins in Hong Kong which seems to suggest a divergence in regulatory approach towards crypto from China’s current stance
China has historically allowed banned activities from the mainland to operate in a controlled environment such as gaming in Macau
We explore the potential that HK is the perfect firewalled environment where crypto could be allowed to develop without contagion for the rest of China

Citigroup – Many Moving Parts and Confused Mexican Exit

By Thomas J. Monaco

Weaker Result Across Almost All Geographic Segments – Led By Negative Jaws;
Credit Modestly Weaker, Although Reserve Coverage Remains Strong. Watch For Credit Turn; and
Progress On Asian Consumer Exits, But Sea Change In View On Mexico.

Before it’s here, it’s on Smartkarma

Jan 16

United States: Razer Inc and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Asia-Pac Weekly Risk Arb Summary: Razer, Crown Resorts, Katakura, Ausnutria, API, Irongate

Asia-Pac Weekly Risk Arb Summary: Razer, Crown Resorts, Katakura, Ausnutria, API, Irongate

By David Blennerhassett

There are currently 45 – mostly firm – transactions currently being discussed and analysed on Smartkarma.
One new deal discussed this week – SASAC-backed Hubei Ports’ tilt for China Infrastructure & Logistics Group (1719 HK).
There were updates for Crown Resorts (CWN AU), Razer Inc (1337 HK), Australian Pharmaceutical Industries (API AU), Katakura Industries (3001 JP), and Irongate Group (IAP AU).

Before it’s here, it’s on Smartkarma

Jan 15

United States: Tesla Motors, Nasdaq-100 Stock Index, Dow Jones Industrial Average, Asia High Yield Bond Index, Gores Holdings IX, SilverBox Engaged Merger Corp I and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Tesla’s China Syndrome Will Spread
NDX Trendline Is the Risk Inflection that Would Change Course
Dow Jones – The Spooky Chart
Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
These Dealmakers will Make or Break SPACs in 2022
The Nightcap from SPAC Track
Tesla Cybertruck Delay Confirmed to Mid-2023—at Least.

Tesla’s China Syndrome Will Spread

By Vicki Bryan

Tesla sold more cars in China in Q4 2021 than anywhere in the world.
Model Y ramp-up continues, until it doesn’t, while Model 3 struggles even harder to keep up.
Also true: Tesla is still losing market share in China—and every other key market.

NDX Trendline Is the Risk Inflection that Would Change Course

By Thomas Schroeder

NDX is dangerously close to a meaningful break below macro trendline and price support that would induce downside pressure on supports in other key indices.
NDX Pivot support break would set in motion a downward spiral in the DJI and SPX as well as the global risk cycle. On alert!
Late January a weaker cycle for a washout that sets up a tender bullish February grind with Q1 topping signals maturing.

Dow Jones – The Spooky Chart

This chart draws a fascinating historical comparison between the behaviour of the stock market today with that seen 100 years ago around the time of the Spanish Influenza
It clearly shows that what we are seeing today has some sort of reflection of the past
The picture should be taken as a warning sign that the weeks and possibly the months ahead are going to be difficult for the equity market.

Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers

US equity markets ended lower with the S&P and Nasdaq down 1.4% and 2.5% respectively. Most sectors were in the red led by IT and Consumer Discretionary down 2.7% and 2.1%. US 10Y Treasury yields were up 1bp to 1.75%. European markets were mixed with the DAX and FTSE up 0.1% and 0.2% while CAC was down 0.5% respectively. Brazil’s Bovespa was down 0.2%. In the Middle East, UAE’s ADX was up 0.7% and Saudi TASI was up 1%. Asian markets have opened broadly lower following losses on Wall Street – Shanghai, HSI and Nikkei were down 0.7%, 0.9% and 1.9% while STI was up 0.4%. US IG CDS spreads were 1.2bp wider and HY CDS spreads also tightened 1.5bp. EU Main CDS spreads were 0.1bp wider and Crossover CDS spreads were 1.9bp tighter. Asia ex-Japan CDS spreads widened 2.2bp.

These Dealmakers will Make or Break SPACs in 2022

While a majority of SPAC dealmakers have faced issues such as raising adequate financing for deals or acquiring high-quality merger targets, Serial SPAC Sponsors appear to have emerged relatively unscathed.
Serial Sponsors such as Gores, Palihapitiya, Cohen and Klein delivered the biggest deals of the industry
With 2022 being billed as the year of consolidation in SPACs, these sponsors have the potential to make or break the industry.

The Nightcap from SPAC Track

SilverBox Engaged Merger Corp I (SBEA) & Black Rifle Coffee Company
ECP Environmental Growth Opportunities Corp. (ENNV) & Fast Radius
Decarbonization Plus Acquisition Corporation II (DCRN +8.37%) completed its merger Tritium

Tesla Cybertruck Delay Confirmed to Mid-2023—at Least.

By Vicki Bryan

Reuters confirmed the latest delay until mid-2023 for Cybertruck’s rollout.
This is the latest in a string of pushed targets—won’t likely be the last.
I suspect exciting new competition from more credible truck-makers may have chased Tesla back to the drawing board.

Before it’s here, it’s on Smartkarma