Daily BriefsUnited States

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

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

By Josh Du

  • 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

By Shyam Devani

  • 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

By SPAC Track

  • 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

By Hamed Khorsand

  • 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

By BondEvalue

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?

By subSPAC

  • 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%.

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