Tuesday, May 18, 2021

🔁 Rotation or Inflation?

Good morning. One underperforming asset this year has been gold. The metal cleared $2,000 per..
It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.

Good morning. One underperforming asset this year has been gold. The metal cleared $2,000 per ounce for the first time last year, then sank back. With inflation headlines dominating news in the past few weeks, the metal has been trending higher.

The move comes as many tech names have been in a bear market, and assets like cryptocurrencies have seen daily drops in the 10 percent range. This may simply be a rotation into an asset that's performed the "least poorly" the past few months. But it may also be a sign that inflation expectations are likely to remain high for some time.

Now here's the rest of the news:

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MARKETS
DOW 34,327.79 -0.16%
S&P 4,163.29 -0.25%
NASDAQ 13,379.05 -0.38%
*As of market close
Stocks declined on Monday, but closed near session highs.
Oil rose 1.4 percent, closing at $66.30 per barrel.
Gold rose 1.5 percent, closing at $1,866 per ounce.
Cryptocurrencies dropped over the weekend and into Monday, with Bitcoin last at $44,074.

Today's TOP TIPS
Crypto Craze Leads to Tech Shortage in an Unusual Place
Cryptocurrency mining has led to a large surge in demand for processing power. That's been great for companies that manufacture those products. But some of today's newer cryptocurrencies are using data storage in a larger way than in cryptos of the past.

That's created a surging demand for hard drives, and reversed a declining sales trend for hard drives that occurred over the past few years on concerns that everything would simply move to the cloud.

» FULL STORY

Insider Trading Report: Cleveland-Cliffs (CLF)
Janet Miller, a director at Cleveland-Cliffs (CLF), recently bought another 1,280 shares. The buy increased her stake by less than 2 percent, and came to a total cost of just under $25,000.

This is the second buy of the year, following a 15,000 share buy form the company CFO in March. Over the past 3 years, C-suite executives and company directors have been exclusively buyers. The only sale has come from the stake held by another company.

» FULL STORY

Unusual Options Activity: Baidu (BIDU)
Chinese search giant Baidu (BIDU) has just completed a head and shoulders pattern, undoing its recent gains and now trades back at a five-month low. One trader now sees the potential for a bounce higher.

That's based on the July $185 calls. Over 10,197 contracts traded against a prior open interest of 299, for a 34-fold rise in volume. The buyer of the option which has two months to play out, paid about $13.50 for the contract.

» FULL STORY

IN OTHER NEWS
Man Who Predicted 2020 Crash Issues Huge Warning

Wall street insider Chris Rowe says, "fortunes will be made, and lost… in what will go down as the greatest stock market event in the last 20 years."

You need to see this ASAP.

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AT&T Looks to Merge Media with Discovery

AT&T (T) and Discovery (DISCA) announced that they were combining their media assets. The goal? To create a large global streaming player. The move comes as streaming companies have proliferated in the past few years, and creating larger players looks like the way to win in the space.
Commodities Outperform Stocks on Inflation Fears

From oil to metals to agricultural goods, prices of many commodities have beaten out the stock market. One commodity index has returned 26 percent year to date, against a rise of 9 percent compared to the S&P 500. Traders expect this outperformance to continue on economic reopening, and as long as added monetary stimulus remains in place.
Airlines May Struggle as Business Travel Remains Subdued

Business travel has lagged the rebound in airline passenger traffic. That's a group that represents about 12 percent of total passengers, but on some flights accounted for 75 percent of a flight's revenue. The slow rebound in business travel in the video conference era may weigh on how quickly airlines can return to profitability.
Apple & Amazon Add Music Streaming Features

Both Apple (AAPL) and Amazon (AMZN) have added lossless audio features to their streaming music platforms at no additional cost. Typically, streaming platforms will compress files, which can lead to some sound degradation.
Cryptocurrencies Face Challenges on Adoption Issues

The recent addition of Bitcoin to corporate balance sheets has slowed in recent days, and announcements from some companies indicate a reluctance to purchase more. That's occurred as prices of Bitcoin have stalled for several months following a 10-fold jump, and altcoins have exploded in value. Other challenges remain ahead as well, including adoption and the role of smaller cryptocurrencies.

S&P 500 MOVERS
TOP
STX 6.39%
WDC 6.331%
M 5.974%
OXY 5.139%
BKR 4.821%
BOTTOM
CMCSA 5.496%
DISCA 5.049%
KSU 3.874%
ALB 3.675%
CHTR 3.315%

Quote of the Day
People are always looking for that signal to tell them what is coming next and the bond market is really that place… That's saying the credit market is not concerned right now. We're sitting in a pretty good spot with a higher VIX [and] a steady bond market. That's usually positive news for equity markets going forward.
- Victoria Fernandez, chief market strategist at Crossmark Global Investments, on why the bond market's tepid reaction to last week's market volatility is likely a sign that markets are just being volatile, and not facing a larger correction.

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