Monday, June 21, 2021

๐Ÿ” Are Markets Rotating… Or Signaling a Crash? ๐Ÿ”

Good morning. Lumber prices are now down more than 40 percent from their peak a few weeks back.
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. Lumber prices are now down more than 40 percent from their peak a few weeks back. Bitcoin and other cryptocurrencies are down 30 percent or more over the past few months. Even gold prices have started to drop as well.

Is this a sign of a bigger crash in store? After last week's rough trading for the stock market, it's a possibility. But it's always a possibility that stocks drop 5-10 percent without any real news or large macroeconomic event behind them.

Given the rally in a few tech names last week, such as Advanced Micro Devices (AMD) and Nvidia (NVDA), it's more likely that inflationary-type trades have simply lost their momentum, and that new market leaders, possibly tech, are emerging. This rotation also means more volatility, but more opportunities.

Now here's the rest of the news:

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MARKETS
DOW 33,291.53 -1.57%
S&P 4,166.46 -1.31%
NASDAQ 14,030.38 -0.92%
*As of market close
Stocks dropped going into the weekend, on hawkish comments from a Fed President.
Oil rose 0.9 percent, closing at $71.68 per barrel.
Gold dropped 0.3 percent, hitting $1,770 per ounce.
Cryptocurrencies generally dropped, with Bitcoin last at $35,519.

Today's TOP TIPS
Whether Working Remotely or in office, Software Companies Will Continue to Reign
Tech stocks started moving higher overall last week as inflation expectations dropped following the latest Federal Reserve meeting minutes. In the tech space, software companies offer excellent returns overall, as they require little (if any) physical production.

That keeps profit margins high. For corporate software, the trends are steady even as work trends oscillate between being remote or in office.

» FULL STORY

Insider Trading Report: Euronet Worldwide (EEFT)
M. Jeannie Strandjord, a director at Euronet Worldwide (EEFT), recently picked up 1,166 additional shares. The buy increased her stake by 2.5 percent, and came to a total price of just over $146,000.

This marks the first insider transaction of 2021. Insiders have mostly been sellers over the past three years, even as shares have trended higher. Overall, company insiders own 4.4 percent of shares.

» FULL STORY

Unusual Options Activity: Macy's (M)
Shares of department store chain Macy's (M) have been in a steady uptrend for the past several months. One trader sees a continuation of that trend in the months to come.

That's based on the November $21 calls. With 151 days left on the trade, over 25,500 contracts traded, a 33-fold rise from the prior open interest of 767 contracts. The buyer of the calls paid $1.80 on average for the contract.

» FULL STORY

IN OTHER NEWS
Taper Talk Starts at Fed

Taper Talk Starts at Fed St. Louis Federal Reserve President Jim Bullard sees the central bank starting to hike interest rates as soon as 2022. While that may occur anytime in the next 6-18 months, most traders expected a rate hike in 2023, more than 18 months from now. The move may be necessary if inflation rates stay above the central bank's 2 percent target.
Vacation Home Demand Surges

With a 20 percent surge in 2020, more Americans bought vacation homes than ever before. And that growth outpaced the overall growth in existing sales. Based on data so far this year, the trend of buying vacation homes still remains strong, particularly among workers who are able to continue their work remotely.
Western Drought Threatens Hydroelectric Production

Light rainfall and strong seasonal demand for energy could spell trouble for Western states dependent on hydroelectric power. California looks particularly vulnerable, as 16 percent of the state's power comes from hydroelectric energy, some of which is imported from nearby states. The state operates 8 hydro facilities, and expects them to average about 30 percent of their average generation.
Spotify Scoops Up Podz

Podcasts remain a growing industry, and now there's some consolidation underway. Spotify (SPOT) has announced that it is buying Podz, a startup trying to scale podcast delivery services. Podz breaks down podcasts into 60-second clips to allow listeners to get a feel for a show without having to listen to a 30 minute (or longer) podcast. Terms of the deal have yet to be disclosed.
Goldman Sachs Partners with Galaxy Digital on Bitcoin Futures

Investment bank Goldman Sachs (GS) has started trading bitcoin futures. The bank has partnered with crypto firm Galaxy Digital (BRPHF) to do so. This is the first time Goldman has a counterparty with a digital merchant bank. Trading futures on Bitcoin may allow more liquidity to come into the space, which in turn may help dampen the volatility in cryptocurrencies.

S&P 500 MOVERS
TOP
LEN 3.719%
ADBE 2.581%
ENPH 2.383%
GNRC 1.969%
ABMD 1.907%
BOTTOM
GL 5.973%
BKR 5.463%
FMC 5.051%
LNC 4.775%
STT 4.748%

Quote of the Day
I've got good news for you: The stock market, which is pretty correct on these kind of matters, is saying that commodity inflation has already peaked. Forget transitory, the market's saying it's pretty much over. Sure, the market could be wrong, but if you were worried about totally out-of-control inflation, that possibility has been taken off the table. You're looking at a sudden collapse in every stock related to commodities at the same time that long-term interest rates are crashing — that wouldn't happen in a world with wild and crazy inflation.
- CNBC analyst Jim Cramer, on why last week's drop in commodity prices and commodity stocks points to a significant slowdown in inflation expectations going forward.

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