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All eyes on FED meeting next week…

QUICK HITS FROM GRIT
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All eyes on FED meeting next week…

QUICK HITS FROM GRIT

*This is sponsored advertising content.

Happy Friday Everyone! đź‘‹

Remember, since 1900 the U.S dollar has lost 98% of its purchasing power. Meanwhile, the S&P has returned 315,853% inflation-adjusted.

Not owning stocks is risky.

MARKET UPDATE

  • FED meeting next week

  • Market expectations: Not Volcker

Rates

  • Big shift in market expectations after yesterday’s inflation print.

  • Market now pricing in a +60% probability of 8 rate hikes this year, which would bring the FED funds rate up to 2-2.25% by year end.

6:30 a.m. Putin: talks are “constructive” with Ukraine

  • “there are certain positive developments, as far as negotiators from our side informed me”

  • At the same time, Russia launched attacks on Western Ukraine for the first time

  • Finland’s president is scheduled to speak with Putin today after speaking with Zelensky earlier

  • Crude and Wheat are down on the news

Russia/Ukraine

  • Biden set to call an end of normal trade relations with Russia

  • This would put Russia in the company of Cuba and North Korea

Crude $105

  • What is the positive shift from Putin’s point of view?

  • Probably, it’s that Ukraine is not getting into NATO

  • Iran Nuclear deal talks have been suspended for now

Earnings

  • Oracle

  • Rivian

  • Ultra Beauty

  • DocuSign -18%

  • WeWork

Crypto

  • Crypto markets haven’t been able to hold recent rallies

  • Russian based crypto volume remains high

  • Bitcoin pull/call ratio has come down from last month

  • And implied volatility is creeping up

QUICK HITS FROM GRIT

SIX things you need to know this week in 60 seconds.

  1. I guess we’re just walking everywhere now

  2. Carbon-transformer will test SPAC waters

  3. Retail buys the dip, Wall Street just dips

  4. The cost of everything is up

  5. Busy week for crypto off the field

  6. From the founder of r/WallStreetBets: the “Insider Portfolio”

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1. MACRO

I guess we’re just walking everywhere now

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The national average for gas at the pump is $4.318 a gallon. That’s the highest since 2008 (although in today’s dollar, gas was $5.31 in June 2008).

For months oil prices had already been rallying as the global economy rebounded from the pandemic on lower output levels than before.

As one of the world’s biggest oil producers, Russia’s invasion of Ukraine caused a global supply shock that sent Brent over $130 this week.

Biden has said he would release millions of barrels from the US Strategic Petroleum Reserve, but it’s not expected to make a material impact on prices at the pump.

GRIT’S TAKE: The White House—after banning Russian oil and gas—is now discussing the possibility of replacing Russian imports with supply from some not-so-great sources, like Venezuela and Iran.

GRIT’S ACTION: Not chasing this energy trade. “The cure for high oil prices, is high oil prices”

Under the Radar

THE INFRASTRUCTURE POWERING DeFi. Decentralized Finance (DeFi) is taking over the finance world, but it still remains a mystery to many. That’s why Liquid Meta is building the bridge from TradFi to DeFi which will enable equal access to financial products & services to all individuals & businesses around the world*.

EXPOSURE TO EXPLOSIVE MARKETS. Blockchain Foundry is at the forefront of innovation in the blockchain and NFT markets. From helping enterprises with opportunity audits, consulting, DeFi, token service to a custom-built NFTGen pipeline that will enable much more than what is offered with your typical NFTs, Blockchain Foundry is the gateway to the decentralized universe*.

INVEST IN THE METAVERSE. How are you getting exposure to the metaverse and NFTs in the stock market? Looking Glass Labs provides shareholders with both! Its wholly owned subsidiary, House of Kibaa, is building a hyper-realistic metaverse while its NFT drops with perpetual royalties generate consistent, passive revenue*!

*This is sponsored advertising content.

2. DEALS

Carbon-transformer will test SPAC waters

https://cdn.substack.com/image/fetch/w_1600,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0e827797-d00f-4154-88ca-7f4ff8ee598c_800x450.jpeg

LanzaTech is one of many companies developing technologies to decarbonize high-emitting industries through capture and reuse.

The Chicago-based “carbon-capture and transformation” technology firm traps carbon emitted during industrial processes and then turns it into sustainable chemicals and products—such as ethanol—using bacteria.

Manufacturers like steelmakers will use LanzaTech technology in their manufacturing process to reduce their environmental footprints, and companies like Unilever and Coty are buyers of the resulting end products.

The company will be testing the choppy open SPAC waters soon after announcing this week a $2.2B merger with SPAC AMCI Acquisition Corp. II.

GRIT’S TAKE: CNBC’s SPAC Post Deal Index, which is comprised of SPACs that have completed mergers and gone public, is down 56% YoY.

GRIT’S ACTION: Carbon might buck the trend. I have seen at least 6 carbon deals hit my desk in the last couple of weeks. Institutional appetite is strong!

3. STOCK MARKET

Retail buys the dip, Wall Street just dips

Closer to the end than the beginning of the discretionary de-risking

This generation of retail investors’ strategy can be summed up with 4 words, or just 4 letters, really: BTFD.

The retail army held strong this week, pouring $1.51B into equities on Monday despite a massacre that saw the S&P and Nasdaq drop nearly 3% and 4%, respectively.

Since Russia’s invasion of Ukraine, retail investors have bought roughly $12B worth of dip. Hold the chips.

On the other hand, we’re seeing hedge funds deleveraging from equities.

While the risk of capitulation remains, hedge-fund positioning has become so bearish that the risk-reward of holding equities is skewed to the upside.

GRIT’S TAKE: The level of active deleveraging is the biggest aside from March 2020 (pandemic) and January 2021 (GameStop).

GRIT’S ACTION: Adding to my core “sleep-at-night” portfolio. Volatility is an opportunity.

4. COMMODITIES

The cost of everything is up

Bloomberg Commodity Spot Index is at a record

The geopolitical wake of Russia’s invasion has propelled both the Bloomberg Commodity Spot Index and the UN’s global food index to record highs.

Grain markets are skyrocketing, led by wheat which peaked at a record $12.94 per bushel this week (Russia produces 11% of the world’s wheat is and is the largest exporter).

Peter Schiff is living his best life with gold getting above that pesky $2k mark for the first time in 18 months.

The price of nickel surged 250% over 2 days this week to briefly top $100k per ton, prompting the London Metal Exchange to suspend trading and investors to check between the couch cushions for loose change.

Oil volatility remains with Brent crossing above $130 a barrel briefly before coming back down, potentially on concerns over demand destruction.

GRIT’S TAKE: There’s no sugarcoating it: the future is going to cost more money.

GRIT’S ACTION: Own stocks with pricing power. Banks & Tech.

5. CRYPTO

Busy week for crypto off the field

Biden finally announced his crypto executive order this week: Ensuring Responsible Development of Digital Assets. It will task federal agencies to produce reports on and consider new regulations for digital currencies. It will also explore the possibility of creating a digital version of the USD.

The biggest hedge fund names—like Alan Howard and Paul Tudor Jones—are also expanding their crypto investments. With crypto markets large and liquid enough to be tradeable, mainstream hedge funds are now seeing crypto as a fifth asset class.

It’s not a hedge fund, but this week Bain Capital launched a $560M fund (with a tone-deaf announcement!) that will invest in mainly crypto-focused infrastructure and DeFi by assembling a portfolio of 30 new companies or protocols.

GRIT’S TAKE: All of this points to increased institutional adoption! Coinbase reported $1.14T of crypto trading from institutions last year which is more than double the $535B that individual investors traded.

GRIT’S ACTION: After a pullback of ~40%, we believe NOW is the best time to go hunting for alt-coins! Subscribe to GRIT’s *NEW* crypto newsletter to follow us on this journey!

6. ENTERTAINMENT

From r/WallStreetBets: the “Insider Portfolio”

Nancy Pelosi and her husband are reported to have made as much as $30MM over the last decade on investments in companies the lawmaker is responsible for regulating.

Whether it’s call options on Nvidia or leaps on Tesla, you really can’t go wrong by following the Senator’s path when it comes to picking stocks.

That’s why the founder of r/WallStreetBets is pitching the “Insider Portfolio” which—with the help of our friends at Unusual Whales—tracks and mimics trades made by Pelosi and her husband.

The product can be found for $1 a share on an obscure exchange called MERJ based on an island off East Africa and is only available to investors who use the WallStreetBets app (there’s an app!?).

This is where a big NOT FINANCIAL ADVICE stamp would typically go.

GRIT’S TAKE: Unfortunately this fund might be dead in the water as multiple bills are being considered to ban members of Congress from trading stocks, which means WallstreetBets is going to have to go back to doing things the old fashion way: pumping meme stocks!

GRIT’S ACTION: If it sounds too good to be true… it usually is!

What stocks are trending in the news?

*SOURCES
1. CNBC
2. WSJ

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Disclaimer:The publisher does not guarantee the accuracy or completeness of the information provided in this page.  All statements and expressions herein are the sole opinion of the author or paid advertiser.

Grit Capital Corporation is a publisher of financial information, not an investment advisor.  We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient.  

THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME.  THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION.  INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN.

No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.  

Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable.  They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.  Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein.  The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the publisher undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.

The publisher, its affiliates, and clients of the a publisher or its affiliates may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities).  To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.

Neither the publisher nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.

By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.

For Full Terms of Use Click HERE. For the Privacy Policy Click HERE.

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