Tue. Apr 13th, 2021
From <a href="https://www.zerohedge.com/"Zero Hedge

Stimmies Send Stocks Soaring, Crypto Pumped’n’Dumped

Global helicopter drop engaged…

And we previously detailed why stonks and crypto will surge…

“I probably will take about half of it to invest into stocks,” said Iyana Halley, a 28-year-old actor who recently appeared in NBC’s television drama “This Is Us.” The Los Angeles resident remains on the fence about which equities to buy, but has been keeping a close watch on social media and seeking guidance from a friend she trusts.

“I want to see what will make the most sense, where I can get the most out of my money,” Halley said in an interview. “I’m still new to the stock-market world, so trying to figure stuff out.”

Traders are also hoping to figure it out as soon as possible, because the retail buying may come as soon as Monday once the stimulus checks received over the weekend are invested, giving the Nasdaq 100 Index new wind after it fell into a correction earlier this month amid a crash for some of the market’s most speculative names.

The checks “could offer a short-term ‘shot in the arm’ to a market that was otherwise looking run-down and vulnerable to a sell-off,” said Sam Stovall, the chief investment strategist at CFRA Research.

“Stimulus checks will almost certainly drive more retail buying,” said Eric Liu, co-founder of Vanda Research, a firm that tracks retail flows in the U.S. “The social media attention has remained strong.”

Tyler Hopkins, a 26-year-old computer technician for a school district an hour east of Los Angeles, spent about half of his two previous pandemic stimulus payments on stocks including GameStop Corp. and non-fungible tokens. He plans to buy more shares of retail favorites when the latest payment hits his bank account.

“I’ve been buying crypto and stocks for a while now, but the stimmys helped pay some bills and I put the rest of them into investing,” Hopkins said.

So while one can debate about the precision, one thing is clear: tens if not hundreds of billions from the latest Biden Bonanza will end up in the market. Yet for all the excitement that the stimulus payments are stirring up among younger traders looking to make a killing, some investment professionals have been wringing their hands. They worry that unsophisticated newbies buying stocks they heard about from memes or online forums like WallStreetBets could take already stretched valuations even higher.

“You could say it’s like gasoline on a fire,” said Kimberly Woody, a senior portfolio manager at GLOBALT Investments. It’s “participation from a lot of folks that really just don’t know what they’re doing.

With stimmies ready to fly out the door (and arriving electronically in Americans’ bank accounts into the weekend), cryptos were bid over the weekend. But, some mixed messages from India sparked a reversal, erasing the stimmy-gains.

Source: Bloomberg

China was ugly overnight led by big-techs…

Source: Bloomberg

Europe also saw a wave of selling after a panic-bid open…

Source: Bloomberg

But US Stocks reversed dramatically higher (again) at the European close. We have no idea why everything went panic-bid into the close…more stimmies arriving in bank accounts?

Dow and S&P at record closing highs with Dow up 7 days in a row.

Because nothing say buy stocks like the first major federal tax hike since 1993.

We note that hedgies appeared to be liquidating into the EU close (this is the most-held stocks by hedge funds), but that stopped as EU closed…

Source: Bloomberg

Small Caps played ping-pong all day long after tumbling during the EU session…

GME puked, bounced, then dumped into the close…

ARKK rallied back to fill Friday’s opening gap down, but could not hold gains…

Treasury yields were mixed but mostly lower on the day. NOTE that bonds were bid during the EU session…

Source: Bloomberg

5Y Breakevens hit 2.60%, highest since 2008…

 

Source: Bloomberg

The Dollar ended the day modestly higher…

Source: Bloomberg

As we already mentioned, crypto rollercoastered, but before dropping Bitcoin hit a new record high…

Source: Bloomberg

And Ethereum also reached a record high…

Source: Bloomberg

Silver surged on the day while crude was clobbered (for no news-based reason) while copper and gold trod water…

Source: Bloomberg

Finally, we note that every so quietly, the market is pricing in an ever more hawkish Fed with the odds of a rate-hike by the end of 2022 now nearly 80% (from zero a few weeks ago)…

Source: Bloomberg

Tyler Durden
Mon, 03/15/2021 – 16:01

Read More

By

Leave a Reply

Your email address will not be published. Required fields are marked *