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Fuller Treacy Comment of the Day – Inside a Crypto Nemesis’ Campaign to Chill the Industry

Comment of the day

Video commentary from November 22, 2022

A link to today’s video commentary is displayed in the subscribers area.

Some of the topics covered include: Wall Street stable but monetary conditions continue to tighten, Hang Seng pulling back from the first area of ​​the first potential resistance zone.

Eoin’s personal portfolio: hedging short profits taken, trading short losses taken, investment positions initiated on November 10, 2022

One of the most frequently asked questions from subscribers is how do I find my open trade details. To make things easier, I will simply repost the latest summary daily until there is a change.

This section continues in the Subscriber Area.

Comments on our tactical views and outlook for 2023

Thanks to a subscriber for this report Morgan Stanley (NYSE:MS) which can be interesting. Here is a section:

Technicals over fundamentals for now… our tactically bullish call has always been more focused on technicals than fundamentals. Today we provide an update on these factors, some of which no longer warrant higher prices despite providing support at current levels. The deciding factor is the breadth of the market, which has improved significantly over the past month and argues for us to remain bullish through the end of the year before fundamentals take us to lower lows l ‘next year. Comments on our call for the S&P 500 to hit a price low of 3000-3300 in Q1 23…we’ve received quite a bit of pushback that our forecast on this front is too aggressive both from a market perspective. scale than the calendar. Although directionally bearish, many investors are struggling to see even a retest of 3,500. In our view, what was priced at the October lows was the peak of Fed ferocity , not a significant drop in profits. If we were forecasting a modest forward EPS decline of 5% and further acceleration from those levels, we would concede earnings risk is likely assessed, but we are modeling a much larger forward earnings decline of 15 to 20%, which should require a more recessive 13.5-15x multiple on a significantly lower EPS.

Eoin Treacy’s point of view – A link to the full report is displayed in the Subscriber Area.

This agrees with my point of view. The US yield curve is strongly inverted and the pace of tightening has been surprisingly fast. This suggests that it is not unusual for corporate earnings to have been immune as there is a significant lag between the tightening and when it manifests in the economy.

Inside a Crypto Nemesis campaign to rein in the industry

This Bloomberg article may be of interest to subscribers. Here is a section:

“There were a lot of entrepreneurs who grew up in this area and chose not to comply,” Gensler said in an interview last month at SEC headquarters in Washington. “We’ll be a cop on the beat.”

Gensler’s central claim is simple: for all their new attributes, most cryptocurrencies are securities, like stocks or other investment products. This means that developers who issue cryptocurrencies must register with the US government and disclose information about their projects. In Gensler’s view, exchanges like Coinbase and FTX, where customers buy and sell digital coins, should also have to obtain SEC licenses, which come with increased legal scrutiny and compliance obligations. disclosure.

The crypto industry has fought government efforts to classify digital assets as securities, arguing that the legal requirements are too onerous. Even before the collapse of FTX, the debate was reaching an inflection point: A federal judge is expected to rule in the coming months in an SEC lawsuit that accuses cryptocurrency issuer Ripple of offering unrecorded titles. A government victory would strengthen Mr. Gensler’s hand, setting a precedent that could pave the way for more lawsuits against crypto companies.

Eoin Treacy’s point of view – The tech industry aspires to “go fast and break things”. In practice, this means ignoring regulations until sufficient scale has been achieved to shape them. For example, that’s exactly what Uber did by ignoring taxi laws. Chinese company ANT Financial was allowed to thrive in a very gray area of ​​banking regulation until it was finally neutralized by the government.

Housing Hotbed offers the rest of the world a patch or crash test

This Bloomberg article may be of interest to subscribers. Here is a section:

By March, it will be a year since the Bank of Canada started raising interest rates – meaning that more and more of the record number of people who took out short-term or variable rates at historically low rates will find themselves fully exposed to the approximately fourfold increase in borrowing costs since then, a potentially catastrophic shock to their personal finances.

The fate of the Canadian housing market will depend on whether or not it holds up. And just as the country has been a leader in the years-long global housing frenzy, how its downturn unfolds — a relatively orderly correction or a brutal crash — may be a harbinger of what’s to come. the rest of the world.

Housing markets around the world are reeling under the weight of central bank rate hike campaigns, with a frothy handful of countries joining Canada and already experiencing precipitous price declines. More than a dozen developed economies, from Australia to Sweden to the United States, are in the midst of a recession – defined as two consecutive quarters of falling prices – or will be at the start of next year , according to Oxford Economics. If these crises turn out to be worse or more widespread than expected, it would aggravate a potential global recession.

Eoin Treacy’s point of view – The Canadian 10-year rate seems to have reached a short-term peak of around 3.5%. The rate is retracing towards the mean of the trend, so this will be an important region to test whether demand dominance has returned beyond near-term stabilization.

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