The Macro Situation
High interest rates appear to be having the desired effect as demand was strong in Q4 of 2022 but then started to wane. Despite this downward momentum, GDP figures for Q4 came in higher than expected at 2.9% due to a build up in inventories and foreign demand.
This can mean one of two things for next week’s announcement:
- the Fed is expecting that the effect of high interest rates will continue to slowly take effect and stay on course for 25 bps hike in February; or
- the Fed believes the strong GDP coupled with a fall in weekly jobless claims warrants a 50 bps increase.
The first option is by far the favored approach. And that means that markets could persist in a rally through February.
Stock Watch
Stock Tickers to follow:
- Macro-Dependent: Gold (GLD), US Treasuries (IEI, IEF, TLT)
- Oil stocks: XOM, VLO, OXY
- Green Energy: TSLA
Despite the recent rally, a question mark over inflation and the growth of the economy remains. The US dollar index dipped below 102, which has been pushing GLD’s mostly upward trend. Oil stocks continue to perform well, though there is some concern that an economic slowdown will create downward pressure.
TSLA had better than expected profits in Q4 of 2022. The drop in the price of Tesla cars and the announcement that production will increase by 37% in 2023 compared to last year has boded well. TSLA closed the week with a 11% gain.
Paying subscribers will continue to get weekly updates on these plays. It’s helpful to recall that the Bubble Portfolio last year made just shy of 13% and beat its benchmark by nearly 40%. Pretty good for a growth portfolio in a terrible market.
Crypto Watch
Crypto Tickers to follow:
- The Benchmark: BTC, ETH
- ALT Coins: AVAX, MATIC, APT, QNT
- Network Coins: BNB, OKB, CRO
Polygon (MATIC) completed a successful hardfork/upgrade to its system on January 17th, helping to reduce gas fee spikes. The gaming platform Fractal is also coming to Polygon.
AVAX has seen increased BTC bridging, actually beating Bitcoin’s own Lightning Network to a record 5,700 BTC ($118.6 million). One of Avalanche’s most popular DEXes – Trader Joe – will be going live on Arbitum and BNB Chain.
Aptos (APT) is a Layer 1 blockchain that recently reached an all-time high at $19.86 on January 26. Its main virtue is in cutting through scalability problems.
Quant’s (QNT) aim is to bridge various networks using secure, data agnostic transferring processes. It has been on the rise since the FTX collapse on Nov 11. Sentiment is strong with QNT due to its team profile, viability, and involvement in the data analysis industry.
As a reminder, our Dynamic Crypto Portfolio beat the benchmark by better than 60% last year and beat the “smart money” in the crypto space (as reported by Messari data) by roughly 76%.
- Todd Mei, PhD
