Welcome to the free State of the Market report for the Art of the Bubble! Our subscriber plans make use of the same base algorithm that our crypto hedge fund, 1.2 Capital, does. It’s modified in timeframe and weighting so you don’t have to stare at your screen all day long. In 2022, for cryptos, the Dynamic Algorithm outperformed its benchmark by better than 70%. In 2022, for stocks, the Bubble Portfolio outperformed its benchmark by better than 40%. For those of you who are accredited investors, 1.2 Capital has re-opened new investor onboarding. If you are interested in learning more please reach out to us here. Upgrade to Paid
The Macro Situation
Markets are sitting between the jubilation of being at the end of the interest rate hike cycle and the sobering indications of what a softening jobs market might bring–i.e. recession! Unemployment benefits claims increased by 228,000; and there was a gradual decrease in the number of jobs created (236,000) compared to February.
Although stocks ended up for the short week before Easter, the party may be coming to a close. Additional recession indicators: OPEC+’s announcement of a 1.15 million to 800,000 barrel reduction, the US Dollar index dropping below the 102 mark for a bit, and the jump in precious metal prices are harbingers of recessionary conditions.
The Fed may decide to pause its interest rate course and the CME FedWatch Tool has a definitive consensus on a rate cut by December.
-Todd Mei, PhD and Sebastian Purcell, PhD
Stock Watch
Macro-Dependent:
- Long-term US Bonds (TLT, IEF)
- Gold (GLD), Silver (SLV)
- Oil: XOM
AI:
- Microsoft (MSFT)
- Micron Technology (MU)
- Meta (META)
Precious metals are benefiting from weak US economic data and the weakening US dollar.
With OPEC+’s reduction in oil production, everyone is waiting for the price to rise closer to summer 2022 levels when crude oil was over 100. In the meanwhile, Exon (XOM) is trading higher than its competitors over its low-carbon business development.
Meta announced its entry in the AI space with SAM (Segment Anything Model), whose aim is to help AI systems better understand the physical and human world. The main focus is in being able to identify “individual objects from within an image” without requiring any prior training.
Crypto Watch
- “The Goliath” Narrative: ARB
- “Liquid Staking” Narrative: JOE, LIDO
- “Bank Safety” Narrative: BTC, ETH
- “Sovereign Currency Hedge” Narrative: PAXG
- “AI” Narrative: AGIX, FET, RLC
ARB’s DAO has been weathering some political controversy, causing its price to move up and down. But trading volume on its platform has bulls expecting the coin price to fluctuate as it moves towards a $1.50 resistance mark.
Certainly benefitting from ARB’s prominence are JOE and LIDO. But it's not just hype since behind Trader Joe’s rise within the DeFi lending space is the adoption of Uniswap v3 concentrated liquidity trading. LIDO continues to trade on its relation to AAVE as its token rewards distributor on ARB.
BTC and ETH might just very well demonstrate their flexibility with regard to being correlated to the macro economy. As we shift towards recessionary conditions, the two coin giants might move from benefiting from the recent rally to counter-cyclical hedge.
On that note, as precious metals prices rise, keep an eye on PAXG.
-Todd Mei, PhD
If you found this helpful, Subscribe to The Art of the Bubble’s free newsletter.
Join us on Discord for live chat and daily updates.
This newsletter was created by The Art of the Bubble/1.2 Labs and is provided for educational and entertainment purposes only. You should expect no financial returns one way or another based on the statements contained herein.Robin Technologies and Analytics LLC is the firm that distributes The Art of The Bubble products. The firm does not provide individually tailored investment advice and does not take a subscriber’s or anyone’s personal circumstances into consideration when discussing investments; nor is Robin Technologies and Analytics LLC registered as an investment adviser or broker-dealer in any jurisdiction.
