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.
The Macro Situation
Markets were mixed this week, with stocks lower overall despite a closing rally reacting to lower Manufacturing and Services Price Indices. The reasons for downward pressure were varied.
Inflation in the UK remained above 10% despite a recent drop in wholesale prices. This is said by some to be the cause for the 3% BTC sell-off in 15 minutes on Wednesday (see Crypto Watch below).
US jobless claims rose more than expected to 245,000, but still remain historically high. Regardless, market volatility will remain as the economy tries to work its way between the poles of inflation and recession.
If there is a slight chance the Fed will be more aggressive with rate hikes over the remainder of the year, this week did some work to bolster that idea. Here’s the Fed watch chart.
We’re still on track for a 25bps increase in May and then a pause.
Macro-Dependent Tickers
- Long-term US Bonds (TLT, IEF, IEI) – likely bounce when Fed Rate hikes stop or reverse
- Gold (GLD), Silver (SLV) – likely bounce when Fed Rate hikes stop or reverse
Stock Watch
Is a Google resurgence being initiated by AI-driven sophisticated marketing? Or is Microsoft going to win the AI battle? This is probably not an either/or competition given the resources each tech giant has and their respective ability to adapt to market conditions. AI-related stocks remain the silver lining as leaner economic times loom.
What’s going on with crude oil? Brent crude oil prices are down this week, losing the $7 gain since the recent OPEC+ announcement to cut production.
Oil-related stocks have accordingly fallen. Factors include volatility in the actual supply, which appears to be higher than expected due to disappointing demand and Russian stockpiling supplies despite its commitment to make cuts in production.
Stock Tickers to follow:
- Microsoft (MSFT), Alphabet (GOOG)
- Transocean (RIG), Exxon Mobile (XOM)
Crypto Watch
The crypto market as a whole was negatively affected by the huge Bitcoin sell off on Binance. 16K BTC (over $467M) were sold following the report that UK inflation failed to come down as expected. As a result, Bitcoin dropped below the $30K mark.
Generaitiv ($GAI) is a community-focused AI platform whose aim is to support AI contributors through a distributed network providing GPU compute power. In March, according to Newsfile, Generaitiv announced “a groundbreaking AI text-to-image (TTI) to NFT gasless listing marketplace. This innovative platform enables users to create images into NFTs in a matter of minutes.” It’s currently bucking the Bitcoin sell-off downward pressure trend.
Crypto Narratives:
- Bank Safety: BTC, ETH
- Sovereign Currency Hedge: PAXG
- “AI” Narrative: FET, RLC, GAI (?)
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.
