It's always "different this time".....right?
Well, this time, as it was the last time, and the time before that, and the time before that; this time, it could very well, actually, turn out to be, legitimately, different.
Again, it never usually is -- but this time........well....
Let`s quickly sum things up.
We`ve got:
-tech run has lasted 12 months
-catalyst for tech run appears to have ended as we transition into "new normal"
-Yields increasing; haven't been this low relative to U.S. economic growth estimates since 1966 according to ZH
-fed ending many Q/E programs, but still uncertainty about SLR forbearance..
-evidence of rotation
-most market professionals have credited the sudden and, sort of, "esoteric" move seen in the equity markets last year as the entire world was shutdown to increased liquidity created by record breaking CB balance sheet expansion, so again, with this finally coming to an end, people might view this as a signal that "the party has ended", which could explain the crash in SPAC's and more speculative tickers, even while the Dow has continued to make new all time highs
Could this chart pattern be the beginning of a more protracted, structural downtrend?
Is the price action in the Dow vs the Nasdaq an indication of risk sentiment? Backdropped against Q/E removal, it seems probable. The fed brought the markets up, so certainly they can bring the markets back down...Isn't that what happened in 2018?
As is always, we will have to wait and see.
Cheers.
Well, this time, as it was the last time, and the time before that, and the time before that; this time, it could very well, actually, turn out to be, legitimately, different.
Again, it never usually is -- but this time........well....
Let`s quickly sum things up.
We`ve got:
-tech run has lasted 12 months
-catalyst for tech run appears to have ended as we transition into "new normal"
-Yields increasing; haven't been this low relative to U.S. economic growth estimates since 1966 according to ZH
-fed ending many Q/E programs, but still uncertainty about SLR forbearance..
-evidence of rotation
-most market professionals have credited the sudden and, sort of, "esoteric" move seen in the equity markets last year as the entire world was shutdown to increased liquidity created by record breaking CB balance sheet expansion, so again, with this finally coming to an end, people might view this as a signal that "the party has ended", which could explain the crash in SPAC's and more speculative tickers, even while the Dow has continued to make new all time highs
Could this chart pattern be the beginning of a more protracted, structural downtrend?
Is the price action in the Dow vs the Nasdaq an indication of risk sentiment? Backdropped against Q/E removal, it seems probable. The fed brought the markets up, so certainly they can bring the markets back down...Isn't that what happened in 2018?
As is always, we will have to wait and see.
Cheers.
As most of us know, Wall Street had a Parade in 2020, raising more money in the equity markets than in any other year besides 2007, if you can believe that.
Merger's and acquisitions also saw increased activity in the second half of 2020, up 88% compared to first half, and totaling $3.6tn for the year, surprising many experts..
“If you told me we would have a pandemic and that global M&A would still be flattish compared to last year, I would have been astonished.”
--Peter Orszag, chief executive of Lazard’s financial advisory business
“I think that when I look back, I don’t think I could have ever imagined any acquisitions happening this year“
--Marc Benioff, CEO of Salesforce, Financial Times, December.31st
At one point last year, follow-on offerings were even outperforming the Nasdaq by almost 40% POST offering..
"Yet while the staggering amount of follow-on offerings is not news, the performance of companies selling their stock is nothing short of shocking, because whereas in a normal world the association dilution with new equity sales would in theory result in depressed stock prices, the reality of the past few months has been anything but. ...stocks sold in 2020 secondary offerings closed on Tuesday 39% above their offering price on average. That’s outpacing the year’s 28% gain in the Nasdaq Composite Index, a 40% outperformance."
That's INSANITY, by the way! But we all saw it..
Stocks like PEIX (ticker recently changed), GEVO, AREC, WWR; blockchain tickers, EV tickers, even marijuana tickers (SNDL) were all raising money with seemingly zero share price repercussions.
Usually when a company needs to dilute existing shareholders to continue running their operations, the shares are priced at a discount to the existing market price. This also increases the outstanding shares, which tends to scare short term traders, who see larger floats as a negative indicator for momentum, short squeeze potential, etc.