The Dead Cat bounce is old news, now we’re confronting the evolution: The “Flat Cat” Landing.
Translation: while the markets try to rally, Powell isn’t taking his foot off the rate hike pedal (we like to think he drives an ‘82 ‘vette)...

So how can you avoid getting pancaked like poor Mr. Mittens?

Masterworks.

This art investment platform's last three exits delivered +10%, +13%, and +35% net returns. And no, 35% returns is NOT a typo. In fact, Masterworks has had every single one of their exits to date deliver positive returns to their investors, even through 2022’s record rate hikes.

You see, the art market is way less affected by macroeconomic swings than stocks. Meaning you don’t have to worry if JPow is in the mood for some reckless driving.

Masterworks is helping over 620,000 people unlock the $1.7 trillion high-end art market, so investors like you can diversify with pieces from names like Banksy and Picasso. No wonder offerings have sold out in minutes.

Fortunately, you’re a Daily Peel reader, so you don’t have to worry about that. You can skip the waitlist with this VIP link

• International media roasts US equity markets for one of the worst days in quite a long time as rate hike fears suddenly re-emerge
• Uncle Joe’s ballsy move into Kyiv seems to have upset Russia and their lowkey BFF China more than expected…and we’re not excited
• There’s way too much science going on here for me, but apparently, Lithium stocks are crashing while something called “graphite” is beginning to emerge
• Starbucks is known for its bold and novel coffee moves, but even for the diehards among us, this might be too much

Not Lovin’ It: Housing Edition

Let’s take a trip down memory lane. What were you doing 12 years ago? Whether you were scrolling through MySpace, bumpin’ Party Rock Anthem by LMFAO, or, like me, getting potty trained, you sure weren’t buying an existing home in the United States.

And you weren’t last month either, were you? We didn’t think so.

January 2023 saw the lowest rate of existing home sales in 12 years. If you were one of the few unlucky enough to be in on that annualized 4.0mn existing homes sold last month, then congrats on the high rate and higher stress. We wish you the best of luck. For those not involved in that cohort, let’s point and laugh for a moment.

Sales of existing homes across the United States continued their precipitous drop last month, falling by 0.7% last month and officially reaching the lowest level since October 2010. It’s almost like the housing market was going through a bit of a struggle back in 2010 or something.

Oh, that’s right, that was the revival of the once-thought-for-dead US residential real estate market. Now, we’re not in nearly as dire a position today as we were then (yet), but slowing existing home sales, especially to this degree, should be a mild cause for concern.

Housing and housing service-related expenses are not only nearly 1/5th of US’s GDP, but for the average American, their home is the single most important part of their financial lives.

The velocity of exchange in that market provides things like price stability and ease of tapping home equity that tend to dry up during times of large-scale housing market uncertainty. Alone, slowing home sales aren’t worth losing sleep over, but the economic circumstances this trend is symptomatic of certainly can be.

But lowkey, that’s kinda exactly what JPow wants to see. Loyal Peelers already know that home prices blew up more than cordyceps in The Last of Us since the pandemic began, so a decline here isn’t gonna dare JPow to spike rates more than otherwise planned.

That’s because the velocity of exchange serves as a reliable proxy for demand. As this demand weakens in the face of hella-elevated interest rates, there’s only one direction for prices to go. Maybe even to a level that the average person can actually afford!

Crazy, I know, but it’s obvi not all sunshine and rainbows. Home resales, the single largest slice of the home-exchange market in the US, collapsed nearly 40% YoY. Moreover, as home sales fall amid a dry-up in demand, that’s only more reason for homebuilders to underinvest in building out housing supply across the US. Not exactly ideal for those of you looking to buy a home. Ever.

Still, confidence amid homebuilders managed to rise (somehow) while the median price of these homes (somehow) still increased by 1.5%. But, like we always say, as long as it’s making cents, it don’t have to make sense.

AMC Entertainment ($AMC) ↑ 16.30% ↑

• A Monkey Circus. That’s all this stock is, and I’d apologize for the offense, but the only traders dumb enough to hold shares already refer to themselves as “apes” (even though we at WSO are obvi the real apes), so I’m not even gonna try.
• And speaking of these apes, they happen to absolutely hate $APE. For those smart enough to stay far away, the $APE investment is just preferred shares in the movie theater chain. BUT, of course, there’s more to it, as AMC was expected to complete the conversion of $APE into regular ol’ AMC shares next month.
• Not so fast. Large shareholders in AMC have now filed suit against the firm on the incoming dilution from the conversion process. As this suit will almost certainly delay the conversion and thus delay any ownership dilution for existing shareholders, shares popped off yesterday.
• Moreover, earnings expectations for the shitco are at an absolute rock bottom. Apparently, however, some traders think they might be able to pull a beat out of their ass, so hopes of that kinda got the people goin’ yesterday too. Stay tuned for the drop early next week.

HSBC Holdings ($HSBC) ↑ 4.55% ↑

• While the rest of the country zigs, one of the UK’s largest banks zags as global banking giant HSBC reports some surprisingly non-trash numbers for its latest quarter.
• Shares ripped (for a UK-based bank) on the back of mostly solid earnings figures released on Tuesday. Sure, EPS missed, but nobody read that far down on the income statement as sales beat by ~7.5%.
• Like most other banks, this team is psyched about rate hikes. During last quarter’s call, the firm reiterated their expectation that higher costs of money for you will lead to more money for them. Isn’t that great?!
• Well, it is great if you own shares. Despite the still low (but growing) confidence in the UK / EU economy for 2023, HSBC, as the continent’s largest bank, maintains that “safety premium” that others envy. Good luck.