Wild West No More | The Daily Peel | 3/10/22

Stocks were looking like the Irish countryside yesterday: a whole lotta green (just look at the image below). Collective short-term amnesia was the biggest driver of yesterday's gains, as dip buyers and permabulls alike bought up shares like it was the last bear market ever. 

Oil and bonds fell simultaneously. The Nasdaq stormed up 3.59%, while the S&P boomed 2.57%, and the Dow spiked "only" 2.00%.

Let's get into it.

• McDonald's is taking their burgers and going home
• US Federal Govt. Budget earmarks $13.6bn for Ukraine in 2022
• Like nerds in 2013, hedge funds are getting excited about crypto
• Homies are starting to doubt the Russian military after their embarrassing attempt to seize Ukraine
• The South Korean Presidential campaign is wilder than Squid Game
• The Russian population broadly supports Putin's war in Ukraine (*spits*)

WTF Just Happened — Yeah, I'm asking myself the same question. Stocks staged a massive comeback yesterday, finishing with the steepest gains since "BTFD" became a full-on movement back in March of 2020. 

To sum it up, sh*t was wild. It's not often we live through days that seem as diametrically opposed to ongoing themes as yesterday, so let's enjoy it while it lasts. 

Basically, everyone forgot about the macro picture and instead looked at valuations and decided things had fallen enough (for now). The risk-on trade worked like a charm, with the Nasdaq up almost 3.6%, $ARKK up 5.2%, and digital currencies ripping (more on that below). 

Oil futures sank a ton, with American crude back below $110 and Brent sitting at $112.50. The story is that nations like the US and especially the UAE were forcefully pushing for OPEC and OPEC+ to drastically increase global supply in response to Russia's scumbag invasion. 

Treasuries, meanwhile, largely fell across the board. The US 10-year climbed across 1.9% again (recall, yields rise when prices fall), and global yields rose alongside. 

Equity indexes, however, were where the real fun was at… as always. Dip buyers stormed on the scene, especially abroad in places like Germany, where the nation's equivalent of the S&P 500, the DAX, gained 7.92%. 

It could be that investors are starting to see the Russia-Ukraine conflict as a short-term (yet horrific) conflict that may only impact global economies for a short time. Or, it could be that Mr. Market decided he doesn't like the color red anymore and needed a change.

Either way, unless your all-in on oil and oil only, your portfolio was up yesterday. Congrats, kings. Let's keep it that way. 

Join the Crowd — Always full of surprises, Amazon has never been a stranger to hyping people up. And yesterday, Jassy and the whole crew did exactly that.

Following behind Google, Tesla, and even Apple, Amazon yesterday announced a 20-for-1 stock split incoming along with a $10bn share buyback program. In what Bloomberg has termed the "big tech blueprint," the move will allow us, retail traders, to buy more than 0.62 shares in the firm while also increasing liquidity in trading.

It's nothing major and really has zero indication of performance. But man, do retail traders love a stock split, sending $AMZN up 11% after hours. And sure, a $10bn stock buyback program sounds great. But, Amazon's market cap is a monstrous $1.4tn, making $10bn ~0.7% of the float.

In reality, this could be construed as a negative for the firm. A bear might argue that there's a hell of a lot more the great Amazon could have done with that cash than just buy back shares. Still, the Street is freaking out about it, so we figured we had to tell you. You're welcome.

BTC is Back — For the first time maybe ever, a government has actually caused crypto markets to rise rather than the usual 30% cliff dive they've been known to induce. I think I speak for the whole of the digital currency space when I say: Thanks, Joe.

So, what happened? Well, Joey B happened, of course. The Biden administration leaked, released, and then signed an executive order on regulating the digital currency market. Wild West no more?

Well, not exactly… yet. The order, creatively titled "Ensuring Responsible Development of Digital Assets," covers a range of topics from economic risks to national security risks to "possible benefits." 

Basically, the order requires agencies to evaluate potential impacts related to the issuance of a digital dollar. The DoJ, at the same time, is tasked with reviewing any laws that may need to be updated or if any fresh, new legislation would be beneficial to the space.

So, nothing major, except the jumps in price digital assets saw. At the time of writing, the total crypto market cap had jumped 6% on the day, with BTC storming 8.3% and ETH posting a 5.5% gain. 

It's likely that precisely because the order indicated no major changes, cryptoheads were loving it. Imminent executive action against the space had been spurring an oversupply of FUD for months, so now, knowing that nothing major is coming soon brought the FUD meter down a few degrees.

Executives in the space were quick to show their support. FinTwit blew up with way too many "OMG thank you Joe!" style tweets, effectively trading FUD for cringe.