This week, we’ve started to see the price of passive ETF investing. A rising number of ETFs have funneling money into the same large cap tech stocks leading to elevated valuations. These flows are now reversing and we are discovering the inherent problem of ETFs aiming to trade near the market close. ETFs promise to […]
Market Updates
Liquidity Flooded Crypto in 2021
Liquidity flooded into crypto in 2021 as venture capital flows into the sector were larger than all prior years. Yes, the industry is new and the history of flows is short, but the surge of capital into the sector has impacted valuations. The start of 2022 has seen established crypto assets start soft, however, there […]
Peak Market Uncertainty in 2022
We face peak market uncertainty in 2022 as rate hikes give way to 2021’s easy liquidy. The Fed will stop expanding the balance sheet by March 2022 and it plans three rate hikes next year. This assumes core inflation falling sharply, whereas we see core inflation staying high even as headline inflation eases next year. […]
Fed follows Biden on Inflation
The Fed follows Biden on inflation with Chair Jay Powell articulating a faster taper this week. There has not been any new material inflation data since the Fed announced gradual taper plans, but the Biden administration has pivoted to an inflation focus. However, with rising inflation, high valuations and policy rates near zero, we are […]
Signs of Market Froth
Signs of market froth are rising in both digital and traditional assets. As we show, 10-20% fees on transaction value makes no economic sense, but that is the reality on Ethereum today. This points to expectation of higher asset prices offsetting the punitive fee. Rivian, the recently IPOed electric vehicle maker, reached a $150bn market […]