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Good morning, and happy Friday.
There’s green on the screens this morning as U.S. Futures edge higher ahead of today’s dump of retail sales data. The futures follow stronger showings in Asia and Europe where a risk-on mood is lifting just about all sectors, even tech.
Meanwhile, the crypto market remains as volatile as ever with Bitcoin hovering around $50,000, off steeper lows. Elon Musk has doubled down on his criticism of BTC mining’s “fossil fuel use, especially coal.” But, somehow, he’s okay with Dogecoin, and that’s sending the joke coin 🚀. Go figya.
Let’s see what else is moving markets.
Markets update
Asia
- The major Asia indexes are closing out the week on a promising note. The Nikkei, pounded earlier in the week, is up 2.3%.
- Thursday was a rough one. The MSCI China fell into bear territory, down more than 20% from its February high. It’s up 0.2% today.
- Shares in Alibaba were down nearly 5% in Hong Kong today after the Chinese e-commerce behemoth reported its first ever quarterly loss on Thursday. The culprit: a hefty $2.8 billion fine it had to pay Chinese state regulators.
Europe
- The European bourses are rebounding today with the Stoxx Europe 600 up nearly 0.6% at the open. Just one sector—basic materials—is in the red this morning, a huge change from yesterday.
- Shares in Rolls-Royce are flat this morning after CEO Warren East confirmed it’s in talks to perhaps supply Boeing with new jet engines for the planemaker’s new aircraft program. A programming note: Rolls’ Warren East will join us at Coins2Day Global Forum next month to discuss the aerospace sector, and its green future.
U.S.
- U.S. Futures are holding onto their gains this morning. That’s after all three major averages snapped a three-day slide yesterday with the Dow climbing 433 points.
- Still, the Big Three are heading for a down week with the Nasdaq the worst of the bunch, off 4.56% since Monday.
- Coinbase Global informed investors yesterday it plans to offer “joke coin” Dogecoin in the coming weeks. Investors are shrugging off the news. Shares are flat in the pre-market after the crypto exchange closed down 6.5% on Thursday. Dogecoin though is up more than 20%.
Elsewhere
- Gold is climbing again, trading above $1,830.
- The dollar is down, a good sign for U.S. Futures.
- Crude is up with Brent trading above $67/barrel.
- Bitcoin is down again, trading around $50,000. It’s down more than 11% in the past week.
***
By the numbers
1.00%
The April retail sales number comes out today before the bell, a data point that will grip the markets at the start. The consensus estimate is for a 1% monthly rise, further proof the engine of the U.S. Economy—the consumer, flush with savings—is roaring back. It should also tell us that, for many retailers, business has returned to pre-pandemic levels. U.S. Futures are trading as if the expected good news for retailers translates to good news for the markets; the good news=good news formula has been missing from the markets for much of the past quarter.
-36.5%
Tesla bulls have had a rough 2021. Shares of the EV pioneer are down 18.99% year-to-date. Even as the Nasdaq rebounded yesterday, TSLA fell a further 3.1%. Making matters worse, since its Jan. 25 all-time-high closing, the shares are down 36.5%. That’s not a slump. That’s a collapse. The bull argument would say, “Don’t bet against Elon Musk. He’s revolutionizing the auto sector, and, after this swoon, the share price represents a real buying opportunity.” The bear case says Tesla still isn’t making much money selling its cars, and that its fat-margin business of selling pollution permits to other automakers is fast going up in smoke, and that its crucial China market is struggling. Its move into Bitcoin was a genius stroke of creative accounting, but now it’s souring on BTC, waking up to the complaints of ESG hawks. No wonder investors are having second thoughts.
-37.7%
Cathie Wood is having a worse stretch than Tesla bulls. By early February, investors had pumped up her tech-heavy Ark Innovation ETF (ARKK) to new highs, pushing it to a $60 billion behemoth. It’s since fallen by 37.7%, to slide below $40 billion in assets yesterday, Bloomberg reports. Momentum stocks are her forte. That strategy hasn’t fared well in this environment of rising yields and the rotation from growth to value. Nonetheless, she’s doubled down in the period, repeatedly buying on the dip. As of this morning, ARKK’s top five holdings are: Tesla (-18.99% YTD), Teladoc Health (-33.6% YTD) Roku (-18.7% YTD), Square (-9.4%) and Zoom (-13.9%).
***
Have a nice weekend, everyone. I’ll see you back here on Monday… But first, there’s more news below.
Bernhard Warner
@BernhardWarner
[email protected]
As always, you can write to [email protected] or reply to this email with suggestions and feedback.
Today's reads
Housing boom. Prospective homebuyers, there may be some good news—or, more correctly, less bad news. New data shows soaring house prices "could be reaching its climax," Coins2Day's Chris Morris reports.
Retiring on your crypto riches. Can you pad your 401(k) or IRA returns by buying crypto—i.e., the likes of Bitcoin, Ethereum, Dogecoin? Ben Carlson of Ritholtz Wealth Management digs into the possibility, and the tax implications.
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Market candy
Quiz time
If Bitcoin were a country—I love these thought experiments—it would rank pretty high on the world's list of biggest polluters—on account of the energy required to mine the digital coins.
That said, here's today's quiz question: True or False, Bitcoin would be just as big as oil giant Norway in terms of annual energy consumption?
Answer: not quite. Bitcoin ranks a bit below the Scandinavian country, but ahead of Greece, Chile and Czech Republic. My colleague Sophie Mellor breaks down—in charts—the many ways that Bitcoin mining has become unquestionably bad for the health of the planet.
