There’s a quantifiable level of chaos in the global markets right now and the market gods are deciding the fate of the S&P’s course with 6 weeks till a new year dawns. This week I will focus on more equity driven plays with a minor synopsis on the macro landscape.
We are in the aftermath of an extremely volatile earnings season and a repricing in the energy markets. The European economy is stagnant, Brexit is going badly, global trade policy is changing China’s relevance, GE is reminding me of Bear Sterns and California is burning along with Bitcoin.
Short FAANG, long BAT. The last few trading days gave me something to think about when it comes to U.S. and Chinese tech stocks.
Facebook is now 37% off it’s all time highsand this New York Times article show what a lousy job they are doing of trying to deflect the blame from the data breach of tens of millions of users. They continue to ignore calls that their platform has become an instrument of government propaganda in Myanmar, India and Germany. https://www.nytimes.com/2018/11/14/technology/facebook-data-russia-election-racism.html
Apple is down 20% post EPS and there’s the supplier issue to worry about. Their supply chain guided earnings lower signalling a slowdown in orders from the golden child of tech. It’s really one of the biggest drivers of the index.
Amazon isn’t looking any prettier.
Netflix is a technical disaster, down 36% though still up 50% year to date.
Google has smashed through all its moving averages and a break below 1000 could lead to a more sever cascade.
On the other end, Alibaba is showing signs of technical divergence and a series of higher highs and higher lows.
Tencent is coming very close to knocking on that door.
Admittedly there doesn’t seem to be any definitive signs of a turnaround for Baidu, a crude reminder that blind optimism will likely still cost you at this point.
Market structure means the issues for one of these companies are an issue for everyone.
On that note, check out TTTN US. It’s an ETF that just launched this month. It tracks the 10 largest Chinese internet companies and their 10 largest U.S. peers — a bet on both when the time is right.