January 28, 2022

Beware of the Blizzard!!

Hey y’all and Happy Friday! What a week it was on Wall Street. 🤯

Every index rallied into the week’s end. The Nasdaq ripped 3.13% as tech stocks bounced on the back of Apple’s earnings report. The S&P 500 surged 2.44% and the Russell 2K rallied 1.93%.

The S&P 500 snuck into positive territory (YAY!) by 0.77% and even broke a three-week losing streak. 🍀 Here’s the $SPX’s heatmap:

Apple ascended 7% and reclaimed its 50-day moving average after a star-studded earnings report. 🌟 $AAPL is now down just 4% YTD.

10/11 sectors posted gains. Tech tacked on 4.37% and erased all of this week’s losses. Energy was the only loser.

Crypto found some relief as equities turned green. 😪 Ethereum gained 4.75% and now trades back above $2,500. Bitcoin bounced 1.8% to $36,850.

A giant cyclone-blizzard will hit the Northeastern United States this weekend. New York has declared a state of emergency in response, and U.S. natural gas futures surged as much as 12% today on the news. ❄️ ⚡ More on this below.

$DAVE increased 23.7%, $RGC rose 21.7%, and $AFRM marched 17%.

Here are the closing prices:

S&P 500	4,431	+2.44%
Nasdaq	13,770	+3.13%
Russell 2000	1,968	+1.93%
Dow Jones	34,725	+1.65%

Commodities

The Northeast Braces for Impact ☃️

If you live in the Northeastern United States, brace yourself — this weekend is supposed to bring a record-shattering winter storm with snow and winds comparable to a powerful hurricane. 🌪️ ❄️

It’s anticipated that Boston, eastern Massachusetts, and Rhode Island could experience 1-2 feet of snow. The entire storm could impact the coast from North Carolina all the way to Maine, with New York City seeing a possible 8 inches or more of snow paired with 35+ mph winds. 🌬️ New York State has just announced a state of emergency starting 8 pm EST tonight. According to CNN:

“This storm is likely to strengthen at a rate, and to an intensity, equivalent to only the most powerful hurricanes, so the high-end potential of this storm cannot be overstated. But with nor’easters, like in real estate, it will all come down to location, location, location.”

The magnitude of this winter cyclone’s precipitation and wind could result in major damages or power outages throughout the East. Some coastal cities could also see significant flooding. Stay safe out there, everyone!!

Commodities

Friday’s Flurry of Futures ❄️

Following a significant rise in prices as contracts expired Thursday, natural gas futures registered their largest weekly increase since August 2020 as a *gigantic* winter storm closes in on the U.S. Northeast. 🥶

The boost to natural gas futures came after an unprecedented 72% gain in the expiring February contract on Thursday, indicating a textbook short squeeze. 💡 The contract rose to $4.88 intraday, its highest level since late November 2021.

Here’s the weekly chart:

As a severe winter storm approaches the East Coast, demand for heating and power plant fuel could likely skyrocket. Snowfall could total up to 10 inches in New York City, with a foot or more on eastern Long Island. Boston could see up to 2 feet of snow. ☃️ Meanwhile, airlines are already cancelling flights to and from the Northeastern U.S.

Bullets

Bullets from the Day

The crypto exchange Bakkt is down 90% since October 2021. Bakkt went public in October in a $2.1 billion SPAC deal valuing the company’s stock at $50.80/share at its opening. Bakkt shares closed today at $3.61, putting the company’s market cap at around $1 billion. Bakkt Holdings was valued at $10 billion in Q4 2021… ouch. Read more in Bloomberg.

Snow-covered bridge in Pittsburgh collapses right before President Biden’s scheduled visit. A bridge in Pittsburgh, Pennsylvania caved in this morning just hours before President Biden’s scheduled arrival to discuss infrastructure plans… the irony. Ten injuries have been reported, but there were no fatalities as a result of the bridge’s collapse. Read more in Axios.

Apparently it’s taking Melvin Capital — the hedge fund that lost $6.8 billion during the Memestock craze — a looong time to make up for last year’s losses. During the Memestock Madness of January 2021, Melvin Capital Management lost about $1 billion each day of the short squeeze due to its positions on notable stocks like GameStop. Apparently, Gabe Plotkin (Melvin Capital’s fund manager) has a reputation for his strong short positions, but that reputation has certainly been put to the test as Plotkin continues to make up for his fund’s 54.5% Memestock-related loss last year. Read the whole story in the WSJ.

The Biden Administration has confirmed the possibility of economic sanctions against Russia if the country invades Ukraine. Sanctions have not yet been finalized, but some of Russia’s biggest banks and even Putin himself could be subject to U.S. sanctions. Read more in the WSJ.