After digging through charts and reading the wires, here are a few random thoughts and market insights for today.
- A WSJ article this morning highlights the flood of money into Money Market accounts. If I remember correctly, on the precipice of the 2008 collapse money was fleeing MM accounts;
- On the same topic, if you want to keep an eye on the state of the money markets, put ticker MINT on your screen. It’s the PIMCO Enhanced Short Maturity ETF. It purports to be a non-fixed dollar money market ETF that invests in the kind of short term paper that will get hit first when the next crisis arrives, and it’s the kind of fund that attracts institutional size money. If you see more than a blip in MINT, your antennas should go up;
- Last night I tweeted that the IG CDX close was less than I was hoping for to lean more bullish. This morning the IG CDX continues to underperform the enthusiasm of the S&P 500 futures (ESU5). There’s a good chance that yesterday’s lows will be the lows for this correction, but I think there’s also a very good chance they’ll get revisited and that won’t feel any better;
- I have taken a full position in the Twitter (TWTR) Jan.’16 25 put / 36 call bull-risk-reversal. My average price is a credit of $0.50. It follows my thoughts coming from a piece I wrote in May on Twitter’s decline;
- Goldman Sachs (GS) is back close to Book Value ($176.66). And if you think they are losing money trading the current volatility I think you will be disappointed;
- The biotech cycle is as real as the internet emerged once broadband became widespread, but we may have seen a valuation peak;
- Names that I will nibble in on more weakness are Mylan (MYL), FedEx (FDX), Cypress Semi (CY) bullish risk-reversals, Viacom (VIAB), Infinera (INFN) and Akamai (AKAM).
Thanks for reading.
Twitter: @FZucchi
The author has a position in AKAM, INFN, VIAB, and TWTR at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
