“The CBOE Volatility Index dropped to 19.90, -1.99, -9.1%, as the continued resiliency in the market staved off hedging interest” — Paul Ebeling
US stock market extends rally to a 3rd day running
DJIA +35.32 at 35754.75, NAS Comp +100.07 at 15786.98, S&P 500 +14.46 at 4701.21
The S&P 500 gained 0.3% and came up just short of a closing record high, while the NAS Comp (+0.6%) and Russell 2000 (+0.8%) outperformed. The DJIA lagged increasing just 0.1%.
- S&P 500 +25.2% YTD
- NAS Comp +22.5% YTD
- DJIA +16.8% YTD
- Russell 2000 +15.0% YTD
WTI Crude Oil futures settled higher by 0.7%, or $0.48, at $72.43/bbl, Gold futures settled less than $1 higher (+0.1%) at $1,785.50/oz, and the US Dollar Index sliped about -0.5% to $95.90.
The leading gainer among stocks on our meme stock watch list is Bakkt Holdings Inc. (NYSE:BKKT), a platform for buying, selling and holding digital assets. Since its initial public offering in an October SPAC merger, the stock has soared to a gain of around 320%, before dropping back to a post-IPO gain of around 44%. Shares traded up Wednesday at 17.40, or 29.75% on no specific news
Paysafe Ltd. (NYSE:PSFE), a payment network based in Bermuda. After reporting Quarterly earnings in mid-November, Paysafe shares dived more than 42% in a single day. The stock bounced higher by more than 17% Wednesday morning, following the company’s announcement that its CEO bought about $1-M worth of the company’s stock on the open market Monday. PSFE closed Wednesday at 4.28 or +17.58%.
AMC Entertainment Holdings Inc. (NYSE:AMC) traded up 4.22% on no specific news. Given the big fall in the share price over the past month, -20%, another run at short sellers may be sending the stock higher. According to Fintel data, about 17% of AMC’s total float is sold short, and it takes nearly 2 days to cover the shorted total of around 87.5-M shares.
The CEO’s of 6 major cryptocurrency companies made their Washington debut Wednesday, broadly embracing regulation amid explosive growth in digital currencies.
Testifying before the House Financial Services Committee for nearly five hours, executives from Coinbase, Circle, FTX, Bitfury, Paxos, and Stellar Development Foundation fielded questions from lawmakers on understanding the crypto space, ransomware, how to protect investors against losses and fraud, and providing services for the unbanked.
Amid the questioning, many of the executives voiced support for a new regulatory framework, rather than using existing banking laws to regulate the crypto space.
“The solution is not to shoehorn digital asset operations into a regulatory system designed for earlier generations of financial assets,” Paxos CEO Charles Cascarilla told lawmakers.
Brian Brooks, former Comptroller of the Currency under President Trump (45) who now serves as CEO of Bitcoin mining firm Bitfury Group, questioned what he called hypocrisy within the regulatory system.
“Is it consistent to take the position that only banks should be allowed to issue stablecoins, but then fail to grant bank charters to the largest issuers of stablecoins?” Mr. Brooks pointed out.
“Does it make sense to bring enforcement actions challenging certain crypto assets as unregistered securities, but then fail to allow those assets to be registered and trade on a national securities exchange?” he asked.
Stablecoins and internet-native capital markets are now too big to ignore.
The US Economy
- Job openings increased to 11.033 million in October from a revised 10.602-M in September.
- The weekly MBA Mortgage Applications Index increased 2.0% following a 7.2% decline in the prior wk.
- Wkly Crude Oil inventories decreased by 240,000 bbls after decreasing by 910,000 bbls during the previous wk.
Looking Ahead: Investors will receive the wkly Initial and Continuing Claims report and Wholesale Inventories for October Thursday.
As Russian forces mass along Ukraine’s border and the United States shows no sign it will do anything beyond diplomatically trying to forestall a conflict, the crisis exposes not only the feeble framework of the Y 1994 deal that bargained away Ukraine’s nukes for temporary peace, but also Russian President Vladimir Putin’s assessment that he can take advantage of a weak Biden administration.
Sunday marked the 27th anni of the signing of the Budapest Memorandum, an agreement inked in December 1994 by Ukraine, Russia, the US, and the UK in which Ukraine agreed to give up its nuclear arsenal, which was the third largest in the world at the time, in exchange for sovereignty and security. The signatories of the pact also promised not to act hostile toward Ukraine. All those guarantees are now being broken or challenged by Russia.
Have a prosperous day, Keep the Faith!