5-Chart Friday (4/16/21)

By Charlie Bilello

16 Apr 2021

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5 charts from the past week that tell an interesting story in markets and investing…

1) A Rising Tide

…lifts all boats.

96.4% of stocks in the S&P 500 are above their 200-day moving average, the highest % ever.

2) The Free Money Effect

If you give the American consumer free money, they will spend it.

US Retail Sales surged to new highs again in March after the 3rd round of stimulus checks took hold. Sales are now 14% above pre-covid levels.

With US consumers on a buying spree, the demand for imports has surged, with the US Trade Deficit moving to its highest level ever.

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3) The Definition of Inflation

Too much money continues to chase too few goods, leading to higher prices almost everywhere you look (see here for my full post on this).

This is just starting to show up in official inflation statistics, with Import and Export prices rising 6.9% and 9.1% over the last year, the highest rates of increase since 2011.

The Consumer Price Index (CPI) in the US increased a more modest 2.6% in the past year, but a +3% number is likely in the coming months.

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Global Inflation rates are trending higher after falling sharply last year…

4) Crypto Fever

Crypto fever is accelerating, with all of the largest coins more than doubling this year. The leader: Dogecoin, which is up more than 8,000%.

Bitcoin moved above $64,000 this week, continuing its record run…

Right on cue, the top 2 apps in the App Store right now are Robinhood and Coinbase, the leading brokerages for Crypto.

Coinbase ($COIN) went public this week with its market cap hitting a high of $85 billion on the first day of trading. This is more than 10x its last funding round as a private company at $8 billion back in 2018. Earlier this month Coinbase reported 56 million users, a 65% increase over the last year. Estimated revenue in Q1 surged to $1.8 billion, a 942% increase from the same quarter in 2020.

5) SPAC Supply > Demand

A record $100 billion in SPACs have been issued so far this year, nearly a billion a day.

The pace has been slowing of late as supply appears to be starting to outpace demand. Further evidence of this can be observed in the performance of the SPAC ETF ($SPAK) which is now down 11.5% on the year versus an 11.5% gain for the broad market.

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One of the most prominent SPACs of 2020 (Virgin Galactic, $SPCE) was up over 150% YTD in mid-February and is now down 1%. This is a 63% decline from its high.

Here’s a drawdown summary of the largest holdings in the SPAC ETF ($SPAK)…

And that’s it for this week. Thanks for reading.

Have a great weekend everyone!


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