Nasdaq Death Cross Crystallizes

MARKET MOVERS

• Blackstone’s new real estate play: the rent-to-buy market. Blackstone has been building up its residential property portfolio in the US. Last year, it spent $6 billion to buy Home Partners. This is a company that offers a popular home finance model called rent-to-buy. If four out of five Home Partners customers remain renters, that means Home Partners and Blackstone are really more corporate landlords than home financiers. Source(3:51)

• The European Union is open to cryptocurrencies including Bitcoin or a digital euro but regulations must first be strengthened to prevent fraud, EU Commissioner for Home Affairs Ylva Johansson said at the Munich Security Conference. Her statement made clear that Europe is more receptive than China, which recently moved to ban all cryptocurrency transactions.

• Surging U.S. share buybacks offer support to a sputtering market. The 10 biggest repurchases for S&P 500 Index companies last quarter totaled $86 billion, up almost 30% from a year earlier. Buybacks are surging as companies tap cash hoards amassed during the pandemic. Many cheer the efforts to boost per-share earnings and potentially stock prices. The trend is expected to continue in 2022. Read more here.

• Existing-home prices jumped 15.4% from a year prior in January. It’s the latest sign that last year’s hot housing market has continued into the new year even as mortgage rates rise and the supply of homes for sale hits another low. Purchases made by real estate investors could help explain the jump in home sales. 22% of homes in January were purchased by individual investors or buyers searching for a second home, up from 17% in December.

• Fidelity launches physical bitcoin ETP in Europe. Fidelity’s Physical Bitcoin ETP, which will be available to professional and institutional investors in Europe, is domiciled in Germany and listed on Xetra in Frankfurt. The product will start trading on Zurich’s Six in the coming weeks. The ETP has an ongoing charges figure of 0.75 percent and launched with about $6mn of assets. Read more here.

• Homes are flying off the market in record time. 57% of homes that went under contract during the four-week period ending Feb. 13 did so within just 2 weeks of being listed — an increase of 6% from a year ago, according to new Redfin data. The overall shortage of homes for sale is the main culprit for rising prices and feverish demand. Read more here.

WHAT TO WATCH

• Death cross crystallizes in Nasdaq Composite on Friday for the first time in 2 years, in a bearish sign for the stock market. History suggests this occurrence could weigh on the broader stock market over the shorter term, however, it is unclear if the formation of the downbeat pattern, closely followed by market technicians, signals more pain ahead or simply affirms a downtrend that has taken shape in markets. Read more here.

• America’s largest frackers plan to keep oil production in low gear this year, adhering to an agreement with Wall Street, even as prices approach the $100-a-barrel mark for the first time since 2014. Three of the largest shale companies, Pioneer Natural Resources Co., Devon Energy Corp., and Continental Resources Inc., are pledging austerity despite a tightening oil-market supply.

• JPMorgan expects a string of nine straight Fed rate hikes. They said they now look for the Fed to hike 25bp at each of the next nine meetings, with the policy rate approaching a neutral stance by early next year. The economists said a feedback loop may be taking hold between strong growth, cost pressures, and private sector behavior that will continue even as the intensity of current price pressures in the energy sector eventually fade.

• The inflation risk is declining, says Kris Sidial. The inflationary narrative and rate hike are no longer the true hazards. The market is slowly digesting the narrative and adapting to it. This market is completely different from the markets we've seen in the 70s and 80s because there is a structural bid that exists from the growth of passive investing and the fact that so many large institutions have mandates. That structural bid is keeping this market propped as opposed to the previous decades. Source(44:45)