Bad Omens: China, Crypto, IPO, Woods and Insiders

11 gen 2022

Buyers in the US stock market were again uncomfortable yesterday. There were no new reasons on the horizon: all the same talk about tightening the Fed's monetary policy. Meanwhile, the number of bad omens is growing.

The point is that although the US stock market as a whole seems to be in order, some of its elements (the most extreme) or other risky assets are already being sold out with might and main. In today's review, we just want to talk about these early signals. We have already written about some of them earlier, but we will repeat ourselves in order to form a more complete picture.

The US tech sector in the form of the Nasdak index added almost 30% at the end of 2021. But at the same time, a similar Chinese index lost about 50% (!).

Or here's another fact. Katie Woods, who tripled investor investment in 2020, managed to lose over 40% in 2021. Once again: with the market growing by 30%, Katie Woods, when buying, managed to show the result in minus 40%. Why is that? Because it works with the most extreme assets that have just started to crumble.

These assets are extreme also due to the riskiness. By the way, about the most risky assets. Our entire cryptocurrency market Bitcoin has lost about 40% over the past couple of months. And somehow the predictions about 100K or 500K per cue ball are no longer heard.

But all these are links of one chain. It's just that at first the most risky assets fell down, and the rest will follow.
Well, and a few more words about risky assets. 2021 was a record year for an IPO. But in fact, the year was a year of a record number of disappointed expectations and investors. Of the 50+ U.S. tech companies that went public in 2021 through an IPO, SPAC, or direct listing, only one company is less than 20% below the peak price. More than 20 companies out of 50 have lost at least half of their value compared to their peaks.

We have already cited an interesting fact: American billionaires sold $ 42.9 billion in shares by the beginning of December 2021, which is more than double the $ 20.2 billion sold in all of 2020. It would seem that everything is growing, the prospects are sky-high - we must take it. But people who perfectly understand the real value of the company and the state of the markets are selling, and in record volumes.

In general, if we combine all these facts into a big picture, we get the classic flight of rats from the ship. Moreover, these are only the first rodents so far, the rest will follow them, because the ship is doomed and it is only a matter of time until it finds its reef and it does not matter if it is an increase in the FRS rates, a new wave of a pandemic, political destabilization or an energy crisis.