After the Boys of Summer have gone

 

Summer is over. Well not officially, but the masses are ready to get back to a little more normalcy. The Delta variant is still causing some issues with those plans, but we're starting to see people move about more. Let's hope the trend continues and we're able to keep the virus at bay. 

In this week’s post, things will be a little different than before. I’ll be sharing some of the best of the past week, but also some of the best things from my summer “break.” A few of them are not finance specific.

As the summer came to an unofficial end in the States, I wanted to take a look at how the summer looked from a performance and volume perspective. For the most part the ‘Sell in May’ mantra was not a good idea. US Tech, via the NASDAQ 100, was the strongest of the major global indices I looked at, up by about 12% since the beginning of May. The numbers were higher until this week's selloff. Brazil’s Bovespa was the strongest for some time, but has been in selloff mode since the middle of June. The SmallCap US names, via the Russell 2000 index, have been flat for most of this period and are off 70 bps as of Friday. Most major Asia indices were negative, except the Nikki. Japan has turned the corner and been moving higher for the last few weeks.

On the turnover side of the coin, Asia Pacific saw an increase in turnover volume (in USD) over the last two months. That’s not surprising with all the volatility we’ve been seeing out of China. Europeans know how to take a proper summer holiday, but that’s a pretty large drop in turnover in July and August. North America looks like it’s starting to top off a bit, but not a crazy drop off yet. US volumes are still strong from retail traders.

Equity Capital Markets (via Refinitiv’s IFR)

Even with the four-day week in the Americas and the Jewish holiday on top of that, the ECM desks were still super busy last week. It was mainly secondaries with 21 deals getting done totaling $11.5B and accelerated book blocks(ABB) of more than $5B plus convertible offerings totaling $3.7B. That’s a busy week with no IPOs and a limited amount of SPACs. Europe was a bit lighter with really only $5.6B of ABBs.

This week the IPO market starts back up again with 10 deals expected to price in the US raising north of $3B. Two of the larger listings scheduled are Thoughtworks @ $700M and On’s @ $622M.

Best of the Week

With Quad witching happening this Friday, I thought it was a good idea to share these two videos. The first is a nice shorter video from TastyTrade. They review some of the basics with a touch on some of the options chatter you might hear. In this session, Jacob joins Tom and Tony to look at a specific example of this: the oscillations of volatility around expiration dates. The second session is Brent from SpotGamma joining Kevin on The Market Huddle* to talk about some tendencies he’s seeing around expiry. Both are referring to similar impacts for different audiences.

Effects of Expiration - Watch time: 20 minutes

Biggest Thing in Macro (guests: Lyn Alden, Brent Kochuba and Kuppy) - Watch time: 120 minutes 

*Brent starts on the options market at the 1hr mark, but the rest of this episode has a ton of value. The first hour is a conversation with Lyn Alden around macro history and what’s important now. After Brent, Kuppy joins to talk his Uranium trade. 

Author Ben Mezirch joins the TIP podcast to talk about his new book. Ben is the author of ‘Bringing Down the House’, ‘Social Network’, and ‘Bitcoin Billionaires.’ The new book dives into the whole meme stock saga from the major players we all know to individuals that the news did not cover. One more thing on this topic was from this week. Below is a screenshot of the entire GameStop Q2 earnings conference call. It was a whole 7 minutes, which included about 20% of intro & exit from the operator.

The Antisocial Network w/ Ben Mezrich - Listening time: 56 minutes

The CEO of ProcureAM is talking his book in this episode. Their Space ETF (UFO in the US and YODA in the UK) invests in companies that benefit from further exploration of space. I found this conversation fascinating because I think Andrew has a bit more realistic approach to this segment.

Andrew Chanin - Space. The final frontier. Shuttles, Hotels, Colonisation & Meteor Mining - Listen time: 38 minutes

Bubbles are everywhere lately. This Tweet points to an article from the Sunday Times in London. The article highlights a recent regulation change that will require new EV chargers at home and work to be automatically set to shut off from 8am to 11am and 4pm to 10pm. According to the article the UK has about 300k EVs on the road. This shows a few things in my mind. First, we’re pushing the EV/ESG initiative but our infrastructure is not ready for it. Second, like anything else in finance people have taken what’s possible and turned it into what’s probable and even what’s automatic. 

Reality Dawning - Sell the EV dream of ease of use

Todd Simkin is an associate director at Susquehanna International Group (SIG). He’s been with SIG for about a quarter century and has led the firm’s education and trader development programs, where they famously make every employee learn the math and strategy of poker. This is a wide ranging conversation that doesn’t touch all that much on the trading itself, but more about the thinking process around it and the firm’s culture.

Todd Simkin: Making Better Decisions - Listening time: 73 minutes

Best of Summer 

The IPO markets are about to explode again after taking a breath like I did with the blog. This is a nice report summarizing what’s expected for the US market.

Fall 2021 IPO Preview: An Active End to a Record Year

This one talks about some of the stories told around price moves. Traders and investors always want a narrative. Sometimes I think we spend too much time figuring out the story rather than just reacting to the price move.

Price Rules Everything Around Me

Polina has a great blog. Over the summer she wrote a post about turning 30 and shared 11 lessons that she learned in her 20s. I liked this one because it reminds even those of us that are much older, I’m writing this summary on my 44th birthday, some of the important things in life.

The Profile: The athlete building a business empire & America's biggest digital media company

As someone that reads pretty quickly and listens to some content faster than 2.5x at times, I found this article useful. My favorite advice from this article, which has been echoed by some others, was don’t be afraid to quit. Stop reading books you find low value in. I’ve done that 3-4 times in the last year. The cool thing is Audible offers some refunds for audio books. I’ve only done it once.

How to Remember What You Read

Nice quick Twitter thread on how your career evolves. For readers at the beginning of their careers, this is a good roadmap for some things to focus on.
Career Evolution: What you're paid for

One for the Road

No additional link here this week. Just a note on some of the things all Americans probably felt over the weekend, as we marked the 20 year anniversary of 9-11. I listened to about half a dozen podcasts with interviews and watched way too many TV programs covering that day and the events that led up to it. I went through a myriad of emotions over the weekend. I was angry with those that carried out these horrific attacks. I was disappointed with the morons in government for letting this happen. I was sad for those who lost loved ones like my former colleague "Trading Andy" Friedman as well as those thousands of soldiers in the 20 yr war that followed. But then I was thankful for the colleagues that helped a very young 23 yr old get home that day. I was proud of the way we reacted as a country to support one another. It was a weird weekend because those emotions came and went at random times. I was annoyed at myself, because my story was nothing compared to thousands of others that experienced so much more fear, pain, and sadness because of this. Exercise and physical labor helped me with many on the negative side.

Thanks for reading. I hope you have a wonderful week. 

Michael