Mercury Rising (TWTW – Dec 6-10, 2021)

Mercury Rising – Well, obviously I am not talking about actual mercury … but rather about that … what was it? 39 years high in terms of US Inflation reading at 6.8% (WOW …)

Not to worry though, that is WITH food and energy … (which yes, we all use, in one way or another). If you strip these out, oh Joy, we’re “only at 4.9%”…

Read more => click HERE!

Markets? Not hugely bothered – despite notion that Jay Powell’s FEDs will likely a) wind down bond purchases sooner/faster and b) rates may rise sooner in 2022.

On the week, overall, the most important takeaway is that OMICRON has seemingly been deemed less threatening than market action earlier suggested, respectively some are even suggesting it will lead to a further weakening of the COVID-19 virus. Hallelujah to that, I say.

On the week, markets did very well overall, particularly early in the week, resulting in the following gains mostly, from the prior week:

Sectors:

  • Energy and materials showing strongest rebound (after former obviously hit probably the hardest …)
  • Tech in Canada – flat on the week, while in the US, mega cap tech showed strength on the rebound, and on Friday, Oracle had a very strong day

Themes:

  • Blockchain … under the weather …
  • Metaverse – early post prior week launch, but weaker despite overall market bounce. Interestingly, looking at the names in Evolve’s MESH, for instance, it isn’t as if one can find there a whole bunch of unknown names … rather, it looks like a repackaging exercise of many Tech heavyweights all presumably in one form or another – evidently … – involved in what the METAVERSE will turn out to be … which I understand to be 3D, all immersive Internet access (vs current stare at one’s screen looking for answers…) Of note – First Trust apparently has also filed in the US to launch a Metaverse ETF. Look for LOTS … overtime … of $ to seek exposure to that “theme”, as it isn’t every day that we can look at capitalizing on the next generation “internet”. More below on this …

 

ARK – got hit really hard recently, with a vast majority of portfolio holdings companies being in bear market territory, according to what I was looking at. ARKK bounced back nicely at some point during the week, almost up 10% from the lows, if in fact not up even a tad more. What I am not liking, however, is that ultimately, it ended the week again on a weaker note. Obviously Musk sold some more TSLA shares, which presumably didn’t help … BUT there are many other moving parts within the ARK construct … and one can be left to wonder, of late, I think, whether the story is effectively over for now, or whether better times are just around the corner …

Peloton – there is a stock that got totally trashed this year … and one which on Friday apparently was weaker on account of a) a CREDIT Suisse downgrade, and b) being part of a Sex and the City revival episode plot … WTF? that hit the stock?

Fines … Italy fines Amazon $1.3 Billion (for … being a bully … ok … for leveraging its market dominance against independent sellers … imagine that …

Many different ways of getting exposure to Canada, with significant differences in terms of underlying sector exposure, as I pointed out earlier this week:

certainly worth considering when looking at how you view the outlook for Financials, respectively Energy, in particular, heading into 2022.

Back to the main takeaway from this past week:

 

after a recent significant spike in volatility, we’re seeing volatility retreat steadily this past week, illustrating receding fears as far as OMICRON.

So, back to Metaverse. Evidently the “theme” is far reaching, and broad in that reach, and evidently, it is something which doesn’t happen everyday. Specifically, I don’t know about you, but I am guessing for most of us, this whole “internet” thing has remained the same for quite some time – look at your screen, ask google, poke around, but always while basically staring at your screen and viewing most results in 2 D. The idea that we are moving toward the nextgen Internet, when users end up “in it”, in a 3D, interactive and engaging way is … well, I guess the way it’s going to be.

My worry though going in, was that we’d just find names that are already represented in all the other “themes” out there – CYBER; Gaming; Cloud; etc. First cut at checking this out suggests this is NOT the case, with the largest overlap (which sort of makes sense I suppose, because gaming has been “internet 3D” for a while already, is with – in Evolve’s case HERO. At that though, it doesn’t look like a sizeable overlap (4 names which inside HERO make up 38% of Assets, but inside of MESH, only under 16%). So bottom line is – lots of names inside MESH aren’t found in the other “themes”. MESH, btw, says it’s actively managed – I am guessing this is in terms of names selection – because otherwise, it looks like 25 names equally weighted (presumably rebalancing to 4% fairly regularly).

Now this is a space that warrants being kept a close eye on in my book, and of course in the interim, it will be interesting to see what kind of traction MESH gets, also in relation to MTAV from Horizons ETFs, which is, itself, using Solactive as far as index provider, for a portfolio that looks at the onside to be comprised not just of 25 names, but of double that, with weightings that unlike MESH, aren’t equal, but rather must be market cap weighted.

In terms of the “original”, which launched in the US last June, already, here is what it looks like => click HERE!

what does looking at these 3 tell me? That you can expect performance to vary possibly significantly, on account of the names and weighting of the names in the respectively portfolios. Stay tuned! Some are pegging the METAVERSE as a $1 Trillion business in coming years … Will you put some MESH or MTAV in your stockings this Christmas?

Good luck!