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- 🔔 Will rising yields send stocks tumbling?
🔔 Will rising yields send stocks tumbling?
The big story in markets over the past 24 hours is the big bond selloff that saw yields rocket, and big tech take a tumble.
The Nasdaq is down just under 6% on the week so far...
The bond selloff has taken 10 year yields briefly above 1.5%...
Will markets buy the big tech dip or are bonds a more attractive deal?
We discussed this (and more) in today's Opening Belle 👇
About those yields...
Analysts at Credit Suisse say it's too soon to be concerned...
Equities should do just fine until the 10 year hits 2%...
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🔥 Hot or Not ⛔
One stock that's hot... 🔥
Cellular Goods PLC rallies sharply post IPO.$CBX 22.75 +355%— IGSquawk (@IGSquawk) February 26, 2021
Sounds like a phone company, actually a supplier of biosynthetic cannabinoid (CBD) products.
CBX raised £13m as part of an initial public offer that it says was 13 times oversubscribed.
The UK stock placed at 5p but rocketed over 400% to hit highs of 28.5p!
One stock that's not... ⛔
We touched on this one in the podcast...
Last year SPCE made no money...
No surprise there, but analyst expectations are a lot more optimistic for the next couple of years:
Analysts are projecting sales of about $20 million in 2021, growing to $136 million in 2022.
The stock is on track to fall by ~29% this week.
Inflation is taking some of the blame.
Higher inflation should leads to higher interest rates, which hurt stocks with high valuation multiples.
Galactic stock is valued at ~$10 billion.
That’s a huge multiple of the 2022 estimated sales of $136 million...
If yields DO push higher again, companies like Virgin Galactic are sure to feel the pressure again...
Coinbase are doing an IPO, guys!
Except it's not an IPO...
They're listing directly instead 👇
The 'King of SPACs' (and early SPAC backer of Virgin Galactic) is not a fan...
And then sell to retail at $100B or greater, it will be the ultimate form of stock manipulation.
If the stock snaps back at a much lower valuation, each private txn preceding the DL seems manipulative.
Good luck to all the players...I’m sitting out. The process stinks.— Chamath Palihapitiya (@chamath) February 25, 2021
SPAC-blinkered or does he make a good point?
Pre-IPO pumping is nothing new, after all...
As with all things crypto it will be a fascinating ride whatever happens!
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Have a great weekend!