Welcome back to our weekend reading,
It’s all going up, from Delta cases to markets. You could argue both are driven largely by liquidity, albeit you’d get some funny looks for calling people sneezing as “liquidity”.
There are many potential economic events which may cause bumps in the road – Jackson Hole springs to mind – but for the moment the prevalent sentiment appears to be one of markets continuing to rise no matter what.
I think this tweet sums up the level of psychology we’re dealing with pretty well:
Soldier on greg, the market is behind you (unless it’s not).
Let’s look back on the week.
Do You Take Visa?
That intro led nicely into a topic about crypto, so let’s talk NFTs briefly.
With a recent resurgence of high-profile NFT art purchases in the media, it’s unsurprising that a large corporate would get in on the action – enter Visa.
Visa has purchased a digital avatar for $150,000 USD to “signal their support” for the NFT market, an area which they believe will play an important role in the future of retail, social media, entertainment and commerce.
Visa has built a collection of historically relevant pieces, including some of the first editions of credit cards.
The NFT artwork is named “CryptoPunk #7610” and is the gentlemen with the tragic mohawk and early 2000’s cyberpunk aesthetic below:
Maersk A/S, the world’s largest container-shipping operator, has laid its cards on the table and purchased eight next-generation vessels which are powered by methanol rather than oil-based fuel.
Each of these container vessels cost $175 million USD, due to launch their maiden voyages circa 2024.
According to Bloomberg, shipping accounts for ~3% of global man-made emissions and has been steadily rising for the past decade.
This action by Maersk may be a bold new step in revamping its entire fleet, from smaller cargo vessels to the 16,000 container monsters which are on order at the moment.
For sake of not tarnishing your browsing history, perhaps do not google “OnlyFans”.
Suffice to say, a website whose subscription would be categorised as “entertainment” for a 1980s era investment bank was in the news this week for banning inappropriate content on its website.
Why is this relevant to include in this weekend reading piece?
Well for one its quite funny, but the more important reason is that OnlyFans was poised to tap investment from public and private markets as the business expanded – those ambitions have more or less now been shut down after “pressure from banks to remove adult content” was roundly rejected by its user base.
This is not the first high profile corporate misstep in this area.
If you want to see how this pans out, take a look at the website Tumblr; purchased by Yahoo for $1.1 billion USD, banned adult content which fuelled ~90% of the engagement from their userbase, was sold six years later for $3 million USD.
Sex sells people. Sex sells.
*All numbers in USD from BofA Securities
Equities: $12.6bn into equities
Bonds: $13.3bn into bonds
Precious Metals: $1.4bn out of gold
Cash: $8.3bn into cash
Flows to Know
Largest inflow to investment grade bonds in 7 weeks ($8.8bn)
Largest inflow to treasuries in 5 weeks ($2.5bn)
9th week of inflow to tech stocks ($1.0bn)
Central banks have spurred greater wealth inequality, Wall Street is now 6.4x the size of Main Street
Central bank liquidity and tech stocks moving in symmetry
BoJ leads ECB by 15 years, ECB leads Fed by 10 years
Policy rates in Japan, in Europe & the US
Wouldn’t “Mayonnaise Inflation” make a great name for a band?
Across the U.S. in particular, the rising price of mayonnaise has sparked up hot debate as the contentious issue of “transitive versus structural” inflation rages on.
The length of the articles on this story are unconscionably long for a story about the price of a sandwich topping, but the main takeaways are that hospitality venues are experiencing input cost pressures from proteins and oils – both of which go into mayo in the form of eggs and whatever oil happens to fall out of the factory grease-trap.
There is an index for “Other Fats and Oils”, which is ticking up to 5.8% at time of writing.
Well That’s Convenient Timing
In a very short timeframe after the Taliban moved in to occupy regions of Afghanistan, it has been discovered that the desert nation is sitting atop around $1 trillion USD in lithium deposits – possibly the largest in the world.
The region has been ravaged by various states of warfare for the better part of 40 years (far back enough for the Soviet Union to still be a thing), which has largely prevented mineral exploration of the region.
Now that that situation is in a state of change however, it appears Beijing has its eyes on securing those lithium deposits, proposing a situation of political impartiality and economic investment in order to have access for infrastructure and industry.
Our morning calls continue, please do tune in for a daily dose of market insights and access to some leading experts in the funds management field.
Tune in from 9:30-10:00am AEST, Tuesdays and Thursdays.
Have a safe and enjoyable weekend.
– Max and the Mason Stevens team.
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The views expressed in this article are the views of the stated author as at the date published and are subject to change based on markets and other conditions. Past performance is not a reliable indicator of future performance. Mason Stevens is only providing general advice in providing this information. You should consider this information, along with all your other investments and strategies when assessing the appropriateness of the information to your individual circumstances. Mason Stevens and its associates and their respective directors and other staff each declare that they may hold interests in securities and/or earn fees or other benefits from transactions arising as a result of information contained in this article.