Matt Sheridan, CFA

Senior Lecturer in the Department of Finance at Ohio State

All views are my own

"Those who do not learn history are doomed to repeat it." Santayana

[Matt Sheridan, CFA @SheridanFinance]

We are so back!

The S&P500 closed today at a record high (last high 1/3/22).

This means that every sing Bear Market, Crash, or Correction in U.S. history has been followed by a rally that always has pushed the U.S. stock market to all-time highs.

[Matt Sheridan, CFA @SheridanFinance]

Value investing legend Charlie Munger has passed away at the age of 99. Sad day on Wall Street. RIP

https://t.co/bLnWenushr

[Bloomberg Markets @markets]

BREAKING: The US had its credit rating cut one step to AA+ from the top ranking of AAA by Fitch Ratings, echoing a move made more than a decade ago by S&P in 2011 https://t.co/NDqd70iKWa

[Matt Sheridan, CFA @SheridanFinance]

“Time for you to leave,” Salomon Brothers’ cigar-chomping CEO John Gutfreund told Michael Bloomberg.

With the $10mn he got as compensation for being fired, he started a company that gave people access to all conceivable financial information.

https://t.co/Hj4rf68ScP

[Matt Sheridan, CFA @SheridanFinance]

What stage of the Bear Market are we in if the worlds richest man can change a picture from a bird to a dog & a popular crypto coin $doge that was created as a joke jumped 30% and Wall Street strategists are predicting it could make the FED Ultra Hawkish?

[Jim Bianco @biancoresearch]

Does @elonmusk want the Fed to hike 50 basis points in May?

Keep doing this, and they will!
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Dogecoin (DOGE-USD) rocketed as much as 30% in Monday mid-afternoon trading after Elon Musk's social-media platform, Twitter, changed its blue bird home button into the memecoin's Shiba Inu dog symbol, according to a number of media reports Monday.

Twitter users began to notice the shift at around 1:45 p.m. ET, Bloomberg reported, though doge (DOGE-USD) started rallying 10 minutes before. As of shortly before 3:30 p.m. ET, the token, which Musk is known for touting, changed hands at $0.10.

[Matt Sheridan, CFA @SheridanFinance]

The Fed raised the federal funds rate by a quarter percentage point and signaled it’s not finished hiking, despite the risk of exacerbating a bank crisis that’s roiled global markets.

Target range is 4.75% to 5% the highest since September 2007

S&P500 down 1.65% on the day

[Matt Sheridan, CFA @SheridanFinance]

Very stressful week (felt like a year) after 2 banks failed

Regional bank index is -21% this month

2-year treasury yield dramatically collapsed from 5% to 3.8%

Confusion on what the Fed will do next

Oil fell to $67 barrel

Remarkably the S&P500 & NASDAQ are up this week

[Matt Sheridan, CFA @SheridanFinance]

In 2018 Citadel hired a group of scientists whose weather forecasts were more accurate than most meteorological offices to build out a commodities business.

The bold bet on raw materials has paid off, helping Citadel make a record $16bn in 2022.

https://t.co/Hef0tCbKTd

[Matt Sheridan, CFA @SheridanFinance]

Mixed economic data has something for the soft & hard landing camps

Unemployment rate 3.4% lowest since 1989

CPI lower but only slightly

Retail spending jumped +3%

PPI showed persistent inflationary pressures

Curve still steeply inverted while the 10 yr has climbed to 3.83%

[Matt Sheridan, CFA @SheridanFinance]

Only 33 Days into 2023 and the euphoric Animal Spirits are running wild in the markets

YTD Returns

NASDAQ +16.57%
Carvana (my base case is bankruptcy) +200%
Peloton +113%
Microstrategy +106%
Meta +56%
Tesla +52%
Bitcoin +44%
Bed Bath & Beyond (my base case is bankruptcy) +32%

[Matt Sheridan, CFA @SheridanFinance]

Happy Fed Day Rally for U.S. Equities

NASDAQ ended the day up 2%

The Fed raised rates as expected by 25 bps while Jerome Powell acknowledged disinflation

On the flip side, the FED said ongoing rate increases would likely be warranted & it is very premature to declare victory

[Matt Sheridan, CFA @SheridanFinance]

The end of 2022 ushered in a new King of Hedge Funds.

Ken Griffin moved ahead of Ray Dalio after Citadel recorded a record profit of $16 billion last year.

Its flagship multi-strategy fund delivered an outstanding 38.1% return in a year that saw equities and bonds sell off.

[Matt Sheridan, CFA @SheridanFinance]

Happy 30th Birthday to the State Street Spider (1st US ETF)

$SPY tracks the S&P 500

It helped bring down fund fees, assisted in the acceptance of passive management & exchange traded funds

It still holds the title of the largest ETF in terms of AUM

https://t.co/4s3y8i29CR

[Matt Sheridan, CFA @SheridanFinance]

David Tepper has one of the best track records in the Hedge Fund industry.

He did a rare 30+ minute interview on CNBC's Squawk Box this morning (wish I could post the full interview).

This clip highlights his views on hawkish central banks around the world.

[Squawk Box @SquawkCNBC]

“When the Fed says they're going to do something I tend to believe them,” says David Tepper. “The market says they’re not going to carry forward. I believed the Fed before and I believe them now.”

[Matt Sheridan, CFA @SheridanFinance]

Sad day on Wall Street as the Fixed Income legend Scott Minerd passed away

The $18B Guggenheim Total Return Bond Fund, outperformed more than 90% of its peers for most of the past decade

He was also very strong bodybuilder-- at his prime he bench-pressed 495 pounds for 20 reps

[Bloomberg TV @BloombergTV]

Scott Minerd, the Guggenheim Partners chief investment officer who was regarded as one of the kings of the bond market during its four-decade bull run, has died. He was 63 https://t.co/Q2QSjYjT4M

[Bloomberg @business]

BREAKING: Former FTX CEO Sam Bankman-Fried has been arrested in the Bahamas, the country’s Attorney-General said in a statement https://t.co/kyDSrVqj8Q

[Matt Sheridan, CFA @SheridanFinance]

Outstanding jobs numbers today & the markets hate it!

US employers added 263K more jobs (200k est) & wage gains were up 5.1% YoY. Unemployment rate held at 3.7%

It's a situation of good news = bad news since it forces the Fed to remain hawkish and delays the anticipated pivot.

[Matt Sheridan, CFA @SheridanFinance]

One of many reasons trying to time the markets is a fools game.

[Matt Sheridan, CFA @SheridanFinance]

Nothing but green on the screen!

The U.S. stock market ripped higher on the back of inflation (7.7%) slowing more than forecast.

NASDAQ +7.35% (including today has only been up 7%+ 4 days since the 2008 crisis).

S&P 500 +5.54%

10 yr yield falls to 3.8% (from 4.2% on 11/7)

[Matt Sheridan, CFA @SheridanFinance]

U.S. dollar is the strongest in 2 decades due to the Fed raising interest rates to fight inflation + the U.S.’s economic health is better than most

The dollar's strength has become much of the world’s weakness, leading to a potential debt crisis in EM

https://t.co/bMd8JUTkfq