Inflation comes in hot, all eyes on Fed meeting.

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Welcome newcomers to Swaggy's Top Stonks and thank you for subscribing.

If you are new to the letter I'm happy to have you here. Exciting times ahead as we'll be merging content from various creators, bringing you (one of) the most inclusive market-trends newsletter on the Internet.

Some things to look forward to in the near future are going to be:

• A new "macro trends" edition of the newsletter that will be using charts and data from our upcoming premium dashboard that is currently in BETA testing.

• This NEW content will likely range from interest rates & inflation, commodities prices, and other macro (unemployment rate, GDP, fed funds rate, CPI, etc), as well as charting comparisons between all the data.

• Then, scope out which NFTs are seeing exponential growth and how exactly how correlated is the growth to their respective social platforms.

• and much, much, more!

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Today's Letter

• Market Update

• Trending Cryptos

• Top Meme Stocks

Market Update

I stand before you a humbled man after last week's market action, one of the worst since March 2020. Another week added to the list of Ls on top of our markets being down 20% YTD, lord have mercy. The good news is that this "bear market" could be much much worse. What is starting to give me hope is the fact that short-positions are increasing and put-call ratios are widening. Heavy bets to the downside can often times be followed with bear-market squeezes to the upside... but like I just said, we are in a bear market until further notice so continue to expect volatility on BOTH the upside and on the way down. As one of my favorite quotes go... "markets go up and markets go down, but not straight up nor straight down" -Swaggy

One (of the many) factors attributing to market's poor performance is the rise in bond yields. Peep the 10-year which has nearly doubled since the start of the year and becoming attractive to more and more buyers. Money is generally a zero-sum vessel and will flow between assets classes and categories. What do I mean by this? As one asset class receives inflows there is generally somewhat relative outflows from elsewhere. 

Parlay the rise in bond yields with increasingly sticky inflation (which came in hot last week), less disposable income, increased energy prices, more expensive debt, and you have yourself a bear-market cocktail... but the reality is that this bear market has been fairly mild so far (max drawdown has been roughly -23%).

Sure, some companies have started lay-offs while others do hiring freezes, but in comparison to 2008 and 2000 this 20% shed from the highs is very tolerable. Looks kinda sus if you ask me.

All eyes are going to be on the Fed meeting next week where they'll announce the interest rate decision on Sept 21 (75 bps expected).

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Trending Cryptos

The Ethereum (ETH) merge has finally completed, which led to a huge increase in chatter for the crypto coin. This is one of the few times that retail mentions for ETH has surpassed BTC (Bitcoin) by such a large margin.

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I have a love hate relationship with crypto.   

I love it when it goes up, and hate it when it goes down.   

This year has been rough for crypto, but one brightspot has been this new crypto newsletter I’m reading (The Milk Road)  

I heard about it 3-4 times from people I respect on Twitter, before I finally subscribed…and I have to say… it’s awesome.   

If you like Swaggy's Top Stonks, you’ll like The Milk Road.   

It’s got that great mix of smart stuff & jokes. And crypto is changing so fast, it’s great to just read a super quick & simple summary of the big news each day.   

It’s started by @shaanvp (famous twitter guy) so it got pretty popular quickly (100k+ subscribers this year)   

If you wanna keep up with crypto —> highly recommend checking it out. 

Top Meme Stocks

After Bed, Bath, & Beyond's (BBBY) recent rise and fall it seems meme stocks have cooled off to continue the trend they've seen YTD. Last week's chatter revolved around a handful of topics.

Tesla (TSLA): Elon and Tesla always make the top headline. After a volatile few trading days TSLA managed to end the week nearly completely flat.

CPI: The topic of CPI was taking over most of the chatter last week based on a number that came in higher than expected. Hot inflation is the scapegoat and is currently being blamed for this market downturn. It's more about what high inflation does to compress company margins as well as diminish a consumer's discretionary income that the market doesn't like about it.

Apple Inc (AAPL): AAPL has become the market's most shorted stock, but if that's any indicator to what we've seen with short-squeezes in the market then retail traders tend to take that as more of a bullish sign than bearish.

Fedex (FDX): FDX dropped 22% on earnings last week and took the rest of the market down with it. Management warned of a potential global recession, which spooked investors (not me tho).

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