top of page
Daily Analysis 1 June 2022 (10-Minute Read)

Hello there,

A terrific Tuesday to you as stocks struggle over inflation concerns and with bond yields going higher over U.S. Federal Reserve rate-hike wagers.

In brief (TL:DR)

  • U.S. stocks pared last week's gains as inflation concerns clouded last week's rebound with the Dow Jones Industrial Average (-0.67%), S&P 500 (-0.63%) and the Nasdaq Composite (-0.41%) all lower.

  • Asian stocks were mostly higher as Beijing rolls out more measures to support its moribund economy.

  • Benchmark U.S. 10-year Treasury yields rose to 2.869% (yields rise when bond prices fall) as traders factored in the effect of Fed balance sheet runoff with inflation data.

  • The dollar rose in Asian trading.

  • Oil gained with July 2022 contracts for WTI Crude Oil (Nymex) (+1.55%) at US$116.45 on supply side concerns.

  • Gold fell with August 2022 contracts for Gold (Comex) (-0.87%) at US$1,832.30 against a strengthening dollar.

  • Bitcoin (-0.13%) was flat at US$31,589, but remains over key technical levels of support, at US$31,500 and could trade lower if it fails to maintain above US$29,000 or edge higher rangebound if it can sustain the rally over US$30,000.

In today's issue...

  1. Insiders are Buying the Dip

  2. Eurozone Inflation Catches Up with U.S.

  3. Bitcoin Stays Above US$30,000

Market Overview

U.S. and European stocks wavered as investors duked it out over the scale of central bank policy tightening that would be required to fight inflation.

Signs that the European Central Bank may tighten monetary conditions more aggressively rippled through European stock markets and sent bond yields soaring.

Exacerbating matters, OPEC+ is meeting tomorrow to discuss supply policy for July and there are fears that producers will use this opportunity to recharge depleted coffers from previous years where the price of oil was strongly depressed, but national spending grew or remained constant.

Asian markets were mixed with Tokyo's Nikkei 225 (+0.65%), Seoul's Kospi Index (+0.61%) and Sydney’s ASX 200 (+0.32%) higher, while Hong Kong's Hang Seng Index (-0.56%) was lower.

1. Insiders are Buying the Dip

  • Top executives are buying the dip on their own stocks, a potential sign that a bottom may have been reached.

  • Pace of insider buying comparable with 2018 and portends well for investors looking for some respite in the volatile markets.

“Be greedy when others are fearful.”

– Warren Buffett

It’s easier said than done, to be “greedy when others are fearful,” especially when it comes to investing, because of information asymmetry.

Without visibility into the prospects of a company, the macroeconomic conditions and the long-term trend of things like interest rates and inflation, investors, particularly retail, are understandably taken at a disadvantage when making short-term portfolio decisions.

Which is why few retail investors are advised to become traders, most are better off becoming long-term investors who hold their portfolios for years.

But some investors do have greater insight into prospects, and perhaps more so than others – the corporate executives who work for the very companies whose shares have been hammered by market conditions.

And over the past month, the “sell in May and go away” adage apparently fell on deaf ears when it came to executives as some of America’s largest listed companies.

According to data from VerityData, insider buying at S&P 500 companies has been the strongest since March 2020, when the pandemic first caused market panic.

Retail investors, once again, have been pulling out of the stock market amidst the looming threat of a slowdown or recession.

Some analysts suggest that insider buying has historically been a good sign of market bottoms and this makes sense.

As insiders are privy to prospects and products, costs and challenges, outlook and overruns, they are best-placed to know the value of the stocks of their companies relative to what the market thinks.

Take Starbucks (+2.33%) for instance, whose shares are down about 35% since the start of this year – interim CEO Howard Schultz, the founder of the company who has returned, bought shares for the first time since 2018.

RingCentral (-4.10%), a web-based app company that replaces landline phones saw its co-founder and CEO snap up US$1.2 million on his first stock purchase since the company went public in 2013 – shares in RingCentral are down by more than 60% this year alone.

Starbucks and RingCentral are hardly the only companies whose top executives have been snapping up shares on the dip, Intel (-0.29%), Asana (-4.69%), Ford (+0.48%), GameStop (-9.02%), Eastman Kodak (+0.43%), the list is long of companies whose insiders feel that prices have come down enough to jump back in.

2. Eurozone Inflation Catches Up with U.S.

  • Eurozone inflation hits a high of 8.1%, almost as high as the U.S. but with the European Central Bank likely behind the curve when it comes to tightening.

  • European stock investors may take some comfort that the ECB is unlikely to have the same level of resolve and coherence when it comes to policy as the U.S. Federal Reserve, meaning that any move towards tightening is likely to be half-hearted despite soaring inflation.

In terms of monetary policy, the European Central Bank (ECB) has adopted a far more dovish stance than its counterpart, the U.S. Federal Reserve, especially after pandemic pressures started to ease on keeping the liquidity taps open.

But the unprovoked Russian invasion of Ukraine is changing the situation rapidly, from the soaring cost of energy, in particular natural gas, to the rising prices in essential food items such as wheat and chickens.

And yesterday, the ECB reported inflation of 8.1% across the Eurozone, well beyond economist estimates and heaping pressure on the central bank to do more to rein in price pressures.

Significantly, the core inflation number, which strips out volatile energy and food prices and is a key indicator for ECB policymakers, rose from 3.5% to 3.8% and could force the central bank to get more aggressive on rate hikes.

ECB Chief Economist Philip Lane signaled earlier this week that the centra bank would raise rates by 0.25% in July, with another similar hike in September, almost mirroring the U.S. Federal Reserve’s response to rising prices.

But now that inflation has come onto the doorsteps of Europe, policymakers are having to contend with steeper hikes, especially at next week’s meeting, and a move that could provide an unwelcome surprise for European stocks that saw a rebound last week.

The ECB may already be behind the curve, as the Bank of England and the U.S. Federal Reserve already started tightening, which appears to be having the intended effect – there are signs that the pace of price growth is slowing in the U.S.

If so, the ECB may be under pressure to take far more aggressive action, but this is unlikely.

Unlike the Bank of England and the Fed, the ECB answers to the European Parliament, with its diverse national interests and plethora of sovereign bonds where the spread between yields is starting to widen.

If nothing else, more ECB members are worried about tipping the Eurozone into recession, just as the economic bloc is coming out of years of slowing growth.

Inflation is also not uniform across the Eurozone – if affects poorer members disproportionately harder than the richer ones.

The fastest rate of inflation in the 19-member Eurozone was 20.1% in Estonia, whereas Malta only saw a 5.6% increase in prices.

That disparity and the bureaucracy that stymies decisive action at the ECB should provide some comfort for investors.

3. Bitcoin Stays Above US$30,000

  • Bitcoin maintains well above US$30,000 but the resilience of the rebound is uncertain.

  • Signs of institutional investors buying the dip have helped to maintain price, but further rallies are not a given until the latter half of the year when the block reward for mining Bitcoin is halved.

The decoupling that so many cryptocurrency investors had hoped for worked out, but not exactly as planned.

For weeks, investors bemoaned the strong correlation of Bitcoin and other cryptocurrencies with stocks, in particular the tech-heavy Nasdaq 100.

But those correlations broke down last week as equities rose on the back of heightened expectations the U.S. Federal Reserve won’t be as trigger happy when it comes to tightening, over recession and unemployment concerns.

Even as the riskiest stocks rebounded last week, cryptocurrencies remained in the doldrums, with Bitcoin pushing US$28,000.

But what a difference a week makes.

Investors took the opportunity to buy the dip on Bitcoin, and it is now well over the psychologically significant US$30,000 level of support.

Ether, the world’s second largest cryptocurrency still hovers just below the US$2,000 level and suggests that the durability of this recent rebound is questionable.

Some closely-watched technical measures suggest that cryptocurrency prices could still drop to their lowest since December 2020, especially if Bitcoin fails to maintain its support over US$29,000.

If Bitcoin manages to maintain well over US$30,000, there is the outside chance that it could range-trade to resistance at US$40,000 but a break down below US$29,000 would confirm the ominous double-top pattern, that risks seeing Bitcoin capitulate to US$25,400 and then the 200-day moving average at US$22,100.

Nevertheless, there are green shoots of recovery for the world’s largest cryptocurrency – increased institutional flows.

Over the past week, there have been signs that more institutional investors, including family offices, have been snapping up Bitcoin on the cheap, as a much more price-friendly entry point compared to the all-time-high of last year.

Whereas in 2021, there were many institutional investors sitting on the fence when it came to Bitcoin, prices appear low enough to at least tempt some back in.

Those flows have also been reflected in retail investors and a total of US$255 million flowed into Bitcoin-based products in May alone.

The second half of the year will also provide some bullish resolve for Bitcoin, with its expected halving that will reduce the mining reward and reduce some of the sell-side pressure that is exerted by miners.



过去的表现并不具有指示性,也不保证未来的表现。我们不向我们的客户提供任何投资、税务、会计或法律建议,建议您就数字资产的任何潜在分配咨询您的税务、会计或法律顾问。本电子邮件通讯中包含的信息和任何意见均来自我们认为可靠的来源,但我们不代表此类信息和意见准确或完整,因此不应依赖此类信息。_cc781905-5cde- 3194-bb3b-136bad5cf58d_


没有向美国证券交易委员会、任何美国国家证券管理局或新加坡金融管理局提交注册声明。本电子邮件和/或其附件可能包含某些“前瞻性陈述”,这些陈述反映了当前对未来事件和 Novum Alpha Pte 的数字资产配置表现的看法。有限公司(“本公司”)。读者可以通过使用“展望”、“相信”、“预期”、“潜在”、“目标”、“继续”、“可能”、“将”等前瞻性词语来识别这些前瞻性陈述, “正在成为”、“应该”、“可能”、“寻求”、“大约”、“预测”、“打算”、“计划”、“估计”、“假设”、“预期”、“定位”、“目标”或这些词或其他类似词的否定版本。 


特别是,这包括关于区块链行业、数字资产和公司、风险投资和众筹市场的增长以及与公司进行任何数字资产配置的潜在回报的前瞻性陈述。本电子邮件和/或其附件中包含的任何前瞻性陈述部分基于历史业绩和当前计划、估计和预期。包含前瞻性信息不应被视为公司或任何其他人对未来计划、估计或预期将实现的陈述。此类前瞻性陈述受到与公司的运营、结果、状况、业务前景、增长战略和流动性有关的各种风险、不确定性和假设的影响,包括在单独的一组文件中描述的风险。如果这些或其他风险或不确定性中的一项或多项成为现实,或者如果公司的基本假设被证明不正确,则实际结果可能与本电子邮件和/或其附件中所示的结果大不相同。_cc781905-5cde-3194-bb3b -136bad5cf58d_


因此,您不应过分依赖任何前瞻性陈述。此处包含的所有绩效和风险目标如有更改,恕不另行通知。  无法保证公司将实现任何目标或与公司进行数字资产配置会有任何回报.  历史回报不能预测未来结果。该公司旨在成为早期技术领域和数字资产的专业数字资产配置和交易工具。早期技术中的数字资产分配具有更大的风险,可能被认为是高风险和波动性的。存在与公司分配的所有数字资产全部损失的风险-有关风险的详细信息,请参阅单独的一组文件。 


接受本通讯即表示您声明、保证并承诺:(i) 您已阅读并同意遵守本通知的内容,并且 (ii) 您将严格保密并保护本通讯,并同意不复制、直接或间接地重新分发或传递此通讯给任何其他人,或出于任何目的全部或部分发布此通讯。

bottom of page