Two out of three ain’t bad
January 21, 2022
–NFLX fell 1.5% to a new low yesterday on weaker than expected subscriber growth. PTON continued its plunge, falling 24% to a new low, a complete roundtrip from the onset of Covid in March 2020. It started around 20, exceeded 160 at the end of 2020, and is now back at 24. Now for the bad news, Meat Loaf died, the artist who gave us “two out of three ain’t bad”. So NFLX and PTON are good news? Yes, because they were the Covid darlings, and if they have rolled over, so has covid. Another aspect is that much of the business world has moved to a subscription model; no one actually owns anything anymore. Perhaps we’re seeing the initial warning stages which questions the validity of that particular model.
–ESH had an astonishing range yesterday going into today’s option expiration. An early gain of 70 points from Wednesday’s settlement vanished; at the low ESH was down 87. Feb options on treasury futures also expire today, with TYH appearing to peg the 128 strike, but it could be a wild day today. Predictions of a 50 bp hike for the Fed’s first move appear a bit outlandish after yesterday’s price action. At the futures settlement the dollar curve was flatter, with red eurodollars (2nd year) down 2.75 on the day and further out contracts ranging from -1.5 to +1.5. 5/30 treasury spread edged to a new low just above 52. Red and green eurodollars are currently +4 to +4.5.
