July 25th, 2021
North American stock markets and European bourses ended the week higher, rebounding from a sell-off on Monday, while Asia Pacific equity markets struggled; the DJIA advanced 1.1%, the S&P rose 2%, the 50/50 Nasdaq/Russell benchmark surged 2.5%, European bourses contributed 1% to 1.5%, but the Asia Pacific stock market’s losses ranged from .3% in India to 2.6% for the Hong Kong Hang Seng. Our BSD Global Tech Hedge Fund gained 1.2% last week. The advance in North America and Europe was somewhat narrow, with much of the gains concentrated in large cap technology and internet-related enterprises. Uncertainties regarding China’s regulatory changes and the impact on the Chinese technology arena, weighed on the Asia Pacific region. The steep declines at the start of the week was attributed to growing fears about the spread of the delta variant of the coronavirus. The major benchmarks recouped almost all their losses on Tuesday, and continued to melt up in the second half of the week. Positive news on the U.S. housing sector, and encouraging second-quarter corporate earnings reports appeared to play a role in the rebound. Strong earnings in the social media space, as well as earnings from American Express, pushed stock markets higher while disappointing results from Intel and Boston Beer were set aside. As far as the social media sector is concerned, the solid results from Snap and Twitter pushed the market cap of Snap up above $100 billion while Facebook now finds itself in the trillion-dollar club.
Tech heavyweights will be in the spotlight this coming week with Apple, Microsoft, Alphabet and Facebook all stepping into the earnings confessional. Economic reports due out include updates on new home sales, pending home sales, durable goods orders and Q2 GDP. The Federal Reserve two-day meeting of its policy-making committee wraps up on July 28. Chairman Powell is expected to discuss the pace of central bank tapering and inflation expectations during the presser. Robinhood Markets makes its public debut event, along with a large number of companies with IPOs and SPAC closings. Also keep an eye out for Intel, with the company hoping to turn heads with a product event. With more market volatility expected, your BSD Global Tech Hedge Fund is 85% invested across a couple dozen tech vendors and tech end-users, thereby allowing the Fund to participate if this stock market continues to melt up, but We also have a 62% short equity indice hedge on the notional value of the invested stock portfolio that will incrementally grow (from the laddered Nasdaq put options strategy) if the market deteriorates.