For Our Clients

Educational Resources

By Bill Hornbarger, Chief Investment Officer

 

Three Things to Watch

  • Consumer prices (CPI) will be released on Thursday and will be the primary focus. Both the overall and core readings are expected up 0.4% for the month May, and 4.7% and 3.4% year-over-year respectively. That comes after a very strong gain in April. The Fed maintains its stance that inflation is “transitory,” but market participants are concerned about longer term implications and what these numbers might mean for Fed policy.
  • The so-called meme stocks will again be the focus of attention. Last week saw AMC go on a wild ride and there are concerns that this activity is a sign of excess in the market.
  • A widely followed cryptocurrency index is down 40% since its peak in early May and many crypto traders are dealing with their first major correction in the asset class. Market participants will keep a close eye on this market on concerns it might spill over into equities and particularly tech stocks.

Three Things to Know

  • AMC’s stock price was up 2,850% YTD through June 2 giving the company a $36.7 billion enterprise value (EV) and leaving it trading at 66.8x EV to 2022 EBITDA (earnings before interest, taxes, depreciation, and amortization). In 2019 the company traded at 7x EV to EBITDA and as a basis of comparison, Disney trades at 22x and peer Cinemark at 8.8x. AMC’s box office receipts for 2021 are projected at $5 billion vs. $11 billion pre-pandemic. (Source: Bloomberg)
  • The trailing five-year standard deviation (a measure of volatility/risk) for Bitcoin has been 93.6% vs. 16.3% and 13.1% for gold and the S&P 500, respectively. (Source: Y-Charts)
  • The fighting on D-Day (June 6, 1944) was so fierce that as much as 4% of the sand on Normandy beaches is magnetic shrapnel that has been broken down over the decades into sand-sized chunks. (Source: Businessinsider.com)

 

The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.