Inside Arbitrage Friday Wrap – Commodities Pull Back and Stocks Rally

  • June 24, 2022


Our list of curated tweets for the current week

Commodities like oil and copper pulled back this week, accelerating a decline that saw crude oil drop more than 7% since the start of the month and copper give back more than 12% to drop below the $4 per ounce level. Growing concerns about a recession are weighing on investor minds and beyond lower commodity pricing, we are also seeing an increase in layoffs and hiring freezes at companies large and small. The stock market saw a big relief rally this week with the S&P 500 up 4.7% for the week and the Nasdaq doing even better with a 5.8% gain.

Whether this is a bear market rally or whether this action represents the beginning of a new bull market will only become clear in hindsight. I am treating this as a bear market rally and expect commodities to rebound in the coming weeks. While I am in no hurry to start buying stocks aggressively, I did use the drop in the last few days to write naked put options on a couple of technology stocks that appeared to be oversold. The premium some of these options are providing are enticing, especially if you really like the underlying stocks and don’t mind intermediate-term volatility if you get assigned.


Warren Buffett is buying oil stocks

$BRK last Friday and today bought ~8M more shares of $OXY

Excellent thread that puts the recent commodities drop in context.

I watch market breadth most New High vs New Lows and the % of stocks above their 200d ma.

Market now undervalued on a forward p/e basis.

S&P Margins

Housing Inventory

Housing Completions will Increase Sharply in 2022

Not a good 2Q for Wall Street banks.

Zendesk is close to striking buyout deal with a group including Hellman & Friedman and Permira

$GROV / $VGII had 39.7 million shares redeemed

Netflix is having a strange 2022

$ZS Why I like Zscaler!

interviews with some of the best emerging managers today

Global Events

Chinese miners and South Asian ecafes now dismantling their mining rigs and putting cards up for auction on livestreams.

5.9-magnitude earthquake struck southeastern Afghanistan

Germany raises level of alarm over Russia gas disruption

Life & Health

Writing it helped me deal with some things, and it ended up providing hope for more people than I ever could have imagined.

Americans could wait longer to start emptying retirement accounts

Drought reaches top WHO health emergency status for the first time

Voluntary Disclosure: I hold long positions in Berkshire Hathaway (BRK.B) and Netflix (NFLX).