Bloomberg Television brings you the latest news and analysis leading up to the final minutes and seconds before and after the closing bell on Wall Street. Today's guests are Federated Hermes’ RJ Gallo, Barclays’ Jon Hill, Goldman Sachs’ Alex Blostein, Fmr. Nato Supreme Allied Commander Gen. Wesley Clark (Ret.), Gabelli Funds’ Macrae Sykes, Envestnet’s Dana D’Auria, 22V Research’s Kim Wallace, Carb...
Bloomberg Television brings you the latest news and analysis leading up to the final minutes and seconds before and after the closing bell on Wall Street. Today's guests are Federated Hermes’ RJ Gallo, Barclays’ Jon Hill, Goldman Sachs’ Alex Blostein, Fmr. Nato Supreme Allied Commander Gen. Wesley Clark (Ret.), Gabelli Funds’ Macrae Sykes, Envestnet’s Dana D’Auria, 22V Research’s Kim Wallace, Carbone Fine Food Co-Founder Mario Carbone, Magnolia Bakery CEO Nathan Louer, & Former Super Bowl Champion Reggie Bush & United Athletes Tour CEO Len Brown. (Source: Bloomberg)
takasuu/iStock via Getty Images In December last year, I had recommended a pair trade, going long IonQ ( IONQ ) and short Rigetti Computing ( RGTI ). Looking back, I am more happy with the call than not because the core principle of the pair trade has worked out exactly for reasons why a pair was advised - both have collapsed by ~42%. What has not yet worked out is the alpha expected from IonQ. My...
takasuu/iStock via Getty Images In December last year, I had recommended a pair trade, going long IonQ ( IONQ ) and short Rigetti Computing ( RGTI ). Looking back, I am more happy with the call than not because the core principle of the pair trade has worked out exactly for reasons why a pair was advised - both have collapsed by ~42%. What has not yet worked out is the alpha expected from IonQ. My December thesis, of course, recognized difficulties in practically implementing a pair trade in two stocks that have historically been volatile, especially true for the short leg. I had hinted at several mechanisms ranging from different position sizing for the two legs and options hedges too. Depending on how positions were set up in December, the pair trade could be in significant losses too. But the core idea of not going naked long in the quantum space seems to be still directionally correct. This thesis reviews whether the relative Buy call on IonQ still holds after Q4 earnings updates and how narratives have evolved for both the players. From that perspective, IonQ seems to be even more exposed to narratives and also moved up further in the quantum positioning stack. So, the relative call favoring IonQ has been strengthened even further in my view. I recommend no changes to positions set up in December. The relative alpha in IonQ should show up when the market conditions align and long duration growth is back in fashion. Thematic Beta Dominant Over the past 4 months since my thesis, the quantum computing thematic beta has been stronger. IonQ and Rigetti have almost moved in sync on the way down. A look at the historical prices and the ratio shows that this has not been the case throughout history. There has been a heavy correlation between the two throughout, but there were periods of dispersion, material enough to make individual fundamentals matter more than segment-level dynamics (like we are seeing now). Data by YCharts Data by YCharts Data by YCharts The ratio c...
Sundry Photography/iStock Editorial via Getty Images Valero Energy ( VLO ), the largest buyer of Mexican crude, has cut purchases from the country to just a single cargo this month, as it struggles to restart its Port Arthur, Texas, refinery following an emergency total shutdown, Bloomberg reported Friday. The purchase of one cargo of less than 200K barrels compares with an average of 4M barrels a...
Sundry Photography/iStock Editorial via Getty Images Valero Energy ( VLO ), the largest buyer of Mexican crude, has cut purchases from the country to just a single cargo this month, as it struggles to restart its Port Arthur, Texas, refinery following an emergency total shutdown, Bloomberg reported Friday. The purchase of one cargo of less than 200K barrels compares with an average of 4M barrels a month last year. Most of Valero's imports go to the 435K bbl/day Port Arthur refinery—one of the largest on the U.S. Gulf Coast—which suffered extensive damage from a diesel hydrotreater fire last month; reports said the explosion and fire were so severe that the unit's blast-resistant control room was destroyed . The loss of business from Valero ( VLO ) is a major blow to Mexico's Pemex, accounting for ~20% of Mexican oil sales. It is not known when the refinery will be able to fully restart; since last month's incident, the facility has ramped up activity at some of its units, but key areas including its largest crude unit reportedly remain offline. More on Valero Energy Valero Energy Shares Follow Crack Spreads Higher (Rating Upgrade) Valero Is Much More Than Fossil-Based Crack Spreads Valero Energy: Still Pumping Cash, But The Valuation Looks Bloated