THREAD: Since the March lows, we've seen interesting divergence in exchange stock performance that I want to flesh out in more detail below:
$NDAQ $ICE $CME $CBOEpic.twitter.com/xY030l7sH0
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$NDAQ rebounding the most since the lows makes sense - high exposure to recurring market data & listing revenues (~64%) means COVID didnt cut the short-term outlook. 2021 expectations haven't moved that much either:pic.twitter.com/F1FvCdY3vN
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Same with $ICE - high exposure to recurring market data revenue helps shelter the stock from near term shocks. There's also been optimism that negative WTI prices help push market share to Brent:https://twitter.com/aosipovich/status/1252932231351480321?s=20 …
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$CBOE has underperformed the S&P since the bottom because the VIX has stayed elevated - traders haven't put on new hedges and we've seen VIX & SPX options volumes languish. Their trading floor closure also hurt activity. 2021 estimates are down on lower forecasted VIX OI imopic.twitter.com/AJ37N492xI
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Similar story with
$CME - extreme energy volatility hurting some traders + low interest rates keeping hedging/speculative activity low = lower expected volumes & open interest, despite a huge Q1 2020:pic.twitter.com/EgqXcFBAFE
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In terms of forward multiples, the COVID crisis has led investors to place more of a premium on stable income streams - a la
$NDAQ and$ICE.$CBOE &$CME multiples have contracted on the gloomier outlook since the start of 2020:pic.twitter.com/nYQvQIYYvU
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