Episodios
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Can we get this election over with already?
Markets pricing in a perfect gridlock scenario.
Earnings season rolling along - good and bad news for stocks.
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Warm-Up
- Yields - Highest in months - ahead of Fed decision (tomorrow)
- Drones - will they deliver?
- October ends on a down note
Markets
- Optimism (Hysteria) ahead of (final) Election results
- Oil on the move again - Middle East tensions
- Mixed results from earnings - but still a generally good look for the main players
- What does Berkshire know?
- Big DJIA Announcement
AH - Chili Competition this weekend - reining champion - have to defend the title...
Employment Situation
- ADP said private companies hired 233,000 new workers in the month, better than the upwardly revised 159,000 in September and far ahead of the Dow Jones estimate for 113,000.
- Nonfarm payrolls were up just 12,000 in October (Briefing.com consensus 120,000)
- Nonfarm private payrolls decreased by 28,000 (Briefing.com consensus 105,000)
-- These numbers were depressed by the Boeing strike and likely by the effects of Hurricanes Helene and Milton, yet with forecasts suggesting those influences could lop off something on the order of 100,000 positions, the view to October, coupled with sizable downward revisions to the August and September payroll figures, connotes softness in hiring activity.
- Unemployment rate stood at 4.1% - no change
US GDP
- Gross domestic product increased at a 2.8% annualized rate in the third quarter, below the 3.1% estimate and the 3.0% reading Q2.
- Consumer spending and federal government outlays were two of the biggest contributors to GDP growth.
- The release comes with the Federal Reserve poised to lower interest rates further despite the seemingly strong economy and inflation that remains above target.
Palantir Earnings
-Back-to-back quarters delivered beats on its top and bottom lines in Q3 and forecasted upbeat Q4 revenue figures.
- PLTR's top line continued to accelerate, advancing by 30% yr/yr to $725.52 mln, supporting its improving profitability, with non-GAAP EPS expanding by 43% yr/yr to $0.10. Total customer count continued to grow nicely, up 39% yr/yr and 6% sequentially to 629.
- U.S. government revenue has been ramping up in recent quarters. However, in Q3, the segment took a giant step forward, growing revs by 40% yr/yr and 15% sequentially to $320 mln, a seven-fold increase compared to the prior year and the best growth rate over the past 15 quarters.
- The commercial side was the showcase in Q3. Like U.S. government, U.S. commercial revs shifted into a higher gear, registering 54% growth yr/yr, up from the +33% delivered last quarter, to $179 mln
AMD Earnings
- Just not good enough
- AMD reported third-quarter results on Tuesday, with earnings in line with forecasts and revenue that slightly beat expectations.
- Here's how the company did, compared to LSEG estimates for the quarter ending Sept. 28:
- Earnings per share: 92 cents adjusted vs. 92 cents expected
- Revenue: $6.82 billion vs. $6.71 billion expected
- AMD said its important data center business doubled in sales for the second quarter in a row, but overall revenue guidance for the fourth quarter was in line with consensus expectations.
- Stock down
Microsoft Earnings
- Microsoft’s revenue grew 16% in its fiscal first quarter, faster than analysts had anticipated.
- Revenue from Azure and other cloud services was up 33%, surpassing estimates.
- Guidance for revenue growth fell short of expectations.
Amazon Earnings -
Yields important again - rising and worrisome.
Hedge Fund titans getting nervous - talking bout a Minsky Moment.
End of month - October is about to be in the books.
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SHHHHH- Leaking some of my own news... eNVESTOLOGY moving to $25,000 minimum in 2025. Currently at $10,000 so if you want to get in to that investment management program with us for the current minimum - now is the time.
Warm-Up
- Yields important again - all of a sudden
- Hedge Fund titans getting nervous - talking bout a Minsky Moment
- End of month - October is about to be in the books
Markets
- Earnings season - Tech is about to bombard us
- Gold near highs as China and India buying
- Election Direction - putting money where mouth is...
- Consumers are happier - UMICH
- NAZ 100 - ATH?
Yields - On the Move
Yields On The Move
Auto Divergence
- GM puts out some good numbers for recent quarter.
-- GM now expects full-year adjusted EBIT of between $14 billion and $15 billion, or $10 and $10.50 a share, up from between $13 billion and $15 billion, or $9.50 and $10.50.
- This marks the third time this year that GM has updated its guidance after beating Wall Street’s top- and bottom-line expectations, led by the automaker’s North American operations.
- Ford put out okay numbers, nothing exciting at this point - stock stuck in sideways action
- Big differential with stock performance over past year
GM/FORD YTD
GM/Ford Longer
New Threshold for Capital Gains
- Starting in 2025, single filers will qualify for the 0% long-term capital gains rate with taxable income of $48,350 or less and married couples filing jointly are eligible with $96,700 or less.
- Here is an idea - for low basis stock - possibly gift to non-dependents that have low income and they can sell at lower capital gains rate
--- Cannot do for dependents as their unearned income above $1,300 is the threshold.
Consumer Sentiment
- October Univ. of Michigan Consumer Sentiment - Final 70.5 vs. 68.9 Briefing.com consensus; October prelim was 68.9
- Markets reacted positively last Friday on this news.
--- Trivia: The University of Michigan (UMich) stopped releasing early versions of its Consumer Sentiment Index (MCSI) in 2013 as part of an agreement with the New York Attorney General's office. The university had previously received around $1 million a year from Thomson Reuters for this information.
Hedge fund big boys
- Getting nervous - Paul Tudor Jones
- The founder and chief investment officer of Tudor Investment said he was worried that government spending could cause a big sell-off in the bond market, spiking interest rates higher.
- Debt unsustainable and people just overlooking it
- "Will we have a Minsky moment where all of a sudden there’s a point of recognition that what they’re talking about is fiscally impossible, financially impossible?” Jones said."
- Commented how both candidates are spenders so that is not good - however, hard pressed to think that many of their spending promises will actually go through.
Minsky Moment Defined
- A Minsky moment is a sudden, catastrophic collapse of asset prices after a period of growth and stability. It's named after American economist Hyman Minsky (1911 to 1996), who believed that markets are inherently unstable and long periods of good markets eventually end in larger crises.
- A Minsky moment occurs when excessive debt accumulation becomes unsustainable. Borrowers can no longer meet their debt obligations using their income, leading to a sudden decline in asset prices and a financial crisis.
Housing Market -
¿Faltan episodios?
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There are some things we need to know about who is actually buying stocks.
Yields on the rise - estimate that they could be moving up to what level?
Big tech earnings on tap - how will markets react?
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Warm-Up
- Gold on a tear - not just gen pop buying
- Elephants buying up stocks - The BIG reveal
- Musk giving away $
- E-Coli Alert
Markets
- Yields cranking higher - steepening means....
- A bit of profit taking ahead of tech earnings (next week)
- More Tax abatements
- Markets look a little tired....
Treasury Rates
- The U.S. 10-year Treasury yield rose above 4.11% on Monday as investors awaited a flurry of speeches from Federal Reserve policymakers.
- This is a far cry from the lows before the latest rate cut about a month ago.
- Elections and debt loads are weighing as are the latest strong economic numbers
Yield Curve
This too...
- The Biden administration rang up a budget deficit topping $1.8 trillion in fiscal 2024, up more than 8% from the previous year and the third highest on record, the Treasury Department said Friday.
- The deficit came despite record receipts of $4.9 trillion, which fell well short of outlays of $6.75 trillion.
- Government debt has swelled to $35.7 trillion, an increase of $2.3 trillion from the end of fiscal 2023.
- Interest expense for the year totaled $1.16 trillion, the first time that figure has topped the trillion-dollar level. (23% of receipts are used for debt service)
- The CBO expects deficits to continue to rise, hitting $2.8 trillion by 2034. On the debt side, the office expects it to rise from the current level near 100% of GDP to 122% in 2034.
The Big Reveal
- The central bank of the Czech Republic added to positions in some of the biggest tech names among U.S.-traded stocks, as well as increasing a bet on Warren Buffett.
- Czech National Bank Bought Up Palantir, Nvidia, Apple, and Berkshire Stock
- Here is my take.... (Central Banks reporting to other options as they are strapped and backs against the wall. They know they have enough firepower to pump stocks to try to dig themselves out of a death spiral of debt)
- Is it legal - yes. Is it good for markets, yes. Is it dangerous? Yes and no - if you can print money - who cares?
More...
Let's not forget about China rolling out $112 Billion scheme to bolster stocks
- China's central bank kicked off two funding schemes on Friday that will initially pump as much as 800 billion yuan ($112.38 billion) into the stock market through newly-created monetary policy tools.
- The central bank also launched a relending program, initially worth 300 billion yuan, that would allow financial institutions to borrow from the PBOC to fund share purchases by listed companies or their major shareholders.
- 1.75% is the rate to borrow and buy stocks
Revealed - Just a quick look....
- The Swiss National Bank has 20% of its assets in equities.
- The Bank of Japan buys Japanese ETFs as part of its domestic money market operations, but it doesn’t buy foreign stocks.
- The Bank of Finland does invest in equities
- Norges Bank, the central bank of Norway, buys stocks.
- Bank of Finland buys stocks
- Last quarter - Norway's gigantic sovereign wealth fund on Tuesday reported third-quarter profit of 835 billion Norwegian kroner ($76.3 billion)
- - - To date, the fund has put money in more than 8,760 companies in 71 countries around the world.
NO TAXES!
- Donald Trump said he’d consider exempting police officers, firefighters, active duty military and veterans from paying taxes
- Why not just have no taxes for everyone?
--- UPDATE: Former President Donald Trump's tax r... -
Bulls remain in chargeData not important - down the road all will be fineSeasonality - Race to the EndCPI and PPI - conflictingPLUS we are now on Spotify and Amazon Music/Podcasts!Click HERE for Show Notes and LinksDHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.Love the Show? Then how about a Donation?Follow John C. Dvorak on TwitterFollow Andrew Horowitz on TwitterDONATIONS ?This week on TDI Podcast - Patrick O'Hare from Briefing.comWarm-Up- Bulls remain in charge- Data not important - down the road all will be fine- Seasonality - Race to the End- Check the Podcast Cover Design - trying to do all from AI generation through end of year.- Musk pulls a fast oneMarkets- CPI and PPI - conflicting- Bank earnings - so far so good- Fed allowing people to look past negatives - rather to opportunities ahead- US Chips and Exports - roughed up marketEconomics This Week- Import and Export Prices- Retail Sales- Philly Fed- Industrial Production- Housing Starts- Building PermitsOf Interest:NY Fed says median inflation expectations remained unchanged at 3.0% at the one-year horizon, increased to 2.7% from 2.5% at the three-year horizon, and increased to 2.9% from 2.8% at the five-year horizon.- So inflation is a bit more sticky thanRecession - No Says Goldman- Goldman lowers recession odds to just 15%Seasonality - The Race until the end- Sell Rosh Hashana and Buy Yom Kippur - so far so good - working just as planned. Almost...- End of year from here favors the bulls- Could have a few complications with the election right in between but electoral promises will be helpful for marketsMarkets Worried?- Biden administration officials have discussed capping sales of advanced AI chips from Nvidia Corp. and other American companies on a country-specific basis- NVDA, INTC, AMD in the crosshairs for Middle East- Officials are focused on Persian Gulf countries that have a growing appetite for AI data centers and the deep pockets to fund them- The new approach would set a ceiling on export licenses for certain countries in the interest of national security- ASML earnings miss (Stock dropped 16%) is a drag on chip/semiconductor sectorFed Powers- Former President Trump on Bloomberg interview says Fed Chair Jerome Powell dropped rates too much in 2020; says a president should be able to give his or her opinion to Fed on interest rates, but he or she shouldn't be allowed to order itELON - Pulling a fast one- Tesla had its Optimus robots controlled by remote at CyberCab event, according to Bloomberg- Also, reports that driver-less cars controlled by remote drivers in India (or somewhere)- Isn't that fraud?Example of promises hitting the wires- Former President Trump will propose today making all interest on car loans fully tax deductible, according to Reuters- Former President Trump will also propose a 15% corporate tax rate only for companies that produce products in America- Former President Trump will also propose banning all Chinese autonomous vehicles from traveling on US roads (Special gift for Elon)Consumer Confidence- Last Friday - confidence showed people less confident- Inflation expectations lower, but dropped 2 points from last monthJPM Earnings- JPMorgan Chase & Co. reported a surprise gain in net interest income for the third quarter and raised its forecast for the key revenue source, even amid expectations that US interest rates will continue to fall.- Revenue from the bank’s Wall Street operations also defied analysts’ estimates, with investment-banking fees surging 31%, topping estimates for a 16% gain. Equity traders notched a 27% revenue increase.- Official: JPMorgan Chase reported strong third-quarter earnings, with earnings per share (EPS) of $4.50, beating estimates.
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Does anyone care about the data? Does the Data Matta?
Port Strike ENDED - for now
Hurricane Milton - Strong Cat5 going to hit West Coast of Florida...
Employment Report Update
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Reminder: Intel CTP is open!
Warm-Up
- Does anyone care about the data?Does the Data Matta?
- Port Strike ENDED - for now
- Hurricane Milton - Strong Cat5 going to hit West Coast of Florida...
- Employment Report
Markets
-Headwinds, Wars, Higher Rates, Higher Fuel Costs - Who Cares?
- Hurricane Impact - Oil on the move
- Yields moving higher
- Robotaxi Day!
Want to Bet?
- A federal appeals court on Wednesday refused to block a lower-court ruling allowing Americans to bet on the outcome of the 2024 congressional elections.
- This will be BIG - and a difficult thing to handicap
- Plenty of ways to eventually get into the betting craze 0 from sportsbooks to investors with binary style investments.
- Thoughts?
Hurricane Milton
- Nasty Storm hitting the Gulf Area
- Generac stock flying - up 8% Monday and 50% YTD
- Stock is down from $500 to $170 (from peak in 2021)
- Crude oil rallying - combination of Hurricane Milton and Middle East conflict
-- Follow-Up: Crude Dropping as HurcMilt not going to disrupt Gulf Oil
All Over
- Strike OVER!
- Tentative deal and back to work....after first strike since 1977
- Under the tentative new agreement, workers will earn a 61.5% raise over six years. That means the highest paid workers would make $63 per hour in the final year of the contract — up from $39.
- NO AUTOMATION - The union argues that technological advances could threaten the existence and value of union jobs, a concern that has persisted to varying degrees since the Industrial Revolution first introduced machines into the manufacturing space.
Budget Deficit - No One Cares
- The federal budget deficit was $1.8 trillion in fiscal year 2024, the Congressional Budget Office estimates.
- The estimated deficit for 2024 was $139 billion more than the shortfall recorded during fiscal year 2023.
- Revenues increased by an estimated $479 billion (or 11 percent).
- Revenues in all major categories, but notably individual income taxes, were greater than they were in fiscal year 2023.
- Outlays rose by an estimated $617 billion (or 10 percent).
- The largest increase in outlays was for education ($308 billion).
- Net outlays for interest on the public debt rose by $240 billion to total $950 billion.
Pfizer
- Starboard Value has amassed a roughly $1 billion stake in drugmaker Pfizer, according to people familiar with the matter.
- Starboard believes that Pfizer’s current leadership under CEO Albert Bourla has stepped away from its historically disciplined cost structure and investment in novel drugs, said the people, who requested anonymity to discuss confidential information freely.
- The stock is trading about 30% lower than it did in 2019.
Seriously?
- Two Democratic lawmakers are demanding that some of the biggest food and beverage companies stop engaging in “shrinkflation” — the practice of reducing product sizes while charging prices that are the same or higher.
- In pointed letters, Sen. Elizabeth Warren of Massachusetts and Rep. Madeleine Dean of Pennsylvania accused General Mills, Coca-Cola and PepsiCo of engaging in a “pattern of profiteering” through shrinkflation and by “dodging taxes.”
Employment Report
- Nonfarm payrolls increase by 254,000 in September
- Unemployment rate falls to 4.1% from 4.2%
- Average hourly earnings rise 0.4%; up 4.0% year-on-year
- Average workweek slips to 34.2 hours from 34.3 hours
- Yields Rocking higher - above 4% now.. -
Bulls and Bears - (TDI Podcast running now is Bull and next week is Bear - will be interesting divergence)
End of the Month - End of The Quarter
Seasonality features the Bulls
Fed Limericks!
NEW CTP ANNOUNCED!
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Warm-Up
- Bulls and Bears - (TDI Podcast running now is Bull and next week is Bear - will be interesting divergence)
- Strike Update - could be an issue
- Another Strike - different kind - Israel and Iran
- VP Debate tonight
Markets
- End of the Month - End of The Quarter
- Seasonality features the Bulls
- Good quarter - setting up for more gains?
- Question - Capital Gains??
- Inflation (PCE) Update
--- Fed Limericks ....And another AI generated CoverArt - what do you think?
ANNOUNCING CTP for INTC
Market Selling Off
- Iran sending in missiles to Israel started a general concern
- VIX popped over 20 for a minute
- Markets down 1%++, but found reasons to try to come back mid day
Inflation
- Inflation moved closer to the Federal Reserve's target in August, easing the way for future interest rate cuts, the Commerce Department reported Friday.
- The personal consumption expenditures price index, a measure the Fed focuses on to measure the cost of goods and services in the U.S. economy, rose 0.1% for the month, putting the 12-month inflation rate at 2.2%.
- Excluding food and energy, core PCE rose 0.1% in August and was up 2.7% from a year ago. Fed officials tend to focus more on core as better measure of long-run trends. The respective forecasts were for 0.2% and 2.7% on core.
Euro Cars - Not Good
--- Blaming China....
- Stellantis on Monday trimmed its 2024 annual guidance on the back of deteriorating "global industry dynamics" and bolstered competition from China
- The French-Italian conglomerate, known for brands such as Chrysler, Dodge, Jeep and Maserati, warned of lower-than-expected sales "across most regions" in the second half of the year.
- Stock down 8% on the news
- UK-based Aston Martin Global Holdings PLC has signaled that it expects lower profits for FY24 due to supply chain disruptions and a decline in sales in China. According to its trading update, the company now expects its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to be slightly below FY23 levels.
- In addition, it no longer expects to achieve positive free cash flow in H2 2024. Following the update, AML shares crashed by around 24% as of writing.
- Stock down 43% YTD
- What about RACE, Ford and others?
China
- WOW - Best Rally n Monday since... 1998?
- Shenzen and Shanghai index up 8% on the back of:
---China's factory activity contracted for a fifth consecutive month in September as the world's second-largest economy struggles to revive its growth momentum.
- China's industrial profits plunged by 17.8% in August from a year ago, the National Bureau of Statistics said Friday.
------ That followed a 4.1% year-on-year increase in July, the fastest pace in five months.
-------Industrial profits covers factories, mines and utilities in China.
-- While the data was better than expected, anything that shows weakness in the economy will be met with expections that there will be more easing....
-- Note: FXI (Hang Seng, up 2% - Could be time for short on parabolic move??)
Hang Seng
Interesting Tape
- Headline at 11:30am Monday : Israel tells US that it is planning a imminent ground operation in Lebanon, according to Washington Post
- Oil is steady
- Markets turn positive
- VIX falls abit
- No fear of further escalation?
Asia
- Getting weird
- Japan's Nikkei falls over 4%, -
Finally Fed makes a move (they will not be done jabbering though)
Storms heading to Florida and Gulf Coast - Natural gas prices jump
COVID Shot Stocks - "fun" while it lasted
Confidence is waning.....
CHINA!
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Warm-Up
- Finally Fed makes a move (they will not be done jabbering though)
- Storms heading to Florida and Gulf Coast - Natural gas prices jump
- COVID Stocks - "fun" while it lasted
- Confidence is waning.....
- CHINA! Bazooka Time!
Markets
- All-Time Highs - Same saying Goldilocks conditions
- Seasonality favors the bulls starting next quarter
- Uranium starting to move as people warming up to nuclear energy again
- Trump Stock on the move
Need to Pick a new CTP
Exile
- A leading economist in China has vanished following critical comments about President Xi Jinping‘s economic policies.
- What Happened: Zhu Hengpeng, deputy director at the Chinese Academy of Social Sciences (CASS), was detained after allegedly criticizing Xi in a private WeChat group. Zhu’s remarks reportedly included veiled criticisms of Xi’s leadership and comments on China’s struggling economy, reported The Wall Street Journal on Tuesday.
- The investigation into Zhu coincides with the Chinese Communist Party’s intensified efforts to suppress negative commentary about the country’s economic health. Under Xi, dissent has been increasingly punished, with critics facing imprisonment or exile.
- AH would be have cement shoes if this happened in the USA
On The Other Hand - CHINA PROP IT UP
- China said it will allow institutional investors to tap central bank financing for stock purchases and is weighing plans for a market stabilization fund, sparking the biggest rally since 2020 for the nation’s beaten-down equities.
- The People’s Bank of China will set up a swap facility allowing securities firms, funds and insurance companies to tap liquidity from the central bank to purchase equities
- The CSI 300 Index, a benchmark of onshore Chinese stocks, surged 4.3% to cap its best day since July 2020. In Hong Kong, a gauge of Chinese shares was up more than 5% intraday.
- MCHI up 8%, FXI up 8.5%, YINN (3X) up 25%
M&A FOLLOW UP
- Buyout firms Vista Equity Partners and Blackstone are in advanced talks to acquire Smartsheet, in a deal that could value the collaboration-software maker at close to $8 billion, people familiar with the matter said on Monday.
- NEWS: Collaboration software maker Smartsheet on Tuesday announced it would be acquired by Blackstone and Vista Equity Partners in an all-cash deal which valued the company at $8.4 billion.
THE FED
- Cuts rates by 0.50%
-- Seems to have been looking to appease markets
- Initial reaction was blah... Unwinding of positions put on right before the decision
- Next day stocks soared
- “The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance,” the Federal Reserve statement said.
- Last time Fed cut rates was COVID days , time before that was Financial Crisis of 2008
- The federal funds rate is now a range between 4.75%-5%
Meanwhile
- Consumer confidence in September suffers largest decline since August 2021
- The key takeaway from the report is that consumers' views of the current labor market situation continued to soften and became more pessimistic about future labor market conditions -- a sentiment that could weigh on consumer spending activity.
---- The Present Situation Index dropped to 124.3 from an upwardly revised 134.6 (from 134.4) in August. -
Best week in a long time - markets popping!
Cats and Dogs - all anyone can talk about these days - DogCat Bounce anyone?
More back to work directives ....
Apple disappointing again.
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Warm Up
- Best week in a long time - markets popping!
- Cats and Dogs - all anyone can talk about these days - DogCat Bounce anyone?
- More back to work directives ....
- Apple disappointing again
- All of a sudden - Now the Biden-Harris administration
Market Update
- BIG week of central bank rate decisions
- Rotation - still a big item keeping markets in check
- Rates LOW - bond traders overconfident?
- Oil comes back after miserable 2 weeks
- TrumpCoin?
Central Banks
- The Federal Reserve’s highly anticipated two-day meeting, which gets underway Tuesday, is poised to take center stage.
- Elsewhere, Brazil’s central bank is scheduled to hold its next policy meeting on Wednesday.
- The Bank of England, Norway’s Norges Bank and South Africa’s Reserve Bank will all follow on Thursday.
- Bank of Japan will provide its rate decision Friday
--- Markets getting a bit more volatile ahead of this Fed rate decision
BACK TO WORK!
- Amazon is instructing corporate staffers to spend five days a week in the office, CEO Andy Jassy wrote in a memo on Monday.
- The decision marks a significant shift from Amazon’s earlier return-to-work stance, which required corporate workers to be in the office at least three days a week. Now, the company is giving employees until Jan. 2 to start adhering to the new policy.
One Day Later
- Oracle provide some really nice earnings and guidance that the market loved... (Discussed last week)
- A day later:
--- Oracle now sees at least $66 billion in fiscal 2026 revenue, around $1.5 billion more than analysts had expected.
---- Capital spending also will increase.
------The company plans for over $104 billion in revenue in the 2029 fiscal year.
- Odd that this was the next day
- Stock up 55% - 2nd best of tech companies just behind Nvdia
- Larry is now 2d richest person in the world behind Elon Musk
Economics
- August Retail Sales 0.1% vs -0.2% Briefing.com Consensus; prior revised to 1.1% from 1.0%
- August Retail Sales ex-auto 0.1% vs 0.2% Briefing.com Consensus; prior unrevised at 0.4%
- August Industrial Production 0.8% vs 0.1% Briefing.com Consensus; prior revised to -0.9% from -0.6%
- August Capacity Utilization 78.0% vs 77.9% Briefing.com Consensus; prior revised to 77.4% from 77.8%
--- Generally economy is speeding up again and looks like signs that manufacturing may be picking up
More Issues
- This is a bad apple
- The Office of the Comptroller of the Currency (OCC), a top banking regulator in the United States, said on Thursday it has issued an enforcement action against Wells Fargo due to deficiencies in its risk management practices.
- There will be no penalties - but company is still in the penalty box due to past issues
China Apple
- Online retailers in China have slashed the prices of Apple’s new iPhone 16 series ahead of its official release, as consumers in the world’s largest smartphone market hold out for the release of the US company’s first on-device artificial intelligence (AI) software.
- They are blaming this on the delay of any significant AI features
Intel Gets $$$
- The Biden-Harris Administration announced today that Intel Corporation has been awarded up to $3 bln in direct funding under the CHIPS and Science Act for the Secure Enclave program. The program is designed to expand the trusted manufacturing of leading-edge semiconductors for the U.S. government. -
August ends on the high side - (like July) and then gets knocked down hard (like August) and then Rips higher on Monday (like August)
Rate cut bets are in place
Market very skittish - September not the best month on average
VIX hits 25 last week
PLUS we are now on Spotify and Amazon Music/Podcasts!
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Warm Up
- Another Rough Start to the month
- Apple Event - market was
- Last episode - ETF and Funds Education - lots of great comments on that!
- DEBATE TIME - right in the middle of our show! Someone needs to look at our schedule
Market Update
- August ends on the high side - (like July) and then gets knocked down hard (like August) and then Rips higher on Monday (like August)
- Rate cut bets are in place
- Market very skittish - September not the best month on average
- VIX hits 25 last week
- Yen Carry trade issue not fully resolved
- YIELD CURVE UPDATE
Big News
- Yield curve normalizes for 2/10's
- Yield curve is not normal - this is what happened in 2001 and 2008
Apple Event
- Apple introduces Apple Watch Series X with a new design.
- Largest most advanced display ever with 30% more screen area.
- The display is larger than the Apple Watch Ultra.
- Display will be 40% brighter.
- Watch will be 10% thinner than Apple Watch 9.
- Background noise will be surprised on phone calls.
- Smart Stack will add widgets whenever you need them.
- Adding translate application.
-Apple Watch can track menstrual cycles.
- Apple Watch can alert users to sleep apnea.
- Starts at $399.
- A few incremental updates otherwise and talk of AI to come - one day someday
More Apple
- Europe's top court on Tuesday ruled against Apple in the tech giant's 10-year court battle over its tax affairs in Ireland.
- The Commission in 2016 ordered Dublin to recover up to 13 billion euros ($14.4 billion) in back taxes from Apple, at the time saying that the tech company had received "illegal" tax benefits from Ireland over the course of two decades.
- So is this final this time?
- How is this possible anyway - Ireland granted tax benefits for the purpose of benefiting jobs etc....
Apple Competition
- Huawei's tri-fold phone receives over 4 mln pre-orders ($2,800 per)
- Have you seen this?
- VERY COOL device
Palantir
- Palantir Technologies hits best levels since early 2021 following inclusion in S&P 500
- +15% on the news
Dell
- Dell also is added to the S&P 500
- Etsy and American Airlines out
Tech - Oracle Earnings
- Oracle beats on some metrics and has some great outlook
- Missed on EPS
- Partnering with Amazon
- The company said Oracle Database is thriving, and the multi-cloud agreements it has with Microsoft, Google, and now AWS make it easier for its customers to run their Oracle Databases in the cloud.
- Stock at ATH
NVDA
- WORST DAY EVER for a stock
- Slide last week took at $300 BILLION on market value in one day.
- New DOJ probe in anti-trust case
- The agency is asking questions about whether Nvidia makes it harder to switch to other suppliers of AI chips.
- Nvidia has over 80% of the market for data center AI chips, according to industry estimates.
Best Buy
- People are buying...
- Raising full year guidance
- Comparable sales declined 2.3% during the quarter, compared with a 6.2% decline a year earlier.
--- It is all about the expectations...
Glasses - Again?
- Qualcomm CEO Cristiano Amon told CNBC the chip designer is working with Samsung and Google to explore a mixed-reality set of glasses linked to a smartphone
- Last year, Google, Samsung and Qualcomm struck a partnership to develop mixed-reality technology.
- This is supposed to be a smaller version of what is out the... -
A show dedicated to the many questions of our listeners.
We focus on ETFs and Mutual Funds, contrasting and comparing the differences.
Financial Literacy is not just one month a year!
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Talking Financial Literacy
We are going to discuss details of what an ETF is and the differences from those investment vehicles and mutual funds.
ETFs are investment funds that trade on stock exchanges, holding a diversified portfolio.
ETFs offer instant diversification by allowing investors to buy a small slice of a variety of assets.
ETFs trade like stocks, with prices fluctuating throughout the trading day.
Popular for their diversification, lower costs, trading flexibility, and tax efficiency.
Types of ETFs include stock, bond, commodity, international, sector/thematic, and inverse/leveraged ETFs.
Downsides include market risk, tracking errors, liquidity issues, and the complexity of specialized ETFs.
Key differences with mutual funds include trading mechanisms, costs, management styles, and tax implications.
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Closest to The Pin for - United Healthcare (UNH)
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PLUS a one-of-a-kind DHUnplugged CTP Winner's certificate..
FED AND CRYPTO LIMERICKS
JCD Score ()
See this week’s stock picks HERE
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Path Change - Once the air clears, how will markets react?
Cracking down on excessive "junk" fees
Cracking down on Unfree Speech?
Jackson Hole - big update about "The Path"
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DONATIONS ?
Warm Up
-Cracking down on excessive "junk" fees
- Cracking down on Unfree Speech?
- Jackson Hole - big update about "The Path"
- Intel is nervous
Market Update
- Lower End Consumers Fueling Spend
- Big news this week - NVDA earnings
- Rotation ? Consumers are still spending (Discounters loving it!)
- Taxing Unrealized Gains?
Political rhetoric
- Taxing Unrealized gains - questions coming in
--- Realize this is for the ultra-rich and the potential to get this passed is not high
- BUT - Harris campaign wants to see about higher taxes - which are needed, but not a good thing
----- How else are we going to pay back this mountain of debt?
Jackson Hole
- Time to Change the Path of Rates
- Powell was clear and they are now pricing in a 100% probability of a 0.25% rate cut for September
- 0.50% will probably scare some people - so 0.25% is plan
- Odd ahead of election - but maybe Powell realizes he is behind the curve
Target
- Against the odds?
- Target beat Wall Street’s earnings and revenue expectations on Wednesday.
- Sales at the discounter grew as shoppers made more visits to Target’s stores and website and bought more discretionary items like clothing.
- Yet, the retailer struck a cautious note, saying it expects comparable sales for the full year to be in the lower range of its guidance.
- Target raised its profit guidance, however, saying it expects adjusted earnings per share to range from $9 to $9.70, up from the previous range of $8.60 and $9.60.
- Investors loved it! Stock moved from $135 - $169 on the news (back to $158)
---- Walmart near ATH and Ross Stores stock at ATH
SpaceX - Boeing
- So embarrassing for Boeing...
- Starliner is going to come back - Unmanned...
- Butch Wilmore and Suni Williams, will return to Earth on a SpaceX vehicle early next year
Telegram
- Telegram messaging app CEO Durov arrested in France
- Pavel Durov, the Russian-born billionaire founder and owner of the Telegram messaging app, was arrested at Le Bourget airport outside Paris shortly after landing on a private jet late on Saturday and placed in custody.
- Free speech under fire? Or is this more than just a Twitter alternative.
- Supposedly 900M Daily Active users???
Junk Fees
- FTC trying to crack down on "junk fees"
- Last year, 15% of restaurant owners added surcharges or fees to checks because of higher costs, according to the National Restaurant Association
- Inflation fee, credit card fee, health-care fee, house fee
- Restaurants are fighting back as they want the fees to add to bottom line and increase profitability and benefit staff.
- Makes the entire idea of going out to eat an expensive proposition.
What is this?
- Microsoft said Friday it will hold a conference in September for cybersecurity firms to discuss ways the industry can evolve following a faulty CrowdStrike software update that caused millions of Windows computers to crash in July.
- Microsoft will meet with CrowdStrike and other security companies at its campus in Redmond, Washington, on Sept. 10 to discuss how to prevent similar issues in the future
--- Wasn't this already something that was not supposed to happen?
- The executive said participants at the Windows Endpoint Security Ecosystem Summit will explore the possibility of having applications rely more on a part of Windows called user mode instead of the more privileged kernel mode.
- Software from CrowdStrike Check Point, -
Jackson Hole ECO Confab (this week)
Live Nation is in trouble
Icahn get a slap on the wrist
Gold - ripping - where to next?
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Warm Up
- Jackson Hole ECO Confab (this week)
- Live Nation is in trouble
- Icahn get a slap on the wrist
- Gold - ripping - where to next?
- Price Controls - 3rd Rail?
Market Update
- Nearing all-time highs again - Buy the Dips!
- Yields under 4% on 10-Year - Yen still in control
- Back to Overbought again - still thinking not out of the woods
- Lowe's and Home Depot Outlook - POOR (But stocks are up)
Jackson Hole
- Aristocrats line up to speak
- Big doings as often a platform for Fed and other central bankers to make policy adjustments
- Powell scheduled to speak at 10am Friday
--- With all of the latest data and market push - what will he do??
- Before that - Wednesday we will see the July FOMC minutes
GOLDDDDDDDD
- Gold hit all-time high last Friday ($2,509.65) !!!!NOW $2,563!!!!!
- WHY? Discussion ranges from Fed Reserve, Election, Middle East, India Buying....
- Gold has been a better GOLD then Bitcoin - just saying...
Monopoly - Finally!
- Ten Additional States Join Justice Department’s Suit Against Live Nation-Ticketmaster for Monopolizing Markets Across the Live Concert Industry
- Today, the Attorneys General of Indiana, Iowa, Kansas, Louisiana, Mississippi, Nebraska, New Mexico, South Dakota, Utah and Vermont joined a civil antitrust lawsuit filed by the Justice Department, 29 other states and the District of Columbia against Live Nation-Ticketmaster for monopolization and other unlawful conduct in violation of Sections 1 and 2 of the Sherman Act.
- Stock does not seem to care - or believe anything adverse will happen
AMD buys ZT Systems
- $4.9 Billion
- What is ZT Systems? The company engages in full rack deployment -- a block filled with servers, storage, switches, etc. -- for hyperscale data centers. ZT also commands a data center infrastructure manufacturing business, for which AMD announced it would seek out a strategic partner to offload this part of the company.
- Clearly the company does not have a CHIP or infrastructure ready for a major AI play at this time.
Carl Ichan - Hand Slap
- Carl Icahn and his publicly traded company Icahn Enterprises settled with the SEC over allegedly failing to disclose billions worth in stock-backed borrowing.
- Icahn and IELP will pay a combined $2 million in fines, without admitting or denying wrongdoing, over the failure to disclose as much as $5 billion in margin loans that were backed by Icahn’s stake in the company.
- Icahn, a well-known activist investor, had been facing pressure from another activist short seller in 2023. (Hindenburg which is still short the shares)
Circle K 11?
- Canada's Alimentation Couche-Tard (Circle K) has sounded out Japan's Seven & i (7-Eleven) about a potential takeover, the two companies said on Monday, making the 7-Eleven owner the largest-ever Japanese target of a foreign buyout.
- While the value of the offer has not been disclosed, the bid is the latest example of the growing interest in Japanese companies by Western investors, who have been drawn by the country's push for better governance.
- News of the deal sent shares of Seven & i surging by almost 23% in Tokyo
Chicken and the Egg
- Chicken prices are going up
- Perdue Foods is recalling more than 167,000 pounds of frozen chicken nuggets and tenders after some customers reported finding metal wire embedded in the products.
- According to Perdue and the U.S. Agriculture Department’s Food Safety and Inspection Service, the recall covers select lots of three product... -
Cut taxes on SS and Tips?President decides rates?China - inflation ticking upYEN volatility - NOT OVERPLUS we are now on Spotify and Amazon Music/Podcasts!Click HERE for Show Notes and LinksDHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.Love the Show? Then how about a Donation?Follow John C. Dvorak on TwitterFollow Andrew Horowitz on TwitterDONATIONS ?Warm Up- Cut taxes on SS and Tips?- President decides rates?- China - inflation ticking up- YEN volatility - NOT OVER- Announcing the WINNER for the UNH CTPMarket Update- CRISIS AVERTED- August doldrums - but big week of Eco Data- Market Punishing earnings misses - more than usual- Same old = going back to the Mega-Cap trade while pulling other sectors down- PPI out - changing directionCrisis Averted- Monday (last) Yen plunge then pick up - Come on- Japan markets fell 12% then rallied 10% - intervention anyone?--- Clearly there is an invisible hand at work here---- Plus Japan officials waled back their "hawkish" comments---- 17 years of ZERO or NEGATIVE rates, markets don't want to give that up--- Do you know why this is all happy pappy now? How did they resolve the 2 day crisis? (Hint - $$$$)- Japanese markets have recovered ALL of the losses since last Monday - ALLVolume/Vacations - August- Volumes are down across the board. Aside from a couple of days when markets moved lower- Will probably continue to see slow markets (unless some outside shock) through Labor Day- However - big week of ECO data- - CPI, PPI, UMich, Import/Export prices, Retail Sales (no one has a clue what the trajectory is from here)Month to DateMTDIWNiShs Russell 2000 Value ETF-7.87%IWMiShs Russell 2000 ETF-7.10%IWOiShs Russell 2000 Grwth ETF-6.15%IWDiShs Russell 1000 Val ETF-2.45%IWBiShs Russell 1000 ETF-1.68%IWFiShs Russell 1000 Gwth ETF-1.00%Really?- Former President Donald Trump this week repeated his plan to eliminate taxes on Social Security benefits for seniors.- The Republican nominee called for "no tax for seniors on Social Security" during a "Fox & Friends" interview Wednesday- Of course Harris/Walz also want to cut taxes on SS now...***** Some "experts" say that this will hurt the solvency of SS and Medicare even more - now expected to run out in 2035--- Oh - let's eliminate taxes on TIPS---- The Waiters & waitresses workforce and tipped in service industry are about 4 Million people (1% of populationWhere do we stand on this..- Presidents having a direct say - or vote - on Fed decisions?Switcher-rooo- Chipotle Mexican Grill announces that Brian Niccol, Chairman and CEO has accepted the role as Chairman and Chief Executive Officer of Starbucks (SBUX) and will be leaving the Company effective August 31, 2024- -On the news, SBUX up 17% and CMG down 10%China- China's consumer prices rose by a more-than-expected 0.5% in July from a year ago, according to data from the National Bureau of Statistics released Friday.- Analysts polled by Reuters had expected a slight pickup in the consumer price index to 0.3% in July from a year ago, versus 0.2% in June.- Is this good news or bad?PPI- July Core PPI 0.0% vs. 0.2% Briefing.com consensus; prior revised to 0.3% from 0.4%-- Disinflation is speeding up - nearing DEFLATION concerns- Tomorrow - CPIAnother one...- Home Depot on Tuesday topped quarterly expectations, but cautioned that sales will be weaker than expected in the back half of the year as high interest rates and consumer uncertainty dampen demand.- The home improvement retailer said it now expects full-year comparable sales to decline by 3% to 4% compared to the prior fiscal year. It had previously expected comparable sales, a metric that takes out the impact of store openings and closures and other one-time factors,
-
Japan stocks PLUNGE!
Tech stocks in correction - nearing bear market.
What does the crystal ball tell us? Where is the PPP?
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Warm Up
- OMG - Did you see that?
- Fear - blood in the streets
- Looking for someone to blame for the selloff
- Boeing news....Finally
Market Update
- RISK off - all risk assets (aside from bonds) down in August
- Bitcoin - CRUSHED - as with other cryptos - so much for safe-haven
- 13:1 Day Decliners to Advancers (that is pretty significant.
- Records broken - Worst day in 50 years for one stock
Where is the PPP?
- Now we are hearing about an emergency cut - looking for a 0.75% cut (Jeremy Seigel)
- Investors looking for a save - Plunge Protection Team!!!!!!!!!!!!!!
- Seems like Tuesday in Japan - PPP to the rescue - +10%
Bitcoin and ETH
- Seriously - takes it on the chin down 15% with global market sell-off
- What happened to it being a safe-haven - all but discounted at this point....
Japan's first increase in decades
- Actually, last increase was 2017 - so 17 YEARS OF LOW RATES
- The Widowmaker trade is finally working - but for how long?
- Japan's major stock market - YEN Up 11% since 7/11/2024 and the Nikkei is down 23% (28% at low on Monday) since 7/11/2024
- Carry-Trade (borrow Yen at low rate and reinvest) BLOWING UP
- WORST day for Japan's markets since Black Monday in 1987
--- The loss of 4,451.28 points on the index was also the largest in terms of points in its entire history.
-=-=-=-= This is not the first time Japan's central bank has caused this type of situation. Their entire investing and monetary process is very dangerous.
-=-=-=-=- - Japan's Nikkei had the best day since 2008 on Tuesday
Repercussions
- Stocks around the world got hammered - worrying about YEN unwind as well as the earnings and outlook from Tech
- Kospi -8% down Monday
- World stocks off by 3%+
- UGLY moves and lots of trading opportunities
- $1 Trillion in market cap erased from Mega-Caps Monday (Mag7)
AND
- A sharp drop in U.S. stocks is provoking selling from volatility-sensitive funds, exacerbating a selloff
- Volatility control funds - systematic investment strategies that typically buy equities when markets are calm and sell when they grow turbulent have gorged on stocks as indexes soared to record highs in 2024
- More recently, they have begun selling, as worries over the economy and tech earnings rattle investors: volatility control funds have dumped about $83.6 billion of U.S. equity futures over the last two weeks
VIX
- SPIKES to 65 on Monday morning.... (Then comes down to about 36 on the close)
- Historical spike like that are interesting signs that it may be end of route (or getting close)
- - 80's for Pandemic and peak of Financial Crisis
---- Unbelievable move in 3 days that seems that most people were unprepared for
Economic Issues
- Nonfarm payrolls grew by just 114,000 in July, below the downwardly revised 179,000 in June and the Dow Jones estimate for 185,000.
- The unemployment rate edged higher to 4.3%, its highest since October 2021, triggering an economic rule on recessions.
- Health care again led, adding 55,000 to payrolls. Other notable gainers included construction (25,000), government (17,000), and transportation and warehousing (14,000).
- Average hourly earnings increased 0.2% for the month and 3.6% from a year ago. Both figures were below respective forecasts for 0.3% and 3.7%.
Google loses Anti-Trust
- Google’s payments to make its search engine the default on smartphone web browsers violates US antitrust law, a federal judge ruled Monday, -
New Study - Power and AI
Apple releases new AI (first version)
Bitcoin - Not Buying the Electoral Rhetoric
Correction territory for many tech names
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DONATIONS ?
Warm Up
- NEW CTP ANNOUNCED!
- Jailtime? Short Seller targeted
- The EXCITING Summer Olympics
- Last vote - never again!
Market Update
- New Study - Power and AI
- Apple releases new AI (first version)
- Bitcoin - Not Buying the Electoral Rhetoric
- Correction territory for many of the tech names....
- Microsoft Earnings...
Crowdstrike Glitch
- 2nd shoe is dropping
- Lawsuits are on the way - hitting Crowdstrike and Microsoft
- Several announced this week.....
- CRWD still falling - Down 40% since before the "glitch"
Microsoft
- Reports Q4 (Jun) earnings of $2.95 per share, $0.01 better than the FactSet Consensus of $2.94; revenues rose 15.2% year/year to $64.73 bln vs the $64.38 bln FactSet Consensus.
- Azure and other cloud services revenue growth of +29%, +30% constant currency vs +30-31% CC prior guidance.
- Guides next quarter is below consensus
- Stock getting hit - down 7% initially, but comes back a bit in after-hours
AMD
- Better than feared - stock up after hours nicely
Intel
- cutting 1000's of jobs - they are not a contender at all
Citron Boss
- The activist short seller Andrew Left surrendered in Los Angeles on Monday to face federal criminal securities fraud charges, a spokesman for the U.S. Attorney’s Office there said. (Like he was in jail until bail was paid!)
- $10M Bail
- Andrew Left - is accused of using his public platform, which included social media posts on X and appearances on CNBC, to make illegal profits of at least $16 million by manipulating stock market activity and trading in a way that was contrary to the positions he publicly purported to take.
- Left is also being sued by the U.S. Securities and Exchange Commission, which in a civil complaint filed last week in LA federal court accused him and Citron of “engaging in a $20 million multi-year scheme to defraud followers by “publishing false and misleading statements regarding his supposed stock trading recommendations.”
- “Left bragged to colleagues that some of these statements [he made] were especially effective at inducing retail investors to trade based on his recommendations and said that it was like taking ‘candy from a baby,’” the SEC alleges in that lawsuit.
Big Boys - Tuesday Update
- NVDA (-6.5%) extends to session lows, as AI group comes under pressure ahead of key earnings reports and AI capex guides... other AI movers of note include ARM -6%, VRT -6%, SMCI -5.5%, QCOM -4%, MU -3%, SMH -3%
Eurozone
- The euro zone's economy grew by more than expected in the second quarter of 2024, flash figures from the European Union's statistics office showed Tuesday.
- The zone's gross domestic product rose by 0.3% in the three months to the end of June compared to the previous quarter, the data showed. Economists polled by Reuters had expected a 0.2% increase on a quarterly basis.
McDonald's Earnings
- McDonald’s on Monday reported quarterly earnings and revenue that missed analysts’ expectations as same-store sales declined across every division.
- Earnings per share: $2.97 adjusted vs. $3.07 expected
- Revenue: $6.49 billion vs. $6.61 billion expected
- “At the end of the day, we expect customers will continue to feel the pinch of the economy and a higher cost of living for at least the next several quarters in this very competitive landscape,” McDonald’s U.S. President Joe Erlinger said
- Stock - Went up
- Big plan ????? Bring back the Value Meal (How does that actually help?) -
DJIA - FAILED - worst week in agesHuge Failure of tech - Crowdstrike getting skewered (Down ~ 30% since incident)Dangerous market - running on emotionsTesla Earnings are out...PLUS we are now on Spotify and Amazon Music/Podcasts!Click HERE for Show Notes and LinksDHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.Love the Show? Then how about a Donation?Follow John C. Dvorak on TwitterFollow Andrew Horowitz on TwitterChatroom still a work in progress it appearsWarm Up- Politics Goes off the rails - Biden out (Failed)- Huge Failure of tech - Crowdstrike getting skewered (Down ~ 30% since incident)- Dangerous market - running on emotionsMarket Update- DJIA - FAILED - worst week in ages - massive losses as UNH fails to keep up (accounted for 500+ points of that big rally in July)- Market broadened out finally - then the mega-caps started to come in and market was crushed -- Tesla Earnings are out - other tech names tooNeed a new CTPMarket Emotions- Now that we are in the throws of the election cycle - dangerous market- Running on emotion - and you can see that we levels (round like futures markets @ES - 5,600 and @NQ 20,000 levels as battle lines)- People will think that one or other candidate is good or bad and will invest accordingly (usually without facts)- Biden dropping out has interesting impact - Now we have one candidate that we really do not know actual policy and track record. Also unknown VP ...Crowdstrike Glitch- Anything on your end a problem?- Some minor trading issues with Schwab for a minute on Friday- Airlines - still seem to be having issues- Bigger issues when relying on single company?- Friday and over weekend MSFT said that they restored a majority of services- Hackers are already taking advantage of situation and Crowdstike out with warnings (some firms may get phished into beleiving that there is a fix and it is actually a hack)Delta Offers Apologies+- CEO Ed Bastian offered Freq flyer miles to travelers that were stuck due to Crowdstrike "glitch"- 800 flights were cancelled Sunday (22% of flights)- The airline was offering flight attendants extra pay to pick up shifts- WHO IS GOING TO PAY FOR THIS? (Crowdstike and passengers)Tech - Wiz Walks- $23 billion - they say NO THANKS- Wiz - 4 year old start up that makes security tools to protect data centers- May valuation was $12 billion- Company wants to go the IPO routeElection- Sooooo - thoughts on the Biden dropout? (Via letter and Social Media - is that weird?)- Trump Trade fade?- Vance tough on anything foreign? (USA First)- Anyone else aside from Harris?Bank Earnings- Looking back - not much to be upset about - so that is good- Rate expectations are for September (Dec more likely)- Yield curve has steepened (good for profit margin of banks)- Fed continues to be dovish- Trump expectations of reduced regulations?More Earnings- Google/Alphabet - Alphabet prelim Q2 $1.89 vs $1.84 FactSet Consensus; revs $84.74 bln vs $84.22 bln FactSet Consensus--- Margin 32% vs 29& a year ago (Stock initially up then tuend lower on lower advert revenue and other AI comments)- Tesla Earnings - Tesla prelim Q2 $0.52 vs $0.61 FactSet Consensus; revs $25.5 bln vs $24.38 bln FactSet Consensus-- Tesla prelim: GAAP gross margin of 18.0%, down 23 bps yr/yr---- Tesla prelim: reiterates that in 2024, its vehicle growth rate may be notably lower than growth rate achieved in 2023 (Stock down 5%)- Visa: Reports Q3 (Jun) earnings of $2.42 per share, excluding non-recurring items, in-line with the FactSet Consensus of $2.42; revenues rose 9.6% year/year to $8.9 bln vs the $8.92 bln FactSet Consensus. (Stock down 10%)Warren- Berkshire Hathaway trimmed its gigantic Bank of America holding for the first time in four and a half years following the bank's strong 2024 run.
-
Market Rotation continues - "Trump" stocks got boost after weekend (Biden stocks took a hit)
Risk On - Risk Off is the play (Fundamentals are not being considered at the moment)
KRI Indicator - Doing something not done since June 2020
Earnings growth expected to continue....
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Chatroom should be back up and running....
Warm Up
- Assassination Attempts = Market Positive (for US Markets ONLY)
- ALL TIME HIGHS ACROSS THE BOARD - SMALL CAPS ON A BENDER
- Disinflation OUT - Deflation IN
- College athletes - Min Wage?
Market Update
- Market Rotation continues - "Trump" stocks got boost after weekend (Biden stocks took a hit)
- Risk On - Risk Off is the play (Fundamentals are not being considered at the moment)
- KRI Indicator - Doing something not done since June 2020
- Earnings growth expected to continue....
- Gold at ATH - Bitcoin moving - Risk on or Worries about the future?
OH MY
- Small Caps +10% MTD , 11% YTD (Tom Lee calling for 40% move over next 12 weeks...)
- Value over Growth
- Real Estate - Builders - WOW!
--- Jump from 50 to 400+ 52 Week Highs today
----- Money coming out of Big boys - rotating and it is uneven pull/push
- KRE - Regional banks up 14% this month
----- DJIA UP BIG AGAIN - Rates holding at lower end of the range
Post Assassination Attempt (Monday Markets)
- European Markets RED across the board
- Russian Market GREEN
- China RED
- Japan RED
- US Markets GREEN
- Bitcoin and Ether - GREEN
Powell on Monday
- Markets came in as Powell -ONCE AGAIN - repeated the same mantra of not done - but looking to cut before we reach 2%
-B.O.R.I.N.G.
Trump Media
- DJT Stock: Trump Media shares surged over 50% in premarket trading Monday following the attempted assassination of former President Donald Trump at a rally in Pennsylvania on Saturday.
- Was up 30% by end of day on Monday
China Economic Update
- China's National Bureau of Statistics on Monday said the country's second-quarter GDP rose by 4.7% year on year, missing expectations of a 5.1% growth, according to a Reuters poll.
- Retail sales also missed expectations, rising by 2% year-on-year in June, versus the 3.3% forecast.
- Industrial production beat expectations up by 5.3% in June from a year ago, above the forecast 5% increase.
- Urban fixed asset investment for the first six months of the year rose by 3.9%, matching expectations.
- China's GDP grew by 5.3% year on- year in the first quarter.
KRI Indicator
- Hitting +6 and that has not happened since June 2020
- First time over +5 since Dec 2023 (pulled back a few days later, then continued its upward trajectory
- Rolled over a bit a few days later then continued its upward trajectory (BULL MARKET)
Any Surprise? Retail....
- Macy's -14.2% is sharply lower after terminating M&A talks with Arkhouse Mgmt and Brigade Capital
- Burberry, a luxury brand which trades in London, also issued a profit warning and named a new CEO.
- These developments are leading to weakness in some department store names: JWN -3%, KSS -2.7%, DDS -2.3%.
- Consumer is starting to fight back?????
DEFLATION?
- CPI was NEGATIVE MoM
- PPI was hot and cold - depending on what number you looked at
Deflation
CPI Chart
Finally!
- Archegos Capital Management founder Sung Kook "Bill" Hwang was convicted of fraud and other charges by a jury in Manhattan federal court on Wednesday at a criminal trial in which prosecutors accused him of market manipulation ahead of the 2021 collapse of his $36 billion private investment firm.
- The trial centered on the implosion of Hwang's family office Archegos, -
Shark Week (Market Style) - Whale Gorging - Big Teeth - Big AppetitesEarnings season coming upBiden staying in the race (for now)Complacency nearing a tipping point.PLUS we are now on Spotify and Amazon Music/Podcasts!Click HERE for Show Notes and LinksDHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.Love the Show? Then how about a Donation?Follow John C. Dvorak on TwitterFollow Andrew Horowitz on TwitterWarm Up- Shark Week - Whale Gorging - Big Teeth - Big Appetites- Earnings season coming up- Biden staying in the race- Market Moves - the inside track- NEW - ALL ABOUT BIDEN ISSSUESMarket Update- Big Swings - Massive Rotation- Employment Report for June- Market Moves - the inside track- Big Box - down to a fewFed First- Fed Chairman Jerome Powell Q&A with Senate Banking Committee: The "likely next direction" of policy will be a loosening of policy; rate hike not likelyEmployment Reports- Private payroll growth edged lower in June, according to a report Wednesday from ADP that indicates a potential slowdown in the U.S. labor market.- Companies added 150,000 jobs for the month, below the upwardly revised 157,000 in May and the Dow Jones consensus estimate for 160,000. The total was the lowest monthly gain since January.- BLS Official saw Unemp rate tick up to 4.1%-Total nonfarm payroll employment increased by 206,000 in June- Job gains occurred in government, health care, social assistance, and construction.The Inside Track Lowdown-- People asking me "When will this end? It is crazy!"- This week we will be treated to CPI and PPI.- As it stands, Powell made comments after the close on July 3rd that they were not satisfied with the rate of change related to inflation. There is more work to be done he said. But, the markets don't really care about that - they see a cut in September and December.- The general direction of the markets - or path of least resistance appears to be up.- Investors are gorging themselves on AI related names.- The big boys (and girls) of the market are taking in big money - helping to keep markets buoyed.- - It has the look and feel of great white sharks in a ravenous feeding frenzy over a rotting whale corpse.- Full Disclosure - we hold a good number of these names in our core equity allocation. Microsoft, Nvidia, SMCI, Google (Alphabet), Meta (Facebook) and several more.- Monday moves - the DJIA was up big to start the day and at the lunchtime break was in the red. The money clearly flowed out of DJIA and into the NASDAQ100 again. So, this is how it will be for a while, or until something changes. And, that may very well be the next batch of earnings through the season that begins on this coming Friday with the major financial names.Ford- Ford truck sales, which includes pickups and vans, totaled 308,920 vehicles during the period, the company's best second-quarter performance for the category since 2019, Ford said. Sales in its F-Series totaled 199,463 vehicles.- Sales of Ford electric vehicles totaled 23,957 during the second quarter, up 61%.- The automaker said its EVs, in particular the Mustang Mach-E and F-150 Lightning, are drawing new customers to the company.- Stock is stuck in a rangeBoeing- Boeing has agreed to plead guilty to a criminal fraud conspiracy charge and pay a fine of $243.6 million to resolve a U.S. Justice Department investigation into two 737 MAX fatal crashes, the government said in a court filing on Sunday.- The plea deal, which requires a judge's approval, would brand the planemaker a convicted felon in connection with crashes in Indonesia and Ethiopia over a five-month period in 2018 and 2019 that killed 346 people.- Smart - quick slap on the wrist and get it over with (for publicity sake)- As part of the deal, the planemaker agreed to spend at least $455 million over the next three years to...
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Let them eat tech!
Meme stock mania may be dying down
Short week - July 3rd 1/2 day, July 4 - closed - July 5?
How About those Florida Panthers?
PLUS we are now on Spotify and Amazon Music/Podcasts!
Click HERE for Show Notes and Links
DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.
Love the Show? Then how about a Donation?
Follow John C. Dvorak on Twitter
Follow Andrew Horowitz on Twitter
Warm Up
- Let them eat tech!
- Meme stock mania may be dying down
- Short week - July 3rd 1/2 day, July 4 - closed - July 5?
- How About those Florida Panthers?
Market Update
- Heavily weighted toward 10 stocks - breath sucks
- Seeing slowdown in consumer confidence and holding steady on most economic reports
- Some concerns mounting about Russia
- Stress Tests - Anyone Surprised?
Russia Issues
- NATO wants to put a senior civilian official in Kyiv, Ukraine
- Market was a little concerned about this - as new broke, selling occurred (for about 5 minutes)
HA! Play with Fire
- Keith Gill, the investor known as "Roaring Kitty" who helped spur the meme stock mania of 2021, was sued by GameStop investors who said they lost money through his "pump-and-dump" scheme for the videogame retailer.
- A proposed class action accusing Gill of securities fraud was filed on Friday in the Brooklyn, New York federal court.
- Investors led by Martin Radev, who lives in the Las Vegas area, said Gill manipulated GameStop securities between May 13 and June 13 by quietly accumulating large quantities of stock and call options, and then dumping some holdings after emerging from a three-year social media hiatus.
More Kitty Hoo-Haa
- Shares of Chewy popped in the premarket trading Monday after a Securities and Exchange Commission filing showed meme stock trader "Roaring Kitty" took a stake in the pet food e-commerce retailer.
- The filing showed Keith Gill bought just over 9 million shares — amounting to a 6.6% stake in the company. That makes him the third-biggest Chewy shareholder, according to FactSet. Based on Friday's close, that stake is valued at more than $245 million.
- Stock was initially p 16% in premarket (that is after some wild swings last week)
---- Close DOWN 6% on the day after that initial pop
- This guy is up Ryan Cohen's butt pretty far..
Chipotle Split Update
- Trading near a post-split low
- Stock initially moved higher toward $68 then reverses hard over the past few sessions, trading near $60
- This is important as investors may not just run into split announcements after this performance.
---- Or people are finally agreeing with JCD on the lack of taste?
Boeing
- Boeing said Monday that it will buy back its struggling fuselage maker Spirit AeroSystems in an all-stock deal that the plane maker has said will improve safety and quality control.
- It said it agreed to pay $37.25 a share in Boeing stock for Spirit, giving the aerospace company an equity value of $4.7 billion. Including Spirit’s debt the deal has a transaction value of $8.3 billion Boeing said. Spirit’s shares closed Friday at $32.87 a share, giving it a market capitalization of about $3.8 billion.
---- MORE: U.S. prosecutors plan to seek a guilty plea from Boeing over a charge tied to two fatal crashes of 737 Max planes, attorneys for the victims' family members said Sunday, blasting a potential agreement as a "sweetheart deal."
- The DOJ said in May that it was reviewing whether Boeing violated a 2021 settlement that protected Boeing from federal charges. The company agreed to pay a $2.5 billion penalty for a conspiracy charge tied to the 2018 and 2019 crashes of its best-selling 737 Max planes, which killed all 346 people on the two flights.
OIL!
- Breaking out
-- Concerns over supply issues due to Houthi rebels droning Suez Canal
--- Hurricane season hitting early - EARLIEST Cat4 on record happening now! -
- Churn and Burn - RAMP UP - Rotation (Renting Space)- Long Stretch with limited volatility- Short Interest at MULTI year lows- NVDA becomes worlds MVC for a minutePLUS we are now on Spotify and Amazon Music/Podcasts!Click HERE for Show Notes and LinksDHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.Love the Show? Then how about a Donation?Follow John C. Dvorak on TwitterFollow Andrew Horowitz on TwitterWarm Up- Summer Spin Cycle- New flow shifting to election- Banks - Fed's Stress Test Results (Wednesday)- Last week of month and quarter!Market Update- Churn and Burn - RAMP UP - Rotation (Renting Space)- Long Stretch with limited volatility- Short Interest at MULTI year lows- NVDA becomes worlds MVC for a minuteNext week is JULY 4th- Markets closing early (1PM) on Wednesday- Markets Closed on Thursday- Most people will take Friday off!Short Interest- Multi-Year low on S&P 500 and stocks- Hedge fund disclosures stopping some from shorting (after Meme stock craze)- Seems that no shorts helping to calm volatilityStock Market - Weird Facts- The S&P 500 has gone 377 days without a 2.05% sell-off. That's the longest stretch for the benchmark since the great financial crisis- The index hasn't experienced a gain of at least 2.15% in that time either- The Cboe Volatility Index (VIX) is considered by many investors as the de facto fear gauge on the Street. Last month, it hit its lowest level going back to November 2020. On Friday, it traded around 13, near historically low levels.- Complacency or Green-Light?Home Prices- Sales of previously owned homes are sitting at a 30-year low, and didn't move much in May as prices hit a new record and mortgage rates remain high.- Many reasons - but no place to go, high rates and high prices- IF more inventory comes on the market - possibly prices will come down (Last month inventories jumped 6.7%)- Median price of a home sold in May was $419,300More Homes- Sales of homes priced below $250,000 were lower than a year ago, while sales priced between $250,000 and $500,000 were up just 1%. Sales priced between $750,000 and $1 million were 13% higher, and sales priced over $1 million were up nearly 23%.- Cash is still king, accounting for 28% of sales.- First-time buyers are hanging in at 31% of sales, up from 28% the year before.MORE HOUSING- April S&P Case-Shiller Home Price Index 7.2% vs. 6.9% Briefing.com consensus; prior revised to 7.5% from 7.4%ERC Credit DENIED- The IRS will deny billions of dollars' worth of claims for a pandemic-era tax break while working to process lower-risk filings, the agency said on Thursday afternoon.- These are what you heard on commercials for a while...- After investigating more than 1 million claims worth roughly $86 billion, the IRS said in the release that it identified 10% to 20% of the highest-risk filings, and "tens of thousands" will be rejected in the coming weeks, according to the agency. Another 60% to 70% of claims with an "unacceptable level of risk" will be further examined, the IRS said.- During the ERC review period, the agency processed 28,000 claims received before September 2023 worth $2.2 billion and disallowed more than 14,000 claims worth $1 billion, according to the release.TESLA- Headcount reduction continues- 14% of workforce has been slashed this year-- The latest figure is not from precise payroll data, but from the number of people who are on Tesla's "everybody" email distribution list as of June 17- Bloomberg reporting that Telsa looming for 20% total headcount cut in 2023 to benefit profitability after company reached inefficiency levels of 25% -30%Musk - Need to know- How many children did Elon father?Banks- Fed Stress Tests on Wednesday (all should pass)- U.S. bank regulators said four major banks had shortcomings in their "...
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