DHUnplugged #617: MEME Stonks Part 2

Markets are getting a bit crazy to the upside now... Clearly the short squeeze gang is on the prowl.

Bifurcation - rates separating from inflation concerns.

Global economies are getting worse as higher costs are really crimping consumers. A hard look at what is happening around the world.

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Warm Up

- Biden had COVID again (How does that happen actually?)

- Market KRI +4 (3 days with cluster formation)

- A GIGANTIC walk-back by the Fed

- More earnings this week - winners and losers

- STONKS - Say it ... STONKS

Market Update

- JUMPIN' July - big finish|

- On not so great news... GDP -0.9% - back to back negative quarters.

- China looking bleak - could mean more stimulative measures?

- Hong Kong GDP shrank

- German manufacturing - you guessed it....

- Home prices in Australia - whooops...

----- Fed walking it back - sending out the DOVES to speak HAWKISH

Weird Chart - Odd Curve

Odd Chart

ABOVE - WHY?

- Expectations are that we are near or in a recession

- Further expectations that the Fed will raise then have to cut - sometime perhaps in 2023

- Bond being bought - Recession fears outweigh rate hike fears

- US still bringing in foreign money (safety play)

- NO CONFIDENCE IN ADMINISTRATION

Let's look at Global ECO

- Hong Kong's economy contracted 1.4% in the second quarter from the same period a year earlier, advance government data showed on Monday, as exports and investments remained sluggish, and COVID-19 weighed on a wide range of economic activity.

- Germany's manufacturing sector contracted in July for the first time in over two years, hurt by a deepening slump in new orders that darkens the outlook for Europe's largest economy

- - - S&P Global's final Purchasing Managers' Index (PMI) for manufacturing, which accounts for about a fifth of Germany's economy, fell to 49.3 from 52.0 in June

- Australian home prices slid for a third month in July and the pace quickened as Sydney suffered its worst decline in almost 40 years amid rising borrowing costs and a cost-of-living crisis. (Prices were still 8.0% higher for the year reflecting huge gains made over 2021 and early 2022.)

- China's factory activity contracted unexpectedly in July after bouncing back from COVID-19 lockdowns in the prior month, as fresh virus flare-ups and a darkening global outlook weighed on demand, an official survey showed.

- - - The official manufacturing purchasing managers' Index (PMI) stood at 49 in July, down from 50.2 in June, the National Bureau of Statistics (NBS) said on Sunday.

- Pakistan imports fell by more than a third in July after a ban on non-essentials, the finance minister said on Sunday, adding the improved trade situation will reduce pressure on the struggling rupee.

- - - July imports fell to $5 billion, down 35% from June's record monthly high of $7.7 billion

-- South Korea's consumer inflation sped up to a nearly 24-year high in July

Meanwhile - US Central Bank DOVE

- Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, said the Fed had more work to do in trying to control price increases.

- “I’m surprised by markets’ interpretation,” Mr. Kashkari said in an interview. “The committee is united in our determination to get inflation back down to 2 percent, and I think we’re going to continue to do what we need to do until we are convinced that inflation is well on its way back down to 2 percent — and we are a long way away from that.”

- ALSO: Cleveland Fed President Loretta Mester (voting FOMC member) says inflation is not going to come down quickly; she is seeing "little signs" of progress on inflation; says she must see convincing evidence...