DH Unplugged

DH Unplugged

By Andrew Horowitz and JC DvorakBusinessNewsInvestingBusiness NewsCareers
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DH Unplugged episodes

  • DHUnplugged #743: Is This The Plan?

    What goes up?

    Uncertainty – that word again!

    American Exceptionalism – the theme for 2025 that is fizzling out quickly.

    Back from India – Namaste….

    Psychological Indicators.

    PLUS we are now on Spotify and Amazon Music/Podcasts!

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     Warm-Up

    - What goes up?
    - Uncertainty - that word again!
    - American Exceptionalism - the theme for 2025 that is fizzling out quickly.
    - Back from India - Namaste....
    - Psychological Indicators

    Markets

    - Follow up - "They call it dumb money - ruling again" - how did that turn out?
    ---- Quantum stocks down 40-50% YTD
    - Billionaires - kissing the ring and getting rug pulled
    - TRILLIONS (4) lost in market cap - in the name of what again? (MAGA?) Make America God Awful?
    - Germany's stock market hits all-time high (even though economy is not doing well)
    - President Donald Trump marked his 50th day in office on Monday. So far, the stock market is off to its worst start since President Barack Obama's first term in 2009. (Have to go back to Nixon for the next "worst" start comparison)

    Monday Markets

    - Worst day for the Nasdaq since late 2022 (-4%)
    - Tesla plunged 15% - worst day on 5 years (Emperor Elon has new clothes?)

    Market Update (YTD)

    - NAS100 down 7%
    - SPY down 4.5%
    - SPY Equal Weight down 0.5%
    - ! Russell 100 Growth Down 10.5% , Russell 1000 Value up 1%
    - Cruise ships and Airlines - Down 20-30%
    - Emerging Markets UP 3.5%
    - European Stocks up 7%
    - China up 16%
    - Nat gas up 50%
    - WTI Crude - Down 7%|
    - 40% of the stocks in the S&P 500 are off 20% from their recent highs

    Down from the highs

    Smacked Stocks

    Is This the Plan?

    - Tariffs as negotiating chip?
    --- How Is that working?
    - Slashing Government employees and spending
    --- Is this the Twitter Plan of re-org?
    - Deregulation?
    - Tax Cuts?
    - Bitcoin Reserve (major disappointment?)
    --- Just the forfeited crypto from criminal or civil asset forfeiture proceedings.
    - US Sovereign Wealth Fund
    ---- Are they taking down markets to get better pricing to then prop up?
    - Rates are Down - but not for a good reason (10Yr @ 4.2%)
    - - Recession concerns are growing

    When will Fed step in to save the day?

    --- Fed has taken harder stance - but they don't have the backbone to stay out of it if markets cave

    Crypto Check

    - Not good
    - Bitcoin - big bump post election and then faded - back to exactly where it was pre-election
    - ETH - back to levels from Nov 2023

    How are the Big Boys doing this year?

    - Billionaire Index Top Movers....

    Billions and Billions

    Elon Update - TSLA

    - For seven straight weeks, since Elon Musk went to Washington, D.C. to join the Trump administration, shares in his automaker have declined, closing on Friday at $270.48. It's the longest such losing streak for Tesla in its 15 years as a public company.
    - Several Wall Street firms this week, including Bank of America, Baird and Goldman Sachs, cut their price targets on Tesla.
    - Elon was bemoaning how hard it was on him and companies right now....running them "with great difficulty"
    - President Trump said that in light of this "boycott" of Tesla by the public - he is going out to buy a new Tesla this morning as a sign of support.

    Quick AI Check - Tech Update

    - Oracle issued quarterly results on Monday that trailed analysts' estimates, but the company offered bullish comments on its cloud infrastructure segment.
    - Earnings per share: $1.47 adjusted vs. $1.49 expected
    - Revenue: $14.13 billion vs. $14.39 billion expected
    - Revenue increased 6% from $13.3 billion in the same period last year. Net income rose 22% to $2.94 billion, or $1.02 a share, from $2.4 billion, or 85 cents a share, a year earlier
    - Stock was up on this: "We are on schedule to double our data center capacity this calendar year," Oracle Chairman Larry Ellison said in a release. "Customer demand is at record levels."
    --- Update - could not hold in the regular session

    Treasury Secretary NOT helping

    - "Could we be seeing that this economy that we inherited starting to roll a bit? Sure. And look, there's going to be a natural adjustment as we move away from public spending to private spending,"
    - "The market and the economy have just become hooked. We've become addicted to this government spending, and there's going to be a detox period,"

    Jobs Jobs Jobs !

    - Job growth was weaker than expected in February as the Trump administration began to slash the federal workforce.
    - Nonfarm payrolls increased by a seasonally adjusted 151,000 on the month, better than the downwardly revised 125,000 in January but less than the 170,000 consensus forecast from Dow Jones
    - The unemployment rate edged higher to 4.1%.

    Going Private

    - Walgreens  !
    - Sycamore Partners that will take it off the public market for an equity value of around $10 billion.
    - VERY LITTLE premium....
    - FYI - Wags started in 1927
    - Stock down 70% in past 3-years

    Greenland still in play

    - During a speech to the joint session of Congress
    - Trump: "We strongly support your right to determine your own future, and if you choose, we welcome you into the United States of America," he said about halfway through his 90-minute speech.
    - Trump also pledged to Greenlanders that America would "keep you safe, we will make you rich, and together, we will take Greenland to heights like you have never thought possible before."

    Govy Shutdown?

    - Another item creating uncertainty and concern
    - Looks like a stop-gap will be voted on that would postpone a few weeks

    Airlines Stocks

    - Under pressure - Delta, American etc.
    - Guidance slashed as consumers pulling back
    - Southwest - charging for checked baggage

    Fear and Greed

    - Getting some signals that showing some of the recent correction may be

    Fear and Greed

    Just in....

    - 50% tariff on steel from Canada and the offer to make it the 51st state
    - What is the point here exactly?
    - Wait!!!!!!!!!!!!!!!! NO MORE STEEL TARIFFS ON CANADA

     

     

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    1 hr 2 min
  • DHUnplugged #742: Hot Openings

    Hot and cold openings – the best of 2024.

    A real hoot to listen to our antics and shenanigans over the past year or so.

    What food are they discussing or what hot stock may be on the list? All here on this Best-Of Show, produced by Ryan Rediske!

    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?

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    Love the Show? Then how about a Donation?

    The Winner for

    ORACLE (ORCL)

    Winners will be getting great stuff like the new DHUnplugged Shirt!

     

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    See this week’s stock picks HERE

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    1 hr 4 min
  • DHUnplugged #741: Dismantling

    CPI comes in HOT, PPI not as bad

    Retail sales – not a happy number for January

    News on GameStop

    DOGE is full attack mode (Dismantling)

    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?

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     Warm-Up

    - CPI comes in HOT, PPI not as bad
    - Retail sales - not a happy number for January
    - News on GameStop
    - - DOGE is full attack mode (Dismantling)
    - The Winner of the ORCL CTP

    Markets

    - The call it dumb money - ruling again
    - More earnings - driving markets
    - Buying holding tight - tariffs are not worrisome|
    - Intel parts up for grabs?

    Retail Sales

    - According to reports: Consumers sharply curtailed their spending in January, indicating a potential weakening in economic growth ahead, according to a Commerce Department report last Friday.
    - Retail sales slipped 0.9% for the month from an upwardly revised 0.7% gain in December, even worse than the Dow Jones estimate for a 0.2% decline. The sales totals are adjusted for seasonality but not inflation for a month in which prices rose 0.5%.
    - Excluding autos, prices fell 0.4%, also well off the consensus forecast for a 0.3% increase.
    - A "control" measure that strips out several nonessential categories and figures directly into calculations for gross domestic product fell 0.8% after an upwardly revised increase of 0.8%.

    Other Economics

    - In other economic news Friday, the Bureau of Labor Statistics reported that import prices accelerated 0.3% in January, in line with expectations for the largest one-month move since April 2024. On a year-over-year basis, import prices increased 1.9%.
    - Fuel prices increased 3.2% on the month, also the biggest gain since April 2024. Food, feed and beverage costs rose 0.2% following a 3% surge in December.
    - Export prices also increased, rising 1.3%.

    Back to Work

    - President Trump was very vocal about people who work from home. Said they they are really not working
    - “I happen to be a believer that you have to go to work. I don’t think you can work from home.
    - “Nobody’s going to work from home, they’re going to be going out, they’re gonna play tennis, they’re gonna play golf. They’re gonna do a lot of things—they’re not working.”
    --- Question: Doesn't President Trump work from home?
    -----JPMorgan Chase CEO Jamie Dimon scorned calls from some employees to soften the bank's five-day return-to-office policy in an animated town hall meeting last week, according to a recording reviewed by Reuters.
    - Employees at the largest U.S. bank have complained on internal message boards and chats about losing hybrid working arrangements, and one group launched an online petition urging Dimon to reconsider.

    Unions - NOPE

    - Amazon workers at a facility near Raleigh, North Carolina, overwhelmingly voted against unionizing on Saturday.
    - Of the 3,276 ballots cast, there were 2,447 votes opposing the union and 829 in favor, according to Carolina Amazonians United for Solidarity and Empowerment (CAUSE), the group seeking to represent workers. The results still need to be certified by the National Labor Relations Board.
    China - Tariffs of their own
    - China's finance ministry said Tuesday it will impose 15% tariffs on coal and liquified natural gas imports from the U.S. and 10% duties on crude oil, farm equipment and certain cars, starting Feb. 10.
    - The tariffs announcement comes as the additional 10% U.S. tariffs on Chinese exports came into effect on Tuesday stateside.

    Speaking of Tariffs

    Reciprocal Tariffs - what are they? . Essentially, it's a "tit-for-tat" approach to trade: if Country A charges a 10% tariff on goods from Country B, then Country B will impose a 10% tariff on goods from Country A
    - President Trump recently signed a memorandum directing his administration to impose reciprocal tariffs on U.S. trading partners. This means the U.S. will levy tariffs on imports from countries that have higher tariffs on American goods. The goal is to create a "level playing field" and address trade imbalances.
    - Wouldn't it be better of all removed tariffs rather than trying to one-up all the time?

    In Response

    - Chinese President Xi Jinping delivered a speech at a symposium with prominent entrepreneurs on Monday, according to state media Xinhua, signaling a shift toward renewed support for the private sector.
    - The meeting sends a "very clear signal of top-level support" to the private sector entrepreneurs
    - The meeting could mark "a symbolic turning point for Chinese tech sector after years of heightened scrutiny," said Lynn Song, chief economist at LNG, emphasizing the timing of this meeting underscored Beijing's urgency to cheer up the private sector amid economic malaise and external tariff risks.

    Musk and DOGE

    - Aides to Elon Musk charged with running the U.S. government human resources agency have locked career civil servants out of computer systems that contain the personal data of millions of federal employees, according to two agency officals.
    -"We have no visibility into what they are doing with the computer and data systems," one of the officials said. "That is creating great concern. There is no oversight. It creates real cybersecurity and hacking implications."
    - The government efficiency team have been given access to the U.S. Treasury Department’s payment system
    - - The system sends out more than $6 trillion per year in payments on behalf of federal agencies and contains the personal information of millions of Americans who receive Social Security payments, tax refunds and other monies from the government.
    - AND, when there is pushback......Elon Musk has called to impeach a federal judge in New York, Paul Engelmayer, over an order that temporarily restricts the tech centi-billionaire and his DOGE team from accessing U.S. Department of Treasury payment systems and sensitive data.

    Intel

    - Intel's rivals Taiwan Semiconductor Manufacturing Co. and Broadcom are each eyeing potential deals that would break the U.S. chipmaking icon in two, the Wall Street Journal reported on Saturday, citing people familiar with the matter.

    ONWARD!

    - Impressive earnings:
    - Luxury carmaker Ferrari on Tuesday reported a significant upswing in full-year net profit, citing a strong product mix and growing demand for personalization.
    - Ferrari posted net profit of 1.53 billion euros ($1.58 billion) for the full-year 2024 period, reflecting a 21% increase from the previous year.

    Coinbase Earnings

    - Coinbase Thursday reported better-than-expected fourth-quarter results and its biggest quarterly revenue in three years, strengthened by a raging postelection rally that pushed crypto prices to new high after new high at the end of last year. (Earnings per share: $4.68 vs. $1.81 expected, Revenue: $2.27 billion vs. $1.88 billion expected)
    - Total trading volume was $439 billion, up 185% year-over-year. Consumer trading volume rose 224% from the same period a year ago while institutional trading volume increased 176%.
    Airbnb
    - The online rental platform posted earnings of 73 cents per share on $2.48 billion in revenue. That topped analyst estimates of 58 cents per share of earnings and $2.42 billion in revenue, according to LSEG.
    - Revenue increased 12% from a year ago.
    - Shares up 14% on the dy (best one day performance for the stock EVER!)

    CVS

    - The company issued a full-year 2025 adjusted earnings outlook of $5.75 to $6 per share, which was in line with Wall Street's expectations.
    -- But CVS did not provide a revenue forecast for the year.
    - Earnings per share: $1.19 per share adjusted vs. 93 cents per share expected
    - Revenue: $97.71 billion vs. $97.19 billion expected
    - Still a big concern moving forward as company relies heavily on Medicare/Medicare Advantage - could see some price negotiations by the government

    OOOH - This is amazing! (NOT)

    - Last week, video game retailer turned meme stock GameStop is considering investing in bitcoin and other cryptocurrencies.
    - GameStop is exploring investments in alternative asset classes, including crypto and in particular bitcoin, three sources said. Shares of GameStop soared as much as 20% in extended trading following the news.
    - Comments show that they are reviving this from their 2022 playbook (that they did not follow through on)

    Zelle for the WIN!

    - Zelle is it safe? (What movie is that from?)
    - The firm said Wednesday that its user base jumped 12% to 151 million accounts in 2024, and that the total dollars sent on the platform jumped 27% from the year earlier.
    - Growth is being driven as bank customers increasingly use Zelle instead of cash or checks, and as small businesses adopt the payment option.

    Thoughts on This?

    - President Donald Trump is set Monday to sign an executive order directing the Department of Justice to pause enforcing a law that prohibits American companies to bribe officials of foreign governments.
    - The pause will be implemented to examine whether the law puts U.S. businesses at an economic disadvantage to foreign competitors.
    - The Bloomberg news service first reported the planned executive order related to the Foreign Corrupt Practice Act.

    What Do We Make of This?

    - ARM has begun recruiting from its own customers and competing against them for deals as it pushes toward selling its own chips, according to people familiar with the matter and a document viewed by Reuters.
    - The UK-based company has sought to recruit executives from licensees, two sources familiar with the matter told Reuters. And Arm is competing against Qualcomm, one of its largest customers, to sell data center CPUs to Meta Platforms
    - Accorind to reports: The tech provider's moves to build out its own chip business could upend an industry that has long viewed the company as a neutral player rather than a competitor, by forcing companies who rely on Arm technology to consider whether they will end up competing against the firm for business.

     

     

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    1 hr 2 min
  • DHUnplugged #740: President Miyagi

    Wax off Wax On – Waffling – Mr. Miyagi President?

    Government Cuts – Lots of Bye-Bye Notes.

    Economics and the latest employment report.

    PLUS we are now on Spotify and Amazon Music/Podcasts!

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    Warm-Up

    - Wax off Wax On - Waffling - Mr. Miyagi President?
    - Government Cuts - Lots of Bye-Bye Notes
    - Economics are in.... People happy and not happy
    - Musk - let's talk about this ....
    - Praying for the turtles...

    Markets

    - Lots of Tumult  - confusion but still a retail bid
    - Inflation numbers are not worrying (to some)
    - Employment Report
    - CPI Due this week
    - Tariffs on Steel and Aluminum

    The Karate Kid: Danielson - Wax On Wax off

    - Trump 2.0: President Miyagi: tariffs on, tariffs off (used to be called waffling)
    - Mexico and Canada Tarrifs are postponed for a month after "phone calls" from Trudeau and Sheinbaum
    - China 10% tariffs and now China retaliates
    --- Supposedly there is a call set up between Trump and XI in the next few days

    Economics

    - ADP: Private sector companies added more jobs than expected in January
    -- Companies created a net 183,000 jobs on the month, slightly more than the 176,000 in December
    ---Pay for workers who stayed in their jobs grew at a 4.7% annual rate
    - BLS Payrolls: 143k Added,  (shy of estimates)
    ---- URate 4%
    ----Avg Hourly Earnings kick up to 0.5% MoM
    - - - UMICH for Feb -  67.8 (DOWN from 70.1
    - ISM Serices 52.8, down slightly from prior month

    Color on Confidence numbers

    - Lots of concern over the potential for inflation in the UMich report
    --- Biggest issue is the worry about the tariffs and how they may impact prices

    Earnings:

    - The S&P 500 is reporting a 13.2% year-over-year earnings growth rate for Q4 2024, which is the highest growth rate reported in three years
    - 77% of S&P 500 companies have reported earnings above estimates, which is equal to the 5-year average but above the 10-year average
    - The Financials, Communication Services, Information Technology, Consumer Discretionary, and Utilities sectors are reporting double-digit earnings growth
    - Starting to seeing some issues in the BIG tech sector - that is why all of a sudden we are also seeing layoffs - expense cutting (although no cuts to cap ex at this point)

    Earnings

    - Amazon prelim Q4 $1.86 vs $1.49 FactSet Consensus; revs $187.79 mln vs $187.31 bln FactSet Consensus
    - AWS segment sales rose 18.9% yr/yr to $28.79 bln
    - Q4 operating income of $21.2 bln vs prior guidance of $16-20 bln; guides to Q1 operating income of $14-18 bln
    - Amazon sees Q1 revs $151.0-155.5 bln vs $158.56 bln FactSet Consensus
    ----Amazon expects $100 billion of capex in 2025 on 'once-in-a-lifetime' AI opportunity

    More Earnings

    - Alphabet shares fell more than 9% in after-hours trading Tuesday after the company reported fourth-quarter results that missed on revenue expectations and announced more artificial intelligence investments.
    - Earnings per share for the Google parent company beat analysts' estimates by two cents.
    - Revenue: $96.47 billion vs. $96.56 billion expected by LSEG
    - Earnings per share: $2.15 vs. $2.13 expected by LSEG

    Even More Earnings

    - Advanced Micro Devices reported fourth-quarter results on Tuesday that beat Wall Street expectations for sales and earnings, but the stock fell about 5% in extended trading as the company missed estimates in its key data center segment.
    - Stock kept of falling in the days after too...
    - Earnings per share: $1.09, adjusted, versus $1.08 expected
    - Revenue: $7.66 billion versus $7.53 billion
    --- Clearly this company was way ahead of itself and proposing that they had AI chips that were potentially competitive to NVDA - BUT NOT!

    Spotify

    - Stock moved up nicely last week after a really good earnings report
    - Shares climbed 10% Tuesday after the music streaming company recorded its first full year of profitability
    - Revenue: 4.24 billion euros vs. 4.19 billion euros expected by LSEG
    - Earnings per share: 1.76 euros vs.1.99 euros expected from LSEG
    - MAUs (monthly active users): 675 million vs. 664.3 million expected by StreetAccount
    - The Luxembourg-based company reported a 40% growth year-over-year for gross profit, rising 10% from the previous quarter. Operating income came in at 477 million euros, slightly below guidance.
    - $189 back in the start of 2024 - Now.... Over $600

    Mo' Money Spend

    - Softbank now investing upwards of $40B into OpenAI - now worth $300B
    -- Remember, you keep adding money and your money from initial adds is worth more...

    Postal Service Suspended

    -  USPS announced last week that it would stop accepting parcels from China and Hong Kong, until futher notice.
    ---- That smacked companies in China that do bug retail here in US (PDD, TEMU etc)
    - The U.S. Postal Service said Wednesday it will resume accepting inbound mail and packages from China and Hong Kong, just hours after it suspended service from those regions.
    - "The USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery," the agency wrote in a notice posted to its website.

    Sovereign Wealth Fund?

    - A sovereign wealth fund (SWF) is a state-owned investment fund that manages a country's financial assets
    - These funds are typically derived from surplus revenues from commodity exports (like oil and gas), foreign exchange reserves, or budget surpluses
    - The United States is considering establishing its own SWF. President Trump signed an executive order directing the Treasury and Commerce departments to develop a plan for creating such a fund.
    - The proposed U.S. SWF aims to promote fiscal sustainability, lessen the tax burden on American families and small businesses, and establish economic security for future generations
    - AND they are talking about somehow doing a strategic reserve of Bitcoin.... WTF?

    Speaking of Bitcoin

    - BIG NEWS - Microstrategy is changing its name to .... Strategy

    US Steel Saga

    - Seems tht there is little hope of Nippon Steel buying US Steel
    - HOWEVER, Nippon Steel is going to invest "heavily" in US Steel now.... (WHY - hopes that one day this will get them control of the company and another administration will then allow the purchase for good behavior?)
    - MORE:  U.S. President Donald Trump on Sunday told reporters that he planned to announce new 25% tariffs on Monday, targeting imports of steel and aluminum.
    - - The proposed levies would be in addition to existing duties. No timeline for implementation was specified at this time.

    Bil Ackman - Not Quiet anymore

    - Pershing Square’s Bill Ackman revealed Friday that he has built a significant stake in Uber, saying the stock is still trading at a “massive” discount.
    - In a post on X, the hedge fund manager said his fund began buying Uber shares in early January and has amassed 30.3 million shares, worth $2.3 billion based on the stock’s current level around $75 per share.
    - “We believe that Uber is one of the best managed and highest quality businesses in the world,” Ackman said in the post. “Remarkably, it can still be purchased at a massive discount to its intrinsic value. This favorable combination of attributes is extremely rare, particularly for a large cap company.”

    Of interest...

    - A blind man is raising concerns about Indiana gun laws after he was allowed to get a license to carry a handgun.
    - Terry Sutherland told I-Team 8 he got his permit to prove a point and to try to spark conversations about reasonable gun legislation.
    - Sutherland was using his sight seeing stick when he went to the City County Building to get fingerprinted for the permit.
    - He said he spoke with several people who knew that he was blind.

    Fun Real Estate Investing

    - President Donald Trump on Tuesday evening said the United States "will take over the Gaza Strip," and "we'll own it."
    - Trump said that all Palestinians currently living in Gaza — nearly 2 million people — should leave the territory and be placed in other countries in the Middle East, among them Jordan and Egypt.
    - He said the U.S. could then re-develop Gaza, which has been decimated during a war with Israel.

    Save the Turtles

    - In a recent post on the social media platform Truth Social, President Trump stated he will be signing an executive order to end "the ridiculous Biden push for Paper Straws."

    Not EggCiting

    - The Waffle House restaurant chain is putting a 50 cent per egg surcharge in place temporarily due to the biggest bird flu outbreak in a decade.
    - The average price per dozen eggs nationwide hit $4.15 in December. That's not quite as high as the $4.82 record set two years ago, but the Agriculture Department predicts egg prices are going to soar another 20% this year.

    In Closing

    - Consumer Financial Protection Bureau employees were told Sunday to work remotely because their Washington, D.C., headquarters would be closed through Feb. 14, according to a memo obtained by CNBC.
    - The memo, from CFPB Chief Operating Officer Adam Martinez, follows an email sent Saturday from newly installed acting CFPB director Russell Vought which instructed staff to suspend nearly all activities of the regulator, including supervising financial firms.
    - The Trump administration has ordered the Consumer Financial Protection Bureau to stop nearly all its work, effectively shutting down an agency that was created to protect consumers after the 2008 financial crisis and subprime mortgage-lending scandal.
    - Russell Vought, the newly installed director of the Office of Management and Budget, directed the CFPB, in a Saturday night email confirmed by The Associated Press, to stop work on proposed rules, to suspend the effective dates on any rules that were finalized but not yet effective, and to stop investigative work and not begin any new investigations. The agency has been a target of conservatives since President Barack Obama pushed to include it in the 2010 financial reform legislation that followed the 2007-2008 financial

     

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    1 hr 6 min
  • DHUnplugged #739: Global Upheaval (JK)

    January is in the books – interesting outcome.

    Let’s work at Costco – wow!

    Fed is out with their rate plan – not confident in the future

    Fed Workers getting buyouts

    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?

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    Warm-Up

    - January is in the books - interesting outcome
    - Let's work at Costco - wow!
    - Fed is out with their rate plan - not confident in the future
    - Fed Workers getting buyouts
    - The latest from the Just Kidding department...

    Markets

    - Investors Betting Trump will soften his stance on Tariffs
    - Trump playing chicken on weekends that other countries will bend
    - Some recovery after last Monday's beating
    - But the questions is - how long until global upheaval with all of these threats and bashing?

    Tariffs - Threats to Canada and Mexico

    - 25% across the board on Canada and Mexico
    - 10% in China
    - Blaming immigration, drugs and trade imbalance
    --- Oil could become an issue with Canada as they send us cheaper (dirty crude) - but several regions could see higher prices by 20% if these tariffs stick
    - After the close - Trump said at the White House Friday he would 'absolutely' put tariffs on the nation's EU allies.
    - 'You want the truthful answer or should I give you a political answer?' Trump said when asked about it – underlying his commitment to the issue. He said the tariffs on the EU would be 'very substantial,' without providing details.
    - Markets closed in the red Friday on this tidbit
    -------- Follow up - futures and markets off considerably before the open on Monday. 2%+ across the board. Oil UP.
    -------THEN - A PHONE CALL WITH MEXICO! PAUSE ON RATES FOR A MONTH (10am news)

    Bitcoin <$97,000 over the weekend, then popped back up

    -- Again is this supposed to be a alt asset class or it is simply a risk asset now?

    Musk has the keys

    - The Trump administration has approved plans to grant Treasury officials affiliated with Elon Musk’s team access to the federal system that handles trillions of dollars in payments, according to two people familiar with the situation.
    - Senator Warren is apoplectic

    Tesla also not thrilled

    - CFO "Over the years we've tried to localize our supply chain in every market, but we are still reliant on parts from across the world for all our businesses," Taneja said. He said the "imposition of tariffs" would "have an impact on our business and profitability."
    --- Oh and Tesla's earnings were uninspiring. Big drop in sales and profitability
    ---- HOWEVER - Musk and team promised that a cheaper car will be coming this year and that left the carrot dangling for investors

    General market update for January - Internal notes

    - The U.S. markets finished the month on a downturn as news of upcoming tariffs triggered renewed market concerns. January proved to be a volatile month, marked by a record-high closing for the S&P 500®, followed by a steep decline after the release of a new AI model from China caused global turbulence. Despite this, robust earnings reports and strong consumer spending helped the S&P 500 end the month with a 3% gain.
    - Mid-cap and small-cap stocks outshone their larger counterparts, with the S&P MidCap 400® and S&P SmallCap 600® rising 4% and 3%, respectively. Investors remained cautious due to ongoing uncertainties about Federal Reserve rate cuts and inflation.
    - Most sectors saw gains in January, with Communication Services, Health Care, and Financials leading the charge. Information Technology was the sole underperformer, declining 3% due to AI-related challenges.
    - In January, most sectors experienced gains, with Communication Services, Health Care, and Financials at the forefront. The only sector to underperform was Information Technology, which declined by 3% due to challenges related to artificial intelligence.
    - International stocks outshone their US counterparts, with notable performances from Latin America and Europe. Additionally, value stocks outpaced growth stocks, aligning well with our client positioning strategy.

    DONATIONS - VERY POOR START TO THE YEAR

    Costco - Why Isn't everyone working there?

    - Retailer Costco Wholesale will increase pay for most of its hourly U.S. store workers to more than $30, according to a memo sent to employees this week.
    - The company will increase hourly pay for its top of the scale employees over the next three years, with the pay rising by $1 to $30.20 in the first year and an extra $1 each in the subsequent two years
    - THAT IS MORE THAN $60,000 per year!

    Earnings

    - Microsoft’s results for the fiscal second quarter exceeded Wall Street consensus, but revenue guidance for the current quarter did not.
    - The Azure cloud business is dealing with execution challenges and ongoing supply shortages.
    - But Microsoft touted the growth of its artificial intelligence business, which is doing $13 billion in annualized revenue.
    - Earnings per share: $3.23 vs. $3.11 expected
    - Revenue: $69.63 billion vs. $68.78 billion expected
    - Stock was down 5% on the news...

    Intel

    - Intel issued disappointing quarterly guidance on Thursday, but reported earnings and revenue that topped estimates.
    ----- Here's how the company did in the fourth quarter compared with LSEG estimates:
    - Earnings per share: 13 cents adjusted vs. 12 cents expected
    - Revenue: $14.26 billion vs. $13.81 billion expected
    - Shares at the lowest point in price in the range from July 2024 - not looking any better

    Apple Earnings

    - China sales dropped 11% on an annual basis
    - 1/2 the decline was due to inventory issues
    - It was the worst quarter by growth rate since the December quarter a year ago, and marks the sixth straight quarter of declines in Apple’s third-largest region by revenue.
    - Cook tried to make up for the poor performance of the company overall by pointing to stimulus that could benefit Apple's products
    - Also blaming that Apple Intelligence is absent in China (I am still wondering what this does)
    ---- Isn't he forgetting that Apple can be used as a leverage point by China in the impending trade war?

    Boeing Earnings

    - Boeing posted a nearly $4 billion loss for the fourth quarter.
    - The company has taken charges that span its defense and commercial airplane units.
    - CEO Kelly Ortberg said Boeing is making progress on stabilizing the manufacturer.

    Looking back - on the DeepSeek (CheapSeek) news

    - Stocks took a beating last Monday - NVDA and other chip players, Nuclear Energy and tech in general
    - Now, as expected, there is a twist to the story - the narrative machine is hard at work
    ---- Suspicion that the stole LLMs and other tech from possibly APIs and then built on top of that
    ------ Could it be that it is a Chinese spy! (Navy banned use on its vessels)
    -- Even is dangerous - China’s DeepSeek AI is full of misinformation and can be tricked into generating bomb instructions, researchers warn
    ---- Some stocks made a nice comeback - SMR and other energy plays - NVDA still suffering. (down ~ 20% from high and now under its 200 DMA)

    Something we have been waiting for

    - The Food and Drug Administration on Thursday approved Vertex Pharmaceuticals' non-opioid painkiller pill, a new alternative for pain relief that comes without the risk of addiction.
    - Vertex is now the first drugmaker in decades to gain U.S. approval for a new type of pain medicine.
    - Vertex's drug is specifically approved for the treatment of moderate-to-severe acute pain, which is usually caused by injury, surgery, illness, trauma or painful medical procedures and likely eases with time.
    -- VRTX moved up nicely after this news
    - TAM > 80 million patients in USA ($1 billion in annual sales potential)

    Thank you - Goodbye

    - The Trump administration is offering millions of federal workers the option to accept buyouts through a government-wide "deferred resignation" program if they resign by Feb. 6.
    - Those who accept the offer will receive pay and benefits through Sept. 30, according to a draft email obtained Tuesday by NBC News.
    - The emails will be started to be sent today, NBC reported.
    - The White House expects up to 10% of federal employees to take the buyout, a senior administration official told NBC on condition of anonymity.
    - Doesn't this leave holes?

    The Fed

    - The Federal Reserve held its key interest rate in check Wednesday, reversing a recent trend of easing policy as it examines what is likely to be a bumpy political and economic landscape ahead.
    - "The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid," the new language read. "Inflation remains somewhat elevated."
    - Seemed much less confident about their view on the trajectory about inflation
    ---NOTE - On next Week's TDI Podcast - Fed Insider Danielle Dimartino Booth with be the guest!

    Pickleball!

    - Major League Pickleball is on the brink of profitability and is now looking to expand, a league source tells CNBC.
    - The MLP, which started in 2021, is targeting profitability at the league level by the fourth quarter of this year, according to the source, who spoke on the condition of anonymity to discuss nonpublic matters.
    - For the first time in two years, the league is offering investors the opportunity to get in on America's fastest-growing sport with the sale of up to two expansion franchises, the source said.

     

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    1 hr 3 min
  • DHUnplugged #738: Thread Pull DeepSh*t

    The Impact of Flagrant Braggadociousness

    Hard rug pull?

    Tariffs – giving out like candy

    TikTok Saga continues – with a twist

    PLUS we are now on Spotify and Amazon Music/Podcasts!

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    Warm-Up

    - The Impact of Flagrant Braggadociousness
    - Hard rug pull?
    - Tariffs - giving out like candy
    - TikTok Saga continues - with a twist

    Markets

    - Deflating Stocks - Thread Pull (Before the rug pull)
    - Monday Mayhem - S&P 500 down 1.9%, Equal Weighted down 0.35% - DEEPSeek
    - Tuesday - plenty of buyers stepping in ....
    - Staples, Banks are in favor all of a sudden...

    ANNOUNCING a New CTP!

    $600 Billion Lost Monday - for one company! BIGGEST one day drop ever!

    Monday Markets

    - News of a cheap AI model (program/app) from China hit the tape and it pulled the loose string and tech / markets felll apart.
    - DeepSeek, has more downloads that ChatCPT
    - DeepSeek's latest app comes just days after Mr. Trump announced a new $500 billion venture with ChatGPT maker OpenAI, Softbank and Oracle, dubbed Stargate, which he touted as ensuring "the future of technology" in the U.S. (Which is higher than anyone could calulate as the actual value- more like $60-$80 billion)
    - ORCL -13%, NVDA -17%, AMD -7%, ASML - 8%. Nuke power companies getting squashed - NASDAQ 100 down 3.2%
    - DeepSeek is also catching investors off guard because of the low development costs for its AI app, which Wedbush Securities analyst Dan Ives pegged at only $6 million. By comparison, OpenAI, Google and other major U.S. companies are on track to invest a total of roughly $1 trillion in AI over the coming years, according to Goldman Sachs.
    - FWIW - DeepSeek excels in technical tasks like coding and reasoning, while ChatGPT is better for creative writing and conversational tasks
    - Founder Liang, who had previously focused on applying AI to investing, had bought a "stockpile of Nvidia A100 chips," a type of tech that is now banned from export to China. Those chips became the basis of DeepSeek, an MIT publication reported.
    - DeepSeek is looking to differentiate from its competitors with its reasoning capabilities, meaning that before delivering the final answer, the model first generates a “chain of thought” to enhance the accuracy of its responses.
    - Question: Will this shed reality on the AI bubble or just a bump in the road?
    ---- Lesson: As an investor, be careful of the current administration's hype - we saw this last time and many of the "deals" never got done fully or at all.
    ---- In addition, DJIA was flying high as staples and other ramping. HD, CRM, JNJ
    - 10Yr Yield drops to 4.52%

    Hard Rug Pull

    - Hard rug pull: The developers have no intention of completing the project and plan to scam investors from the start

    In the End...

    - The narrative with switch... Was:  How great all of this as capital spend is going to be great!
    - Will morph to: No need for capital spend therefore companies will have the benefit of not spending the money!
    - The usual Wall Street Machine
    --- Update: That has already started in the background. The idea that this is great as there is more competition AND a layer has been built that can support faster and cheaper build out of this AI .....

    One More Thing

    - Wang (CEO of ScaleAI) said DeepSeek actually has more H100 chips from Nvidia than expected — about 50,000 of them.
    - At $25,000 a piece that is $1.25 billion. Sooooooo how is it that it took only $6 million to build..

    Big Cuts

    - The Trump administration is offering millions of federal workers the option to accept buyouts through a government-wide "deferred resignation" program if they resign by Feb. 6.
    - Those who accept the offer will receive pay and benefits through Sept. 30, according to a draft email obtained Tuesday by NBC News.

    Colombia - Tariff Test

    - President Donald Trump's newly announced tariffs on goods from Colombia could drive up the price of some items Americans buy every day.
    - Trump said in a social media post Sunday that he would immediately impose a blanket 25% tariff on all goods coming into the U.S. from Colombia, among other sanctions. The announcement came after Colombia rebuffed a U.S. military flight of deported migrants.
    - Trump also said that the tariffs would soar to 50% in a week.
    ---- Colombia yileds, takes in the migrants - coffee drinkers should rejoice!

    Thought Moment

    - Will some countries look at these "Negotiating tariffs" as ways to negotiate?
    - Less fear - as now they know as it has been telegraphed that they are only really for negotiating?

    TikTok Saga

    - Perplexity AI on Sunday revised the merger proposal it had submitted to TikTok parent ByteDance.
    - The proposal, which would create a new entity combining Perplexity and TikTok U.S., would now also allow for the U.S. government to own up to 50% of the new company upon a future IPO, CNBC has learned.
    - All of a sudden we are going to have state-owned enterprises. (WTF?)

    Change of Tune

    - Clearly this is all political at this point
    - The CIA has shifted its stance about the origin of the virus that causes Covid-19, NBC News reported on Saturday.
    - The intelligence agency now believes that the coronavirus escaped from a Chinese lab, a shift from its previous stance, in which it did not take a position.
    - "CIA assesses with low confidence that a research-related origin of the COVID-19 pandemic is more likely than a natural origin based on the available body of reporting,"

    Diet Drugs - Still Good

    - Shares of Novo Nordisk jumped Friday after the Danish pharmaceutical giant reported positive early-stage results for its once weekly amycretin obesity drug.
    - The trial showed average weight reduction of 22% in obese and overweight patients after 36 weeks.
    - The study was conducted on 125 overweight or obese patients and the most common side effects were gastrointestinal.
    - Amycretin targets the same gut hormone that Wegovy mimics, known as GLP-1, as well as a pancreas hormone called amylin that affects hunger.
    - Sooooo, how is this different?
    -- NOW - The Food and Drug Administration approved Novo Nordisk’s Ozempic for patients with both chronic kidney disease and diabetes, expanding the use of the wildly popular injection in the U.S.
    - What next? Help for hair growth or make you taller....

    Airline - Not So High Flying

    - Insta-thought - Airlines are doing better because of weight loss medicine - people are lighter so less fuel used for flights
    - Earnings: The carrier forecast an adjusted loss per share of 20 cents to 40 cents for the first three months of 2025 based on current demand trends and fuel-price forecast, a wider loss than the 4 cents analysts were expecting, according to LSEG.

    Tech Earnings

    - Starts this week with Microsoft, IBM, META, Intel and a few others.
    - The week after it will pick up pretty good.

    Politics This Week

    - A Republican House member introduced a resolution Thursday to amend the U.S. Constitution in order to allow President Donald Trump — and any other future president — to be elected to a third term in the White House.
    - Trump "has proven himself to be the only figure in modern history capable of reversing our nation's decay and restoring America to greatness, and he must be given the time necessary to accomplish that goal," said Rep. Andy Ogles, the Tennessee lawmaker who introduced the resolution.
    - Remind everyone again about what it takes to do a constitutional amendment????
    - Trump signs executive order to unclassified files for MLK, JFK, RJK.

    Around the World

    - South Korea's economy expanded 1.2% year on year in the fourth quarter, marking its slowest expansion since the second quarter of 2023.
    - Advance figures showed the figure missed the 1.4% expansion expected by economists polled by Reuters, and the growth was also softer compared with the 1.5% rise seen in the third quarter of 2024.

    Football?

    - Congrats to Kansas City and Philadelphia
    - Who are our favorites?
    - KC is 1.5 point favorite
    - Will Kelce propose to Swift if the win? (Will he have to sign pre-nup?)

    IF interested:

    - Beyoncé (US$760 million) ...
    - Dr. Dre (US$800 million) ...
    - Madonna (US$850 million) ...
    - Bruce Springsteen (US$1.2 Billion) ...
    - Selena Gomez (US$1.3 Billion) ...
    - Rihanna (US$1.4 Billion) ...
    - Taylor Swift (US$1.6 Billion) ...
    - Jay-Z (US$2.5 Billion)

    Crypto

    - Bitcoin was below $100k on Monday as risk assets were not in favor
    - All other coins also drop...

    Egg Prices - ALERT

    - High in Jan 2023 - $4.23
    - Dropped to $2.06 in September 2023
    - Current is $4.14

     

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    1 hr 3 min
  • DHUnplugged #737: Spirited Animals

    Trump-o-Nomics here we come.

    MemeCoins making s comeback – then fizzling.

    Pardons and Executive orders are flying.

    PLUS we are now on Spotify and Amazon Music/Podcasts!

    Click HERE for Show Notes and Links

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     *** California Clean up - Some thoughts and companies... ****

    Warm-Up

    - New President - New Leadership
    - Pardons flying....Even preemptive ones
    - Another short-seller is out of biz...
    - Talking bout animal spirits being unlocked as President Trump take office

    Markets

    - Coins - on fire (then pull back)
    - Markets - Moving after last week's CPI print
    - MemeCoins making a comeback
    - Pelosi moving stocks

    ** Need a new symbol for the 1st CTP for 2025

    PSA - Quick note - Next week's guest on TDI Podcast - Howard Lindzon - Founder of StockTwits

    - Follow JCD and AH on Twitter
    - Listen to No Agenda every week - double the pleasure on Thursdays and Sundays at 2P (ET)

    Inauguration

    - Any major takeaways?
    - Trump wearing a purple tie - that does not seem like an accident
    - Significant number of executive orders
    First orders of business--- Energy is key area along with DEI, TWO Genders (only), Temporary pause on China tariffs, National emergency at borders, ending EV mandates
    - National emergency: Borger, energy
    - "That national energy emergency will unlock a variety of different authorities that will enable our nation to quickly build again, to produce more natural resources, to create jobs, to create prosperity and to strengthen our nation's national security"
    - Opening up Alaska: "Alaska is so key for our national security, given its geostrategic location, and it's a crucial place from which we could export LNG not only to other parts of the United States, but to our friends and allies in the Asia Pacific region"
    - DEI -could now be DOA
    - Withdrawing from Paris clime agreement
    - - - The incoming administration plans to review and potentially end what the official described as "discriminatory programs," including environmental justice grants and diversity training initiatives.
    --- Retaking Panama Canal and plant a flag on Mars
    -- Do we want to discuss that President Trump did not put his hand on the bible as he was being sworn in?
    ----EXTERNAL REVENUE SERVICE: For this purpose, we are establishing the external revenue service to collect all tariffs, duties and revenues. It will be massive amounts of money pouring into our treasury coming from foreign sources, the American dream will soon be back and thriving like never before to restore competence and effectiveness to our federal government
    - Vivek Ramaswamy is out as Elon Musk’s co-leader as he is running for Governor of Ohio

    Pre-Emtiove Pardons

    - President Joe Biden on Monday issued preemptive pardons for several family members, citing concerns that they will be targeted by “baseless and politically motivated investigations.”
    - Biden pardoned his brother, James Biden; James’ wife, Sara Jones Biden; his younger sister, Valerie Biden Owens; Owens’ husband, John Owens; and his other brother, Francis Biden.
    - “The issuance of these pardons should not be mistaken as an acknowledgment that they engaged in any wrongdoing, nor should acceptance be misconstrued as an admission of guilt for any offense,” Biden said in a press release.
    --- AND January 6th "Hostages" pardoned

    Tariffs

    - Seems that the squeeze is on - 25% on Mexico (MexAmerica) and Canada (CanAmerica) starting Feb 1st.
    - HOT FLASH - 10% on China starting Feb 1

    Musk - Feelings hurt?

    - Removing of EV mandates - not in his best interest.. Right?
    - Could it be a swap for more lucrative defense and space contracts?

    TikTok

    - Goes dark for a little while over he weekend (Apple, Google remove app and offline on web)
    - Several players are interested in buying the US assets
    - Kevin O'Leary, Elon Musk
    --- Latest to throw their hat in the ring - Perplexity AI- merger
    --- Perplexity is backed by Amazon/Bezos (amongst others)
    -- Trump wants to try to give them more time to work things out.... (TikTik CEO attended Inaugural ball)

    Netflix - POW! (Disclosure- H&C Clients own NFLX)

    - Q4 global streaming paid net adds were +18.91 mln vs prior guidance of "higher than Q3's +5.07 mln." Co notes Q4 was the biggest quarter of net adds in company history.
    - Q4 operating margin came in at 22.2% vs 21.6% prior guidance primarily due to higher-than-forecasted revenue; guides to Q1 operating margin of 28.2%.
    - Co says revenue was slightly above forecast despite the strengthening of the US dollar vs. most currencies as membership growth and ad sales outpaced the co's forecast.

    California Fire Clean up

    - Companies that may benefit - Clear: United Rentals (URI), Caterpillar (CAT)
    - Fire Retardant Paint 3M (MMM)
    - Homebuilder - most known in LA area KB Hones (KBH)

    Earnings

    - Target Earnings (not great - not getting much better)
    --Target raised its fourth-quarter sales forecast Thursday after more consumers turned to its stores and website for holiday shopping — particularly on days known for deep discounts.
    -- The big-box retailer now expects comparable sales in the fiscal fourth quarter to grow by about 1.5%. That's better than its most recent outlook
    -- Yet the Minneapolis-based discounter did not lift its profit outlook — an indication that deals motivated shoppers. Target anticipates fourth-quarter earnings per share will range from $1.85 to $2.45 and full-year earnings per share will be between $8.30 and $8.90.

    CPI

    - CPI came mostly as expected or a little hottr than expected
    - HOWEVER, Core CPI on MoM and YoY were a little better and that sent market flying
    - Stocks had a great week and Bond yields fell
    - Seemed a little much considering all of the other data that we have seen

    Crypto

    - Bitcoin hits a new high over the weekend, Ripple on the move
    - New MEMECoins - Trump and Melania Coins are out there
    - No perceived value, but Trump coin move up sharply into the inauguration
    -- Launched ~ 1/17/2025 $TRUMP - up 560% through the inauguration (2 days) - topped out at $10B market cap (After the Inauguration dropped 30%)
    --- OH, of you want, the $MELIANA con is also available now. (Down 16% from inception to after the inauguration)

    Saying goodbye to Hindenburg Research

    - Founder Nate Anderson announced that the firm is closing
    - He outed Adani in India as well as Nikola, Ichan and other major financial "schemes"
    - The most recent report they published was on Carvana
    - But seems that they have recently reported their last name to the SEC - some pozi scheme that will eventually come out...

    Bank Earnings Round Up

    - We discussed, but generally good, better margins and investent income solid
    - JPM boosts buybacks - even though Dimon says stock is expensive.
    - Bank of America on Thursday posted results that topped expectations for profit and revenue on better-than-expected investment banking and interest income. (Investment banking fees surged 44%)
    - Morgan Stanley - The bank said that quarterly profit more than doubled to $3.71 billion, or $2.22 a share, from a year earlier, when it had a pair of regulatory charges.

    More Burning Food

    - Genesis Monita, 19, sued Bill Miller Bar-B-Q Enterprises in October 2023 after she had been served sauce that gave her a second-degree burn earlier in the year.
    - Took the breakfast taco out of the bag, sauce fell on her leg and got 2nd degree burns.
    - How much sauce was on that taco?
    - More than $25,000 was paid to her for medical expenses following her injury and $900,000 was for past and future mental anguish, physical pain and impairment.
    - The restaurant franchise was found to be "grossly negligent" by the jury, awarding Monita $1.9 million in punitive damages.

    Pelosi - Still got it!

    - TEM (+31%) early strength appears to have evolved into a price squeeze. Initial strength triggered by Nancy Pelosi disclosure of $100K Call option purchase.

     

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    1 hr 5 min
  • DHUnplugged #736: The One-Two Punch

    People are catching on – Fed has no clue

    Investors are nervous – lots of intraday volatility

    Correction – could it be?

    USA- Going DEEPER into debt

    DOGE – already making excuses

    PLUS we are now on Spotify and Amazon Music/Podcasts!

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    Warm-Up

    - People are catching on - Fed has no clue
    - Investors are nervous - lots of intraday volatility
    - Correction - could it be?
    - USA- Going DEEPER into debt
    - DOGE - already making excuses
    - Next Monday - Market Holiday and Inauguration day

    Markets

    - No happy - inflation and jobs (A 1-2 Punch for markets)
    - CPI and PPI this week - make it or break it?
    - Rates hitting key resistance
    - Oil spikes - multi-month high

    All of a sudden..

    - Microsoft, Facebook and other companies are cutting staff again
    - Talk of tough year ahead... What is up?

    If they don't cooperate?

    - Cut their pay!
    - China is set to slash pay for staff at its top three financial regulators, including the central bank, by about half, as part of a regulatory revamp unveiled in 2023 to bring their salaries in line with other civil servants
    - Starting from this month, staff at the People's Bank of China (PBOC), National Financial Regulatory Administration (NFRA) and China Securities Regulatory Commission (CSRC) will see total income slashed by about half.

    More China - Pull Forward

    - China’s trade data in December beat expectations by a large margin, with exporters continuing to frontload shipments as worries over additional tariffs mount, while the country’s stimulus measures appear to be supporting demand in the industrial sector.
    - Can it last?

    Let's Talk Turkey

    - Fed has no idea what is going on
    - They simply can move markets, (equity and fixed income) by liquefying markets
    - HOPE that they have the general trend and can regulate the flow so not overheat or overcool
    - In reality, their forecasting tools are crap
    --- BUT, focus on what they do, not what they say or their outlook

    Employment Numbers

    - Summary: Nonfarm payrolls increased by a stronger-than-expected 256,000, the unemployment rate slipped to 4.1% from 4.2%, average hourly earnings growth year-over-year was a sturdy 3.9%, and more people were employed.
    - Much better than anticipated !
    - Unemployment rate drops
    - So, we see higher prices and better employment - markets spooked that Fed out of touch
    - One-Two punch for equities

    Result

    - Steepening yield curve

    Market Sell-off

    - NASDAQ 100 off 6% from the highs
    - Big names down more (NVDA 13%, Tesla 18%, Apple 10%, NFLX 10%)
    - SOOOO - Big Cap Tech is in a correction and dragging down markets
    - Markets are in the RED for the year and unchanged/under the pre-election day move.
    - More speculative (runners) stocks are down even more...

    Quantum Stocks

    - DUH!
    - Sell-off deepened as Zuck cautioned that the potential is still years (and years) away (on Joe Rogan Show)
    --- Zuck looking like he wants to follow in Elon's footsteps

    Quantum Stocks

    More Zuck

    - Bashing Apple...
    - No innovation, random rules
    - "So how are they making more money as a company? Well, they do it by basically, like, squeezing people, and, like you're saying, having this 30% tax on developers by getting you to buy more peripherals and things that plug into it," Zuckerberg said. "You know, they build stuff like Air Pods, which are cool, but they've just thoroughly hamstrung the ability for anyone else to build something that can connect to the iPhone in the same way."

    Oh - and this...

    - Meta on Friday told employees that its plans to end a number of internal programs designed to increase the company's hiring of diverse candidates, the latest dramatic change ahead of President-elect Donald Trump's second White House term.
    - Among the changes, Meta is ending the company's "Diverse Slate Approach" of considering qualified candidates from underrepresented groups for its open roles. The company is also putting an end to its diversity supplier program and its equity and inclusion training programs.

    Light at the End of the Tunnel?

    - Cleveland Cliffs is partnering with rival Nucor in a potential bid for U.S. Steel, whose takeover by Japan's Nippon Steel was just blocked by the White House earlier this month, sources tell CNBC's David Faber.
    - Cleveland-Cliffs would purchase all of U.S. Steel for all cash and then sell off the Big River Steel subsidiary to Nucor, the sources said. The offer would be in the high $30s a share.
    - Not a great deal as the Nippon offer was at $55

    Meanwhile...

    - The Committee on Foreign Investment in the United States approved an extension of the deadline for Nippon Steel Corp. to abandon its $14.1 billion takeover of United States Steel Corp., according to a statement by US Steel.
    - The deadline will be extended to June 18 from Feb. 2 originally, following President Joe Biden’s order to halt the deal earlier this month. A Nippon Steel spokesperson confirmed the extension to Bloomberg News. The new deadline is also the date the two companies had set for completing the merger.

    Trouble in Consumerville?

    - Abercrombie & Fitch (DOWN -18%) loses much of its appeal today despite raising its Q4 (Jan) sales outlook following upbeat holiday spending trends.
    - The clothing retailer focused on a younger demographic lifted its Q4 net sales forecast to +7-8% from +5-7%, pushing its FY25 revenue growth guidance to around +15% compared to its previous +14-15% forecast.
    - Additionally, ANF reiterated its operating margin projections for the quarter and full year, anticipating around 16% and 15%, respectively.
    - According to Briefing.com: Shares are lower because ANF's sales trends weakened this year compared to the previous holiday season.
    ----In 2023, ANF raised its Q4 net sales growth outlook to a high teens percentage from low double-digits, suggesting around a 5-9 pt bump due to a robust holiday shopping season.
    -----A similar development is unfolding for rival American Eagle (AEO), whose total revenue is tracking around 5% lower for Q4 compared to a low double-digit jump during the year-ago period.
    - (Disclosure: Core holding for H&C Clients)

    Takes a Turn

    - Southwest Airlines is pausing corporate hiring and promotions, suspending most of its summer internships and going without some employee team-building events that date back to the 1980s in order to cut costs and improve margins, CEO Bob Jordan told staff Monday.
    - As part of the cost cuts, Southwest is pausing its employee "rallies," a company team-building tradition that dates back to 1985 in which staff hear from the airline's leaders about the year's goals and are treated to food and entertainment.
    - Pushed by activist Elliot Management, the airline last year charted out a plan to increase profits that includes ditching its more than 50-year-old open seating model in favor of assigned seats and creating a section with extra legroom, flying overnight flights and more aggressively cutting back unprofitable routes.

    Deep in Debt

    - Rising financing costs along with continued spending growth and declining tax receipts have combined to send deficits spiraling and have pushed the national debt past the $36 trillion mark.
    - The three-month fiscal year 2025 deficit rose to $710.9 billion, some $200 billion more than the comparable period in the prior year, or 39.4%.
    - Rising financing costs along with continued spending growth and declining tax receipts have combined to send deficits spiraling, pushing the national debt past the $36 trillion mark.
    - Though short-term Treasury yields have held fairly steady over the past month, rates at the far end of the duration curve have surged. The benchmark 10-year note most recently yielded close to 4.8%, or about 0.4 percentage point above where it was a month ago.

    Robinhood - Hand Slap

    - $45 million penalty
    - The violations by Robinhood Securities LLC and Robinhood Financial LLC related to failures to report suspicious trading in a timely manner, failing to implement adequate identity theft protections, and failing to adequately address unauthorized access to Robinhood computer systems, the SEC said Monday.
    - Stick up 8% on the day...

    More bad actors

    - Capital One is being sued by the US government’s consumer watchdog agency for “cheating millions of consumers” and not paying more than $2 billion in interest to holders of its high-interest savings accounts.
    - Stock up 2% on the day...

    Hmmmm

    - Eli Lilly struggles to meet sky-high expectations as Q4 Mounjaro and Zepbound sales fall short
    - STRONG, just not what was expected...
    - Also, some talk about weight loss pill by LLY (next year)
    - Stock down 7% on the day....

    DOGE - Dogged

    - Tech billionaire Elon Musk said Wednesday that his budget-cutting effort on behalf of President-elect Donald Trump would most likely not find $2 trillion in savings, backtracking on a goal he set earlier as co-head of a new advisory body, the Department of Government Efficiency, or DOGE.
    - Musk told political strategist Mark Penn in an interview broadcast on X that the $2 trillion figure was a "best-case outcome" and that he thought there was only a "good shot" at cutting half that.
    - Next goal?? $420 Billion?

    Cracks in the AI $$ game

    - Alibaba is cutting prices on its large language models by up to 85%, the Chinese tech giant announced Tuesday.

     

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    1 hr 7 min
  • DHUnplugged #735: Grinchly Ending

    Grinch Ending …. No Santa Rally

    CTP Results are IN! Close race

    Cocktails -> Cancerous now

    PLUS we are now on Spotify and Amazon Music/Podcasts!

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    Warm-Up

    - Grinch Ending .... No Santa Rally
    - CTP Results are IN! Close race
    - Cocktails -> Cancerous now
    - New rules for medical bill deadbeats

    - Markets

    - Poor end of year - hard hit by Grinch - killed Santa Rally
    - Gym parking Lots - Resolutions for January
    - Yields starting to becom a problem
    - CME Fed Funds Futures --> No CUT MAN!

     

    Market Update

    - December

    Market Update

    Sector Update

    January Markets

    - As expected, the start of the year is typically a time when people make resolutions they hope to keep.
    - In the finance world, we often hear about returning to discipline, cutting losers, adding to winners, and adhering to all the fundamental rules.
    - Additionally, at this time of year, investors may consider becoming more aggressive, less aggressive, more diversified, or investing in last year's winning stocks.
    - These thoughts and actions contribute to market volatility, which usually fades away within a couple of months when resolutions are forgotten
    ---- Much like how the parking lots at local gyms are packed every January, but plenty of spots open up by March.

    Big Issue

    - The big issue we need to focus on now is the continuing increase in rates as the 10-year Treasury yield has now breached a key resistance level of 4.6%, which is significant.
    - There are several reasons for this move, but the simple facts are that the economy is still growing and prices are on the rise.

    ISM Report - Not Helping (From Briefing.com)

    - The ISM Services PMI increased to 54.1% in December (Briefing.com consensus 53.0%) from 52.1% in November. The dividing line between expansion and contraction is 50.0%, so the December reading reflects services sector activity accelerating from November.
    - The key takeaway from the report is that it was a double-whammy for rate cut expectations in that the expansion in services sector activity accelerated while the prices index picked up noticeably, printing its first reading above 60.0% since January 2024.

    • The Business Activity/Production Index increased to 58.2% from 53.7%.

    • The New Orders Index bumped up to 54.2% from 53.7%.
    • The Employment Index dipped to 51.4% from 51.5%.
    • The Prices Index jumped to 64.4% from 58.2%.
    • The Supplier Deliveries Index rose to 52.5% from 49.5%.
    • The Backlog of Orders Index fell to 44.3% from 47.1%.

    No Cuts for A While

    - With prices on the rise and the economy in good shape...

    CME Fed Funds

    Nat Gas!

    - Natural gas futures prices surged last Monday, hitting a new 52-week high following reports of a colder-than-usual temperature outlook for January.
    - Natural gas February futures rose around 15% during the session after an updated outlook by The Weather Co. and Atmospheric G2 released Sunday showed that the temperature forecast for next month is expected to be colder than average in the East, specifically from Florida to Maine as well as certain parts of the Great Lakes.
    - POLAR VORTEX?
    - Already prices are fading....

    Booze Bummer

    - The U.S. surgeon general issued a new advisory warning Friday about the link between alcohol consumption and increased cancer risk, and pushed for policy changes to help reduce the number of alcohol-related cancers.
    - U.S. Surgeon General Dr. Vivek Murthy said there is a "well-established" link between drinking alcohol and at least seven types of cancer, including breast, colorectum, esophagus and liver. For cancers including breast, mouth and throat cancers, increased risk may start around one or fewer drinks per day, according to his office.
    - As part of the advisory, the surgeon general called for policy changes that could help reduce alcohol-related cancer. He pushed for alcohol labels to be more visible and include a warning about the increased risk of cancer, to reassess recommended limits for alcohol consumption based on the latest research and expand education to increase general awareness that alcohol consumption increases cancer risk.

    Madoff $$$

    - The 10th and final distribution from a fund for victims of the late Ponzi scheme king Bernie Madoff began Monday, the Department of Justice said.
    - The last disbursement, of more than $131 million, is being sent to more than 23,000 victims worldwide. When it is completed, more than $4.3 billion will have been distributed by the fund to more than 40,000 victims in nearly 130 countries
    - The largest portion of the fund for Madoff's victims, about $2.2 billion, came from a civil forfeiture recovery from the estate of Jeffry Picower, a now-dead Madoff investor, the DOJ said.
    - Another $1.7 billion came from JPMorgan Chase as part of a deferred prosecution agreement with the DOJ in January 2014. JPMorgan Chase and its predecessor institutions had served as the primary bank through which Madoff operated his scheme, the DOJ has previously said.

    Weird Reports

    - Both General Motors and Ford Motor on Friday reported their best annual U.S. new vehicle sales since 2019, prior to impacts from the coronavirus pandemic and yearslong supply chain problems.
    - GM reported 2024 sales of more than 2.7 million vehicles, up 4.3% from a year earlier. The automaker sold 2.9 million units in 2019.

    Meanwhile

    - Tesla bombs
    - Tesla posted its fourth-quarter vehicle production and deliveries report on TK. Here are the key numbers:
    ----Total deliveries Q4 2024: 495,570
    ---- Total production Q4 2024: 459,445
    -----Total annual deliveries 2024: 1,789,226
    ------Total annual production 2024: 1,773,443
    - Results for the quarter represented the first annual drop in delivery numbers for Tesla, a decline from 484,507 in the fourth quarter of 2023. For the full year, deliveries fell from 1.81 million in 2023.
    - Analysts had expected Tesla to report deliveries in the quarter of 504,770
    - Stock dropped on the news....
    --- Remember when ELON first bought Twitter and shares of Tesla tanked as concern that he was going to lose focus on the car company in favor of Twitter?
    --- Could the same thing be happening now?

    More Odd Car News

    - Short seller Hindenburg Research on Thursday accused Carvana of a running an “accounting grift for the ages” in a bombshell report — sending shares of the used-car retailer tumbling.
    - Its report — titled “Carvana: A Father-Son Accounting Grift for the Ages” — accused the Tempe, Arizona-based company of insider trading and accounting manipulation.
    - “Our research uncovered $800 million in loan sales to a suspected undisclosed related party, along with details on how accounting manipulation and lax underwriting have fueled temporary reported income growth — all while insiders cash out billions in stock,” the short seller alleged.

    Banks - Fighting Back

    - The biggest banks are planning to sue the Federal Reserve over the annual bank stress tests
    - Then, the Federal Reserve announced in a statement that it is looking to make changes to the bank stress tests and will be seeking public comment on what it calls "significant changes to improve the transparency of its bank stress tests and to reduce the volatility of resulting capital buffer requirements."
    - The Fed said it made the determination to change the tests because of "the evolving legal landscape," pointing to changes in administrative laws in recent years. It didn't outline any specific changes to the framework of the annual stress tests.
    - So the banks are making the rules?

    Medical Bills and Reporting

    - Today, the Consumer Financial Protection Bureau (CFPB) finalized a rule that will remove an estimated $49 billion in medical bills from the credit reports of about 15 million Americans.
    - The CFPB’s action will ban the inclusion of medical bills on credit reports used by lenders and prohibit lenders from using medical information in their lending decisions. The rule will increase privacy protections and prevent debt collectors from using the credit reporting system to coerce people to pay bills they don’t owe.
    - So, good news?

    Still at it...

    - Shares of Chinese tech heavyweight Tencent Holdings tumbled 5.3% in Hong Kong after the company was added to a list of "Chinese military companies" by the U.S. Department of Defense.
    - Other Chinese companies added to the list included battery maker CATL, which is part of the supply chain for automakers such as Ford and Tesla.

    Presidential Stuff

    What????

    - President-elect Trump at press conference says he is not ruling out using economic or military force to take control of Greenland or The Panama Canal
    -- OH, and we are going to change the name of the Gulf of Mexico to the Gulf of America (maybe Change the Pacific Ocean to West American?)
    - Indiana - change to Cowboyana?
    --- In fact - almost every state is named for an Indian word or non-American reason...
    --- See-> https://www.bia.gov/as-ia/opa/online-press-release/origin-names-us-states

    A little trivia with the inauguration just a few days away at this point...

    - Historical question: What was and who gave the shortest and longest Inaugural address?

    Shortest  - George Washington's second inaugural address, delivered in 1793, is the shortest inaugural address in U.S. history, consisting of only 135 words

    Longest - William Henry Harrison's 1841 inaugural address was the longest, consisting of 8,455 words.

    ---- Harrison died a month after his inauguration from pneumonia, which was likely caused by exposure to bad weather on Inauguration Day.

    Biden Giving More Away

    - President Joe Biden on Sunday signed the Social Security Fairness Act, bipartisan legislation that clears the way for teachers, firefighters, policeman and other public sector workers who also receive pension income to receive increases in their Social Security benefits.
    - The benefit boost comes as the new law repeals two provisions — the Windfall Elimination Provision, or WEP, and the Government Pension Offset, or GPO — that have been in place for more than four decades.
    - The WEP reduces Social Security benefits for individuals who receive pension or disability benefits from employment where Social Security payroll taxes were not withheld. As of December 2023, that provision affected about 2 million Social Security beneficiaries.

    Melania

    - Amazon Prime Video has exclusively licensed an upcoming documentary film for both theatrical and streaming release that will give viewers an unprecedented, behind-the-scenes look at First Lady Melania Trump," an Amazon spokesperson said Sunday.
    - "Filming began in December 2024, with an anticipated release in the second half of 2025. Prime Video will be sharing more details on the project as filming progresses and release plans are finalized. We are excited to share this truly unique story with our millions of customers around the world," the spokesperson said.

    Hack

    - Chinese state-sponsored hackers broke into the U.S. Treasury Department earlier this month and stole documents from its workstations, according to a letter to lawmakers that was provided to Reuters on Monday.
    - The hackers compromised a third-party cybersecurity service provider and were able to access unclassified documents, the letter said, calling it a "major incident."
    - According to the letter, hackers "gained access to a key used by the vendor to secure a cloud-based service used to remotely provide technical support for Treasury Departmental Offices end users. With access to the stolen key, the threat actor was able override the service's security, remotely access certain Treasury DO user workstations, and access certain unclassified documents maintained by those users."
    - Is this still part of that SolarWinds hack from a couple yeas back?

     

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    2024 - DH Closest to The Pin Cup - FINAL

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    1 hr 4 min
  • DHUnplugged: 2024 Da’ Best

    Another year is in the record books….

    Let’s   not forget about the not-so boring election,

    Hacks, beached and outages and PEAK NVDA!

    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.

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    DONATIONS ? Thank you for all who gave to the Thanksgiving Holiday Campaign...

     

    Checking out the early CTP Cup Standings

     

    HAPPY NEW YEAR!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

     

    Love the Show? Then how about a Donation?

    2024 - DH Closest to The Pin Cup - Up and Running

     

    Winners will be getting great stuff like the new DHUnplugged Shirts (Designed by Jimbo) -

    PLUS a one-of-a-kind DHUnplugged CTP Winner's certificate..

     

    FED AND CRYPTO LIMERICKS

     

    See this week’s stock picks HERE

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    57 min

About DH Unplugged

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Dvorak and Horowitz Unplugged Podcast