DHUnplugged Podcast

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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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 ages

Huge Failure of tech - Crowdstrike getting skewered (Down ~ 30% since incident)

Dangerous market - running on emotions

Tesla Earnings are out...

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

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Chatroom still a work in progress it appears

Warm Up

- Politics Goes off the rails - Biden out (Failed)

- Huge Failure of tech - Crowdstrike getting skewered (Down ~ 30% since incident)

- Dangerous market - running on emotions

Market 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 too

Need a new CTP

Market 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 route

Election

- 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....

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

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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 Appetites

Earnings season coming up

Biden staying in the race (for now)

Complacency nearing a tipping point.

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

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DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.

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Warm 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 ISSSUES

Market Update

- Big Swings - Massive Rotation

- Employment Report for June

- Market Moves - the inside track

- Big Box - down to a few

Fed 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 likely

Employment 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 range

Boeing

- 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...

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!

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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 minute

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

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DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.

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Warm 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 minute

Next 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 volatility

Stock 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 $419,300

More 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 "...

Apple AI - Disappoints (or confuses)

NVDA - passes AAPL market cap

Treasury yields moving within a range

Beanstalk - what is that story again?

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

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NO SHOW NET WEEK - OUT ON BIZ FOR A FEW DAYS

Warm Up

- Apple AI - Disappoints (or confuses) - for a minute

- NVDA - passes AAPL market cap

- Treasury yields moving within a range

- Beanstalk - what is that story again?

- Fed in play

Market Update

- Large Caps dominate June (thus far) - Small-caps out of favor

- Buyers are hungry - any dip is bought

- Economic confusion - Jobs report

- NVDA - 10:1 completed (now what?)

Apple WWDC - Pins and Needles

- Features will go beyond artificial intelligence to personal intelligence.

- Will protect privacy at every step.

Capabilities:

- Will enable iPhone to create language and images.Language understanding will be natural.

- New writing tools can summarize text when you are working on a blog post.

- Users can create new emojis for conversation.

- Images can be created in three styles.

Actions:

- Will allow hundreds of "actions" such as "show me my photos from last week" or "show me the podcast my mom wanted me to listen to last week."

- Apple Intelligence is powered by large language models.

- Introduces Apple Private Cloud with personalized AI.

- Siri will be able to take AI enabled actions. It will allow for more natural language.

---- Market not impressed - was hoping for BIG AI announcement from Apple.

------ Stock down on this news - then POPS to ATH on Tuesday

Elon on Apple AI

- Elon Musk said he would ban Apple Inc. devices from his companies if OpenAI’s software is integrated into the products at the operating system level.

- The remarks followed a presentation Monday by Apple Inc., when it said that customers would have access to OpenAI’s ChatGPT chatbot through the Siri digital assistant. Apple plans to roll out the capabilities as part of a suite of new AI features later this year.

Jobs report

- May nonfarm payrolls increased by 272,000 (Briefing.com consensus 185,000).

- The 3-month average for total nonfarm payrolls increased to 249,000 from 237,000.

- April nonfarm payrolls revised to 165,000 from 175,000. March nonfarm payrolls revised to 310,000 from 315,000.

- May average hourly earnings were up 0.4%

- Unemployment rate moved up to 4%

--- YET - still HOPE for 1-2 rate cuts this year

OOPS

- Toyota - company has lost %15B market cap after false data found

- Japan's transport ministry found false data used to certify certain models a week ago on Monday.

- Other companies too - Toyota, Mazda, Suzuki, Yamaha

-- Companies falsifying data used in safety tests.

- Toyota chairman: "tested using methods that differ from the standards defined by the national authorities."

--- Collusion????

Gold - Short Supply?

- According to the World Gold Council - Gold hard to find

- New gold deposits are becoming harder to find around the world as many prospective areas have already been explored

- Gold Strategist: "I think the overwhelming story there is: after 10 years of rapid growth from around 2008, the mining industry is struggling to report sustained growth in production," said Reade.

- Bottom Line: "It's getting harder to find gold, permit it, finance it, and operate it,"

Game-Stop Already

- Shares tank 40% after another big run up - Keith Gill live stream

- Continues to post cryptic messages now that he is back

- Must be bored

Panic Buttons

- Retail giant Walmart says it is against putting panic buttons in stores - a move that the New York legislature wants to require under a new law aimed at keeping retail workers safe.

Sinkholes forming

Memes again - Huge Moves

Economy starting to stall

Face Ripper moves into the close

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

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DONATE - Show 700 Campaign

Warm Up

- Sinkholes forming

- Memes again - Huge Moves

- Economy starting to stall

- Announcing a NEW CTP

Market Update

- Face Ripping - Last Friday

- Software Stocks hammered

- May finished in the green nicely

- Oil Drooping

- Roaring Kitty is back

Face Rip

- Stocks ramped on the last day of the month

- 300 points in 10 minutes to finish the day on Friday

- markets had a good month -

-- Large Cap Growth up 6% for the month

- US real estate up 5%

- Only area LataAm down for May

Sinkhole Forming Again

- MEGA Caps pulling market up - Primarily NVDA

- Monday S&P 500 Flat - S&P Equal Weight  -0.53%

Best Buy Earnings

- "Sluggish Demand"

-  Earnings per share: $1.20 vs. $1.08 expected   Revenue: $8.85 billion vs. $8.96 billion expected

- Best Buy has noticed a pullback in purchases of discretionary items as consumers manage higher costs because of inflation.

- Shares soar

Software stocks Soft

- Salesforce plunges 20% after it posted weaker than expected revenue

- The WisdomTree Cloud Computing Fund, an exchange-traded fund that tracks cloud stocks, slid 5% this week, the sharpest decline since January. Paycom, GitLab, Confluent, Snowflake and ServiceNow all lost at least 10% of their value in the downdraft.

- Dell PLUNGED - 20% too this week

Economics

- April Construction Spending -0.1% vs 0.2% Briefing.com Consensus; prior -0.2%

- May ISM Manufacturing Index 48.7 vs 49.6 Briefing.com consensus; prior 49.2

- May S&P Global US Manufacturing PMI - Final 51.3 vs 50.9 prelim; prior 50.0

Focus on Manufacturing (Briefing.com)

- The May ISM Manufacturing Index checked in at 48.7% (consensus 49.6%), down from 49.2% in April. The dividing line between expansion and contraction is 50.0%, so the May reading suggests there was a faster pace of contraction in the manufacturing sector last month.

- The key takeaway from the report is that it showed a faster pace of contraction in manufacturing activity that will stir worries about the economy missing its mark with a soft landing.

- The New Orders Index slumped to 45.4% from 49.1%, hitting its lowest level since May 2023.

- The Prices Index dropped to 57.0% from 60.9%.

- The Employment Index increased to 51.1% from 48.6%.

- The Backlog of Orders Index fell to 42.4% from 45.4%.

- The Supplier Deliveries Index held steady at 48.9%.

- The Production Index decreased to 50.2% from 51.3%.

- The New Export Orders Index rose to 50.6% from 48.7%.

Fed Cuts - Not Happening

- According to the latest issues of Barrons

- "The Federal Reserve isn’t likely to lower interest rates in 2024.  Elevated inflation, a resilient economy, and a still-strong, if softening labor market argue against the need for easing monetary policy, especially as these conditions are expected to persist through year end."

WAIT A MINUTE

- Rate cut bets for September are back a 66% probability after a slightly weaker than expected JOLTS report

- 10YR Yields @ 4.35% (Down from 4.6% last week)

GDPNow

- Atlanta Fed GDPNow model estimate for Q2 real GDP growth is 1.8%, down from 2.7% on May 31

- Latest downward revision follows today's release of the ISM Manufacturing Index for May and Construction Spending Report for April.

As Usual - Backwards

- OPEC+ prolongs cuts for one year

- OPEC+ agreed on Sunday to extend most of its deep oil output cuts well into 2025 as the group seeks to shore up the market amid tepid demand growth, high interest rates and rising rival U.S. production.

Short Week - 4 days of trading - then EOM

The Miracle Flight - I have witnesses this with my own eyes

Cruise anyone?

Global Warming - New Info In

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Warm Up

- Short Week - 4 days of trading - then EOM

- The Miracle Flight - I have witnesses this with my own eyes

- Cruise anyone?

- Global Warming - New Info In

Market Update

- 40,000 ! Then we fail

- Fed Officials Hawkish behind closed doors

- BBQFlation

- Split Excitement!

- Hindenburg Omen

Fed - Two Faced

- Federal Reserve officials grew more concerned at their most recent meeting about inflation, with members indicating that they lacked the confidence to move forward on interest rate reductions.

- Minutes from the April 30-May 1 policy meeting of the Federal Open Market Committee released Wednesday indicated apprehension from policymakers about when it would be time to ease.

- The meeting followed a slew of readings that showed inflation was more stubborn than officials had expected to start 2024.

BBQFlation

- Your Memorial Day barbecue will cost upward of 10 percent more than it did this time last year according to Datasembly

- Datasembly follows the cost of groceries across the country every week. Its recently released data points to this year's Memorial Day festivities costing the average American family about $30.18 or 10.19% more than 2023.

- Burgers jumped from $7.04 in 2023 to $8.07 in 2024, or a change of 14.63% in cost. Hamburger buns cost two cents more, from $3.04 on average to $3.06.

Hindenburg Omen

- Indicator was triggered last week.

- only right about 25% of the time

- Was thought to be able to predict market crashes - let's see what happens.

FED HEAD

- The Federal Reserve should wait for significant progress on inflation before cutting interest rates, Minneapolis Federal Reserve President Neel Kashkari told CNBC on Tuesday.

- Asked what conditions were needed for the Fed to cut rates once or twice this year, Kashkari said: “Many more months of positive inflation data, I think, to give me confidence that it’s appropriate to dial back.”

- He said the central bank could potentially even hike rates if inflation fails to come down further. “I don’t think we should rule anything out at this point,” Kashkari added.

Could we finally get relief from these thieves?

- The U.S. Department of Justice is suing to break up Live Nation, the parent company of Ticketmaster, over alleged antitrust violations.

- The lawsuit, joined by 30 states and filed Thursday, follows a DOJ investigation into whether Live Nation maintains a monopoly in the ticketing industry, a probe launched in 2022 and bolstered by fan complaints following a botched roll out for tickets to Taylor Swift's Eras tour.

- In a statement, Live Nation said the DOJ's allegations of a monopoly are "absurd."

- "The DOJ's complaint attempts to portray Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry. It blames concert promoters and ticketing companies—neither of which control ticket prices—for high ticket prices. It ignores everything that is actually responsible for higher ticket prices, from increasing production costs to artist popularity, to 24/7 online ticket scalping that reveals the public's willingness to pay far more than primary tickets cost," said Dan Wall, Live Nation executive vice president for corporate and regulatory affairs.

DONATIONS- New Shirt Design?

Miracle Flights

- The 1986 Air Carrier Access Act requires airlines to provide a wheelchair to passengers with disabilities at the airport. The problem: Many travelers are faking it,

Big Week - Big Earnings on Wednesday

Oil Unusually stable

Helicopter Accident - Another "fog" incident?

Meme stocks come back to earth

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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DONATE - Show 700 Campaign

Warm Up

- Big Week - Big Earnings on Wednesday

- Oil Unusually stable

- Helicopter Accident - Another "fog" incident?

- Meme stocks come back to earth

- We have an Osbourne Effect

Market Update

- 40,000 ! Get the party hats!

- ATH, ATH, ATH

- Commods - Copper and Gold (AND silver)

- VIX - lowest since 2019

- Someone better against Tesla (Big name)

Banks

- The Federal Reserve and two other U.S. regulators are moving toward a new plan that would significantly reduce a nearly 20% mandated increase in capital for the country's biggest banks following lobbying efforts by industry CEOs like JPMorgan Chase's Jamie Dimon, the Wall Street Journal reported over the weekend.

- Required increases in capital for banks like JPMorgan and Goldman Sachs meant to ensure they have sufficient buffers to absorb potential losses — would on average be about as much as originally floated, the Journal added.

- Top officials from all three agencies involved in the pending capital rules — the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency — are still discussing substantive and technical revisions and there is no guarantee that an agreement will be reached, the WSJ reported.

Goodbye?

- In a response to a question Monday about the bank's succession planning, Dimon indicated that his expected tenure is less than five more years

- That's a key change from Dimon's previous responses to succession questions, in which his standard answer had been that retirement was perpetually five years away.

- Stock dropped 4% on that conversation

No Direction - Grasping ....

- Snap Inc. Chief Executive Officer Evan Spiegel said he’s investing more aggressively in bringing artificial intelligence and machine learning to Snapchat to make it more interesting for its users, the next major shift after years spent overhauling its advertising business.

- “There was a recognition that we’d fallen behind the curve on the machine learning side, which, to some degree, was reflected in the business performance,” Spiegel said in an interview. “We needed to improve there and bring together some of our most senior machine learning folks to just talk about what it would look like for us to get to state of the art and really invest.”

Meanwhile

- VIX is sagging

- The CBOE Volatility Index, which measures the 30-day implied volatility of the S&P 500, closed Friday at the lowest level since November 2019 as the benchmark stock index traded in a tight range just below the all-time high.

- Aside from an April pop, the VIX has been muted for much of 2024 as shares climbed.

VIX Chart

Interesting

- Online home goods retailer Wayfair is opening its first namesake store, near Chicago, following a string of other digitally native companies that have turned to brick-and-mortar for growth.

- So they think the low cost failed execution is going to do better in the higher cost brick and mortar arena?

- The company says people need to still sit in and try furniture.... (WHAT?)

AI - Here we go

- OpenAI has disbanded its team focused on the long-term risks of artificial intelligence just one year after the company announced the group, a source familiar with the situation confirmed to CNBC on Friday.

- News of Sutskever's and Leike's departures, and the dissolution of the superalignment team, come days after OpenAI launched a new AI model and desktop version of ChatGPT, along with an updated user interface,