Stocks blasted, then loved. Markets have no memory.

Car loans 6, 7 years? Fear is palpable.

What happens when everyone is on one side of the ship?

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

Click HERE for Show Notes and Links

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

Love the Show?

Then how about a Donation?

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Warm Up

- Kaboom - 0.75% loved then hated!

- Markets seem to move one day up and one day down

- Oil getting sold - China in Spotlight again.

- Animation Banned

- Cost of paying for a new car - Watchout!

- A little Mahi fishing this weekend..

Market Update

- Down 6-10% last 5 days (US Markets)

- Debate rages about

- USD Up, Oil Down, Rates Up, Stocks - who knows

-  Big day Tuesday - Light volume, but BIG moves on indices - best in a while. Energy and Financial Lead

- No direction - oversold after last week - will it last?

Fear - You can smell it...

- Downgrades stsarting, everyone on the bear train.

- Remember what they said when everyone on the Bull train?

- When all on one side of the ship.... This happens..

How Bad Is It?

Wealth Destrucion

Coins

- And, the joke is on who?

- are HODL'rs Bagholders?

- Weekend action was nuts - Bitcoin under $18,000

- Looked like panic in light of Celsius and other worries.

BAD COINS

ALT-Energy

- Europe's biggest Russian gas buyers were racing to find alternative fuel supplies and even looking at burning more coal to cope with reduced gas flows from Russia on Monday that threaten an energy crisis in winter if stores are not refilled.

- The Benchmark Dutch front-month gas contract was trading at about 127 euros per megawatt hour on Monday, up more than 50% since the start of 2022.

- What were they thinking?

META

- Stock price near the pandemic low

- Zuck seen in photo of new metavers /VR headset (looks like old black dive mask)

SCUBA DIVING ZUCK?

Home / Housing

- Lennar Corp today became the first major U.S. homebuilder to flag a slowdown in demand for new homes as red-hot prices and surging interest rates force many buyers to rethink purchases.

- Any forecast at this point would amount to "guessing", Lennar said, even as it maintained its home delivery expectations for the full year at about 68,000 homes.

- For the second quarter, however, the higher home prices and demand helped Lennar report a profit of $1.32 billion, or $4.49 per share, beating analysts' expectations of $3.96 per share

And Now This

- Treasury Sec. Janet Yellen said that she anticipates the “economy to slow” during a Sunday morning interview on “This Week.”

- “Well, I expect the economy to slow. It’s been growing at a very rapid rate as the labor market has recovered, and we’ve reached full employment, it’s natural now that we expect to transition to steady and stable growth. But I don’t think a recession is at all inevitable.”

Even More Yellen:|

- U.S. Treasury Secretary Janet Yellen said some tariffs on China inherited from the administration of former President Donald Trump made "no strategic sense" and added that President Joe Biden was reviewing them as a way to bring down inflation.

COVID - China

- The world's biggest gambling hub Macau began its second day of mass COVID-19 testing on Monday after dozens of locally transmitted cases were discovered over the weekend, with most businesses shut but casinos remaining open.

- Most residents are asked to stay home, restaurants will be shut for dine-in and border restrictions have been tightened, meaning casino revenue is likely to be close to zero for at least a week and likely the coming weeks

- BUT, Casinos NOT CLOSED

Racism in the MetaVerse (CNBC Article)

- The tech industry has spent a decade publicly reckoning with its diversity problem. Still, Black and Hispanic workers hold just 7% and 8% of computer worker roles in the U.

Floating a 75bps hike - late Monday that is what the Fed is doing in hopes of moving faster to just pull the band-aid off.

Crypto collapse - bad things happening in the space this week.

Mortgage applications drop off a cliff as the Fed is expected to pump up the volume...

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

Click HERE for Show Notes and Links

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

Love the Show?

Then how about a Donation?

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Warm Up

- BAD MARKET

- Rule #1 - Never tell people they cannot have their money

- Food Wars? Big Problems

- WSJ Floating 75bps trial balloon!

- NEW WORD!

Market Update

- Down 6-10% last 5 days (US Markets)

- Smoked on Rate hike fears

- Coins eviscerated, disemboweled - Another Project (Celsius) bites the dust

- BEAR - YTD SP 500 -21%m NASDAQ -31% VIX up 89%

- Natural Gas PLUNGES

Recap of last Week - Wild Stuff AGAIN

- Crypto Crashes - HARD

- Celsius - Bitcoin slumped 14% on Monday after major U.S. cryptocurrency lending company Celsius Network froze withdrawals and transfers citing "extreme" conditions, in the latest sign of the financial market downturn hitting the cryptosphere.

- Etherium whacked as well as the entire space

- Once again - machine/algo/quant driven blow ups that were levered

- Binance suspended withdrawals for a time being on Monday - due to logjam

- RULE # 1 - NEVER TELL PEOPLE THEY CANNOT GET THEIR MONEY

Coin Question

- Can Binance and Coinbase halt and under what circumstances?

Tuna Fish

- Robert Kiyasaki - Rich Dad/Poor Dad said great as investment for inflation

- 2 things - 1) Lame discussion 2) Ripped me off of my idea

- Tuna great bunker food and currency

Explain?

- World Bank - Food Crisis is coming

- Fertilizer costs up BIG - Lots of Fertilizers from Russia and Belarus (amongst other places)"

- Low plantings due to high cost of fertilizer = less food = higher prices and the journey continues

- US gov't reportedly encouraging ag and shipping companies to buy and carry more Russian fertilizer in a measure to ease spiraling food costs

More Food - or is it China feud?

- Pork Wars

- Smithfield Foods Inc., which is a unit of China's WH Group, it will cease all harvest and processing operations in Vernon, Calif., in early 2023.

- "Smithfield is taking these steps due to the escalating cost of doing business in California," the company said. The move is part of an overall effort to reduce its sow herd in the Western U.S., including Utah. It's also "exploring strategic options" to pull out of its farms in Arizona and California.

- Lots of layoffs

- Maybe just making statement about states with high costs?

Rates and Markets

- CPI comes in at 8.6% on Friday - all hell breaks loose

- Big moves in food and other core numbers,

- WSJ floats 75bp idea for coming meeting (current rate hike assumption is for 50 bps)

-  MONDAY 3PM - The 2-yr note yield has surged to 3.42% while the 10-yr note yield has jumped to 3.36%, eliminating the spread between the two as market participants sense an aggressive rate-hike path will lead to slower growth, and possibly a recession, in coming months.

- Thought - Maybe market will like that Fed is getting this done faster - instead of letting this drag out (thought of market participants) -- Many presume that markets can rally on this type of move

---- HOWEVER - takes time to absorb this kind of move in markets - could actually cause panic

More Rates

- Last week - 30 year mortgage 5.5%

- This week 6.35%

- Mortgage applications dropped 50% YoY

Tesla - Bigger problems

- Production at Tesla Inc's Shanghai factory is on track to fall by over a third this quarter from the first three months of the year as China's zero-COVID lockdowns caused deeper disruptions to output than Elon Musk had predicted.

- Last week,

Target reports more problems - but market take it as a massive deflationary happening.

June is expected to be an "up" month - breaking the string in 2022.

Musk, Dimon and others are panicking - should we stay or should we go?

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

Click HERE for Show Notes and Links

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

Love the Show?

Then how about a Donation?

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Warm Up

- A recap of last week's crazy

- MonkyPox - Now Masking?

- Target revises - even worse - deflationary and market is getting this

- Apple - not much in latest update (Cars?)

- Prostitution in the Metaverse

- Floods in SoFla

Market Update

- May ends mixed - but down

- Oil Prices racheting higher - even with more supply

- Peak Inflation - being discussed

- Tesla jobs cuts - then back track - spooked markets (Unstable Genius?)

- Gas closing in on $10 per gallon in Cali

Recap of last Week - Wild Stuff

- Stocks fell on Friday to cap their eight week of losses out of the last nine. For the week, the Dow fell -0.9%, the S&P -1.2%, and the Nasdaq -1.0%.

- Indices failed to build on the prior week's momentum. Equities stalled as buyers failed to step in above key resistance levels. A slew of headlines led to the pause including:

-- On Tuesday, J.P. Morgan (JPM) CEO Jamie Dimon stated that he saw an "economic hurricane" on the horizon and that his bank would remain conservative in the current environment.

--- Tesla (TSLA) CEO Elon Musk echoed those comments on Friday, stating he had a "super bad feeling" about the economy and that his company would need to cut approximately 10% of its staff. (Walked back)

---Salesforce Inc (CRM) posted a solid round of earnings Tuesday after the bell, but the company's outlook was lowered due to FX headwinds.

--- Microsoft (MSFT) followed suit and provided a rare pre-announcement, warning that it would miss Q4 (June) results due to the same currency challenges.

Stamp-Flation

- The USPS approved a rate change that will take effect July 10, 2022. The price changes affect mainly Market Dominant prices, which include First-Class Mail, USPS Marketing Mail, Periodicals, Package Services (Media Mail, Library Mail, and Bound Printed Matter), and Special Services.

Stamp Prices Going Up

MONKEYS

- The CDC raised its alert level for Monkeypox to level 2 on Monday, recommending that travelers wear masks, among other health measures.

- More than 550 cases of monkeypox have now been recorded in 30 countries around the world, according to the World Health Organisation (WHO).

- As of June 3, there have been 21 recorded Monkeypox cases in the U.S. connected to the current outbreak, according to the CDC.

- "What's likely happened is an endemic infectious disease from Africa found its way into a social and sexual network and then was greatly aided by major amplification events, like raves in Belgium, to disseminate around the world,"

Wells Fargo

- Why anyone uses this back???

- Wells Fargo & Co is pausing a hiring policy that requires recruiters to interview a diverse pool of candidates

- the New York Times reported such interviews were often fake and conducted even though the job had already been promised to someone else.

- Finally! Buffett's Berkshire Hathaway disclosed that it sold its remaining shares in the bank this week

Peak Inflation

- Plenty of economists who argue that the shock will soon fade, as supply blockages ease and energy costs stabilize. Some warn that central banks are in danger of making a big mistake by raising interest rates too aggressively even as price pressures show signs of peaking.

- Economists at Morgan Stanley warn that the risk of an inventory glut is growing, especially in sectors such as consumer discretionary and technology goods.

- Target!!!!!!

What a week - markets on fire!

Inflation is everywhere - but the latest retail reports show a deflationary trend.

Economic realty - the Fed's communication strategy is working - maybe too well.

Russia fighting back on the economic front - what that could mean to foreign investment in the future.

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

Click HERE for Show Notes and Links

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

Love the Show?

Then how about a Donation?

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Warm Up

- Breaking In - My Car That Is....!

- BIG week for markets - up 6%++++

- Moviegoers spending - Top Gun tops box office record for Memorial Day weekend

- The Monkey Pox - headline grabbing

- Amazon stock split - coming this week

- Retail Apocalypse claiming more - inventories out of whack

Market Update

- Follow up was a divergent signal - (YTD lows and VIX at 30? (Shows that this may be localized - tech etc)

- - Someone laying big VIX bet

- Fed QT taper begins - the experiment is fully underway again

- FED carrying huge losses (unrealized)

- Stocks seem a little more upbeat - investors bargain hunting?

Market Update - Last week (Tape Painting?)

S&P 500: +6.58%

DJIA: +6021%

NAS 100: +7.2%

Small Cap : +6.5%

- Big moves on small tech names that were pummeled

VIX Bet

- Today someone loaded up on $VIX $150 calls for December 21 expiration.

- Maybe just a simple catastrophic bet or.....?

- Never hit that high (82.69 on 16 March 2020)

Amazon Stock Split

- June 6, 20/1

- Now price will be 120, which may attract option traders.

- Have to own 100 shares to do covered call strategy - was harder for some with price at $2,500

- Also could be problematic as put may be more reasonably priced.

Case-Shiller POPS

- Housing prices up big! The March S&P Case-Shiller Home Price Index scores a 21.2% increase vs. 20.0% consensus on a year-over-year basis.

- That is something that you do not see too often - if ever.

- The last time was back in 2007-2008 as housing was seen as an investment that was leveraged to the hill.

- This time, it is different, but the same.

- The leverage is not with the banks as it was, but there are plenty of investment properties out there with the hopes that the rental game will continue.

And this...

- The Hampton's summer rental market is facing an unexpected chill as inventory piles up and prices come down

- Median rental prices in the first quarter fell 26%, according to Jonathan Miller, CEO of Miller Samuel. Brokers say some owners are slashing prices by 30% or more just to fill their properties.

- Vacationers who used to rent in the Hamptons wound up buying in 2020 and 2021 to have a more permanent getaway. The average sales price topped $2.6 million in the first quarter of this year, up 25% over the same quarter last year

One More

- Sharply higher mortgage rates have caused a sudden pullback in home sales, and now sellers are rushing to get in before the red-hot market cools off dramatically.

- The supply of homes for sale jumped 9% last week compared with the same period a year ago

- April sales of newly built homes, also measured by signed contracts, dropped a much wider-than-expected 16% compared with March

- BOO HOO - "We used to get 10 to 15 offers on most houses," said Lindsay Katz, a real estate broker at Redfin in the Los Angeles area. "Now I'm seeing between two and six offers on a house, a good house."

Inflation - Europe

- Euro zone inflation rose to yet another record high in May, challenging the European Central Bank view that gradual interest rate increases from July will be enough to tame stubbornly high price growth.

- Inflation in the 19 countries sharing the euro accelerated to 8.1% in May from 7.4% in April, beating expectations for 7.7% as price growth continued to broaden,

What are they thinking? Drying up liquidity into a time of war, pandemic and a slowing economic backdrop - dumb.

Markets worried that the latest pre-announcement are more than isolated. Retail-apocalypse.

A coupe of limericks...

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

Click HERE for Show Notes and Links

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

Love the Show?

Then how about a Donation?

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Warm Up

- Markets whacked - everyone of the experts talking about need for capitulation (dumb)

- Fed continues on hawkish path even though economy crumbling - STUPID, QT and Rate Hikes will break versus slow

- Money talks - Environment Loses again?

- Davos Confab - Glum

- Bottom line - this is a total shitshow - analysts, investors, Fed, governments - maybe from standardized testing?

- Two limerick submissions

- Let's talk Twitter

Market Update

- YTD lows and VIX at 30? (Shows that this may be localized - tech etc)

- SNAP breaks - Social media and advertising stocks hammered

- Yields backing up - market correlation back a bit to "normal"

- Huge outflows from bond ETFs/Funds - what does that mean?

- Retail-apocalypse  - wait until we discuss these inventory numbers....

10 Plauges - Getting us for past decades gluttony

- Covid

- Flurona

- MonkeyPox

- Nuclear War

- Supply Chain

- Inflation

- Hurricanes

- ?????

MonkeyPox Stocks? (Smallpox vaccine potential)

- SIGA

- EBS

More of the Monkey

- Belgium has become the first country to introduce a mandatory 21-day quarantine for monkeypox patients as cases of the disease

NUKE TALK AGAIN!

- China and Russia flew nuclear capable bombers over sea of Japan while President Biden was in Asia

- From FT - (paywall and reckless)

Hurricane Season

- "Forecasters at NOAA's Climate Prediction Center, a division of the National Weather Service, are predicting above-average hurricane activity this year — which would make it the seventh consecutive above-average hurricane season.

- NOAA's outlook for the 2022 Atlantic hurricane season, which extends from June 1 to November 30, predicts a 65% chance of an above-normal season, a 25% chance of a near-normal season and a 10% chance of a below-normal season.

- GENRAC generators (GNRC)

How About This Crap?

- The White House is considering waiving U.S. gasoline environmental rules aimed at reducing summertime smog, hoping the waiver will combat rising pump prices, according to three sources involved in the discussions.

- The White House has already lifted the requirement for summer sales of E15, a lower-price, high ethanol gasoline.

More on Valuations (First two week's of May - action was relentless)

- Microsoft has lost around $189 billion in value.

- Tesla's markdown registers at $199 billion, months after seeing its valuation fall below $1 trillion.

- Amazon's market capitalization has declined by $173 billion.

- Alphabet, Google's umbrella company, is worth $123 billion less than it was ending April

- Graphics card maker Nvidia's loss stands at $85 billion.

- And Facebook parent Meta Platforms has lost $70 billion in value.

Twitter

- Deal Dead?

- Trading below pre-take private offer (~$35.80)

- Carnage in social media space - this was one of those late night snacks or something?

- Without underlying bid - price would be ... $25?

- How can he buy now? CLEARLY lack of due diligence

- If he drops deal - TSLA back in play ?

Some Bogus Poll - but interesting (MagnifyMoney)

- Nearly 4 in 10 investors (38%) pulled money from the stock market in the past year due to current events. Of that group, 40% regret their decision. Gen Zers (67%), millennials (57%) and men (49%) were most likely to take out money.

- Two-thirds of Gen Z investors ages 18 to 25 (67%) and over half of millennial investors ages 26 to 41 (57%) took money out ...

TwitDrama is still going strong.

Oil prices are back up and this is cause for some concern.

Massive rebound in small-cap tech, still needing of stabilization before investors willing to trust this market condition.

Bernanke in an unusual twist....

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

Click HERE for Show Notes and Links

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

Love the Show?

Then how about a Donation?

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Warm Up

- Coming up for Air - Epic Arizona adventure - cut short by death in family

- Everyone I know seems to have a "cold"

- It goes on and on and on and on - Twitter/Musk

- Everyone talking about dead-cat or bear-market bounce (The watch out)

- Bernanke just may have violated the Gentleman's Agreement

Market Update

- Calming a BIT - Buyers Step in (BMB or Real?)

- Oil prices on the way up again

- Food prices big problem

- China relaxing lockdowns

- Crypto Crash and StableCoin cause unease

OMG OMG - Seriously - some of these stocks down UP 25%-50% in past few days. (COIN, U, RBLX, UPST)

We Have A Problem

Crude Oil Price Chart

 Earnings - Tale of the Tape

- Walmart misses by $0.18, beats on revs; guides Q2 EPS in-line, revs above consensus; Q1 comps +3%; lowers FY23 EPS guidance; raises FY23 sales guidance; CFO seeing consumer "behavior changes" due to inflation

-- WMT issues lowered guidance for FY23, sees EPS of -1% yr/yr to $6.40 from mid single digit growth prior guidance, excluding non-recurring items

- Stock down 11% - Worst day since 1987

- Home Depot beats by $0.40, beats on revs; guides FY23 EPS above consensus, revs above consensus

- - Reports Q1 (Apr) earnings of $4.09 per share, $0.40 better than the S&P Capital IQ Consensus of $3.69; revenues rose 3.8% year/year to $38.91 bln vs the $36.78 bln S&P Capital IQ Consensus.

--- Comparable sales for the first quarter of fiscal 2022 increased 2.2 percent, and comparable sales in the U.S. increased 1.7 percent.

-- Co issues upside guidance for FY23, sees EPS of up mid-single digits vs. +3.7% yr/yr or $16.12 S&P Capital IQ Consensus;

-- Sees FY23 revs of ~+3.0% to ~$155.7 bln vs. $154.02 bln S&P Capital IQ Consensus.

Food prices - Bad energy plan

- Brazilian sugar cane mills are cancelling some sugar export contracts and diverting production to ethanol to cash in on high energy prices

- Production mix change and crop delay

- total cancellations recently estimated of 200k-400k raw sugar production

- production is shifting in favor of ethanol as high energy prices driven by pandemic recovery and war in Ukraine spur more fuel output

Bernanke

- On why Fed waited too long: “One of the reasons was that they wanted not to shock the market,” he said. “Jay Powell was on my board during the Taper Tantrum in 2013, which was a very unpleasant experience. He wanted to avoid that kind of thing by giving people as much warning as possible. And so that gradualism was one of several reasons why the Fed didn’t respond more quickly to the inflationary pressure in the middle of 2021.”

- Former Federal Reserve Chair Ben Bernanke said the central bank erred in waiting to address an inflation problem that has turned into the worst episode in U.S. financial history since the early 1980s.

- BUT WHY IS HE TALKING NOW??????

---- Bernanke’s new book is “21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19” and will be released officially Tuesday.

More Fed

- Powell speaking today (free lunch for him) - Financial conditions have tightened significantly

- Comments in line with expected (2) 50 bps hikes expected over next 2 meetings.

- Markets dumped a little on that comment, USD climbed,, BTC and Gold dropped

Baby Formula - Serious Shortage

- Shelves bare

- Baby formula aisles at U.S. supermarkets have been decimated since top U.S.

He went too far - TOO FAR!

Europe abandons its plans - oil recoils.

Twitter drama continues...

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

Click HERE for Show Notes and Links

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

Love the Show?

Then how about a Donation?

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Warm Up

- Testing key psych levels - not coming up for air

- The Twitter saga continues - but what did you expect with Musk involved?

- Egg on Face

- Red is the New Green

- Hair Raising Charts today

- Maybe ????/ China Tariff News?

Market Update

- TAKING A BEATING - No Where to hide...

- The opposite of the wealth effect, now known as poverty effect ?

- Red is the New Green?

- Bad year's return this month

- Earnings outlook - somewhat lower estimates coming in

OMG OMG - Seriously - some of these stocks down 50% in past few days. (COIN, U, RBLX, UPST)

DONATIONS

Performance 2022 - OMG

Growth/Value

OMG - Another OMG

Cut in Half

Last One

Markets In Turmoil

Rivian Motors

- Amazon and Ford took big positions - Was good for a minute

- Selling off shares, taking stock down

- High $160 - Current <$25

Earnings Outlook

- Analysts had lowered their overall forecast for S&P 500 second-quarter profit growth to 5.6% from 6.8% at the start of April

- The full-year forecast has held at 8.8%

- BUT - The 2022 growth estimate, however, drops to about 5% without the energy sector's growth - a sizeable impact for a sector that accounts for just 4% of the S&P 500's market capitalization.

HORRIFIC

- GoodRX - Misses - stock chopped 39% in A/H

- Upstart - Guides down - stock down 42% in A/H (ATH $395 - now $ 46)

- Coinbase Global prelim Q1 ($1.96) vs $0.86 S&P Capital IQ Consensus Estimate; revs $1.17 bln vs $1.48 bln S&P Capital IQ Consensus Estimate

Do We Have To Talk About This?

- How Does Nuclear War Help Anyone?

- Testing - very timely....

- The Ilyushin II-80, dubbed the “Doomsday” plane, is a Russian-built aircraft with emergency strategic equipment built which is designed protect Putin from a nuclear attack.

- The aircraft has highly distinctive features including a windowless fuselage and an exaggerated radar detection dome on the roof of the cockpit. This is reportedly to prevent exposure to electromagnetic pulse (EMP).

- Domsday plane showcased in Military parade in Red Square

European - Russian Oil Ban

- EU reportedly abandons plans to ban Russian crude shipping after failing to lock down key partners to mirror the sanctions, according to FT

- How does that work

OH - And this....

- Japan will ban Russian crude oil imports "in principle," as part of a Group of Seven (G7) campaign to counter Russia's invasion of Ukraine, Prime Minister Fumio Kishida said after an online meeting of G7 leaders on Sunday.

China Lockdowns

- Locking down in Shanghai - not improving

- Bejing - Srtarting to close in

- Will China ever be out of COVID emergency?

Fed

- Boosted and Freaked Markets

- Took 0.75% off the table - so he said - market rejoiced

- One day later - Oooofah

- Fed fund futures are priced for rates reaching 1.75-2.0% in July, from the current 0.75-1.0%, and climbing all the way to around 3% by the end of the year.

- USD at 20 year high

- Crypto - crashes (so much for the hedge - thanks fellas!)

NEWS ALERT - Last Friday

- CNBC’s Jim Cramer said Friday that the Federal Reserve’s attempts to crush inflation by raising interest rates will also inevitably bring down “formerly high-flying stocks” – even those that are “legitimate” companies.

Double News Alert!

- Nothing done but..... Biden weighing reducing/lowering China tariffs to slow inflation

- NO F'Ing KIDDING! WORST THING EVER TO BEGIN WITH

Hone Kong "Election"

- Hong Kong's leader-in-waiting, John Lee, was endorsed for the city's top job on Sunday by a committee stacked with p...

Fed decision imminent.

Global slowdown - is now the time to cool the rate hike discussion a bit?

It is the worst start of a year since.....

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

Click HERE for Show Notes and Links

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

Love the Show?

Then how about a Donation?

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Warm Up

- Secret - Not First Time Rates Up - Markets getting crazy

- Maybe it is not just the rates. (Reality Check Time?)

- Fed coming out with their latest rate decision tomorrow

- 1000 point days, 500 point turnarounds - the norm now?

- Some earnings news....

Market Update

- Mixed bag - Amazon crash, Facebook Rallies (general story this quarter)

- THIS IS A FED ENGINEERED RECESSION

- Worst start to a year since....   (April Awful!)

- USD 20-year high against Yen

Andrew's Idea for the Fed

- Raise rates by 0.50% tomorrow

- Instead of range (0.75 -1.00) just make it 0.75%

- Stress that inflation is high alert item, BUT watching other items and how they impact economy

- Tamp down hard line a touch, but continue to note inflation concerns, blended with economic concerns

- Risk is to upside for markets (slightly) as many positioned for very hard line (aka priced in)

Free Range No More

- Organic and free-range chickens have been thrown into lockdown.

- Egg-laying hens that normally have access to the outdoors can no longer roam as freely or feel the sun on their beaks as some U.S. and European farmers temporarily keep flocks inside during lethal outbreaks of bird flu, according to egg producers and industry representatives.

- Free Range seems to be just a nice thing.....

------The U.S. outbreak is the second-worst in history, with more than 35 million birds wiped out this year. France has culled nearly 16 million birds in its worst outbreak ever, while infections have also hit nations including Britain, Italy and Spain

Earnings of Interest

- The online education company saw its shares plummet 39.2% in premarket trading after it cut its revenue outlook, saying current economic conditions are prompting consumers to prioritize "earning over learning."

- Pfizer reported a first-quarter profit of $1.62 per share, 15 cents a share above estimates. Revenue topped forecasts as well. The drugmaker cut its full-year outlook due to an accounting change. Pfizer shares fell 1.3% in premarket action.

- Facebook/Meta - Stock rallied hard after soothing investor's worst fears that it had become irrelevant (cutting back on spending by ~ $3 billion also helped)

- LYFT - earnings okay, outlook okay - big spend - - plans to invest more in driver supply to improve service levels and in other business initiatives. (Stock down 30% A/H)

- Starbucks - good report - but big investment coming to catch up to unmet demand.

----- Pulled guidance as no visibility due to China lockdowns

- AMD - BIG Quarter - server business picked up and reports that they have a good outlook related to supply chain to meet guidance. (up 7% A/H)

Crypto ATMs

Crypto ATM

Media Collapse

- Vice Media, the digital media company once valued at $5.7 billion, has hired bankers to seek a sale, according to people familiar with the matter.

- Paramount - sales fall

- Disney + what going on

- Netflix - Numbers in reverse

- What is up with this?

Explain

- Analyst worried about bubble - huge collapse potential

- "There's probably a lot more downside to go," said Suzuki, who's also a former Bank of America-Merrill Lynch market strategist. "Information technology, communication services and consumer discretionary... alone make up about half of the market cap of the S&P 500."

- Yet, Suzuki is staying invested in stocks.

- To weather a potential crash, Suzuki is taking a barbell approach. On one end, he likes stocks which typically benefit in an inflationary environment,

Interesting development with rates - first time in a very long time this happened.

YUAN moving - big change of trend

Big news from GM - or is it?

Stocks slump, bonds up - correlations normalize for once.

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

Click HERE for Show Notes and Links

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

Love the Show?

Then how about a Donation?

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Warm Up

- Markets moving to lows

- China Jailing Citizens

- Currency Moves - USD getting too HOT (Client ports moving to Unhedged bonds)

- Something with yields that has not happened in 3 years!

- Did they have to use the word "Nuclear" again?

--- Yields finally cracking lower a bit

Market Update

- BIG WEEK for earnings

- Twitter Musk - Musk Twitter- VIX > 30

- Market Questioning Growth (Oil, Chips)

- Big reversal - hope for change of trend - stuffed

YTD - NAS down 19%, SP500 12%, DJIA 8%

- Natural Gas - HAVOC

What you will start to hear from the bobble-heads shortly:

1) It is an orderly sell-off

2) Healthy process

3) Buying opportunity

4) Cleansing ...............

YUAN

USD/YUAN

Twitter

- Twitter confirms definitive agreement to be acquired by entity wholly owned by Elon Musk for $54.20 per share in cash in a transaction valued at ~$44 bln

Chip Prices - Not As OverPriced?

- A sharp drop in graphic chip prices could presage an unexpectedly quick ending to a global chip crunch that has crippled manufacturing from smartphones to cars, and the issue will be a central one for companies reporting results this week.

- GPU prices are still being sold at a premium, but a smaller one. Susquehanna analyst Christopher Rolland earlier this month said that the markup over manufacturer suggested retail price or MSRP has fallen to 41% from 77%.

- Demand for GPUs may also drop because crypto currency Ethereum is expected to change the way it operates late this summer, reducing the demand for graphics chips that power systems used to mine the cryptocurrency today, analysts say.

- Some talking GLUT -

Yields in play

- The yields on the 1-yr T-Bill (1.94%) and 2-yr Note (2.67%) both surpassed the dividend yield on the S&P 500 (1.47%) in early March.

- First time in 3 years

- Sucking sound out of stocks?

Natural Gas

- Russia will halt gas flows to Poland on Wednesday, the Polish gas company PGNiG said.

- The company says it hasn’t got any outstanding payments and that the cutoff is a breach of its contract.

- Won't pay in Rubles....

- European Natural gas prices shot up 17%

Twitter - Musk

- Deal done? $44 billion ($38% prem)

- Largest buy by any one individual

- Musk coming up with $

--- $12.5% margin loan against Tesla shares and other monies for about 65% and borrow the rest

---- What happened to the Poison Pill?

- Why did BOD stop - no shop?

More to worry about?

- Investors turn anxious

- Elon Musk is buying Twitter. Where does that put Tesla? The day after the announcement, Tesla is dropping pretty hard as the concern is that "fixing" Twitter is going to take time away from Tesla and the other companies he runs.

- Tesla down 10% today

Silly

- The price of dogecoin popped on Monday afternoon following news that Twitter has accepted Elon Musk's buyout deal.

- The meme cryptocurrency jumped as much as about 27% after the announcement that Twitter will be purchased by an entity owned by the Tesla CEO.

Netflix/NetFlop

- Going after password sharing

- More than 100 million households are using a shared password

- Will likely favor the setting of an extra fee for those accounts being used by multiple people outside of the home.

- The company has already started a test of this feature in Peru, Costa Rica and Chile

- The pricing is different per country — about $2.13 per month in Peru, $2.99 in Costa Rica, and $2.92 in Chile,

Housing numbers rolling over. Survey says: Bears overtaking Bulls by a wide margin.

Turnaround Tuesday is intact.

IMF is downgrading global growth.

Announcing a new Closest to The Pin

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

Click HERE for Show Notes and Links

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

Love the Show?

Then how about a Donation?

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Warm Up

- When  the Going gets tough - the morons recoil

- Rates still moving higher - could be ready to peak

- PPI at 11.2% last week - ridiculous

- Next week avalanche of earnings

- Housing prices cooling? 30-yr @ 5.25%!

- Happy Financial Literacy Month

- A must see chart/infographic

- Excitd abiut 4/20 day? - TESLA announcing earnings at 4:20

Market Update

- April now a down month, Gold Up, Silver Up, Dollar Up (SAFETY Trade)

- Twitter think all over Twitter

- Nuclear and Domestic Drilling Back Baby!

- Bank Stocks - Earnings playbook last week - spot on.... (But.....)

- Tuesday - The Once a Week short squeeze happening today

- Fed speakers are all hawkish in union - A Fine Kettle...

Hawks Unite

- A Kettle of Fed speakers, a Cast or a Boil is now the proper nomenclature.

- Group of Hawks is called....

Brainard

- Party Line...

- Federal Reserve Governor Lael Brainard said she expects methodical interest rate increases and rapid reductions to the Fed's balance sheet to bring U.S. monetary policy to a "more neutral position" later this year, with further tightening to follow as needed.

Yield Curve Types

Yield Curve Lingo

Markets - Technical Levels

- Very basic support and resistance right now

- 50 DMA seems to holding wither resistance (QQQ , SPY) or support (DIA)

Netflix  - UGH

- Net -Shits the Bed is more like it

- Stock down 25% after first loss of subs in a decade and miss on revs and weak Q2 guidance (62%  from high)

- Global subs expected to come in at +2.5 million ... actual -200k

- Taking down Roku, Disney, paramount and Fubo TV

Earnings - Bank of  America (best of season so far)

- Reports Q1 (Mar) earnings of $0.80 per share, $0.06 better than the S&P Capital IQ Consensus of $0.74; revenues rose 1.8% year/year to $23.2 bln vs the $23.09 bln S&P Capital IQ Consensus.

- Net interest income up $1.4 billion, or 13%, to $11.6 billion, driven by strong deposit growth and investment of excess liquidity, loan growth and benefits from higher long-end interest rates.

- If yield curve calms a bit AND recession potential fades... If If If - then good for BAC

BlackRock

- BlackRock Inc posted a better-than-expected quarterly profit on Wednesday as the world's largest asset manager benefited from investors pouring money into its various index-traded and active funds.

- The New York-based firm ended the past quarter with $9.57 trillion in assets under management, up from $9.01 trillion a year earlier. That compares with a record high of $10.01 trillion in the fourth quarter.

Bastards!

- Elon Musk on Thursday stepped up criticism of the U.S. securities regulator, calling Securities and Exchange Commission officials "bastards" for bringing fraud charges against him over his 2018 tweets regarding taking the company private.

- "So I was forced to concede to the SEC unlawfully. Those bastards," Musk told the audience.

- Musk said he felt forced to settle with the SEC because banks threatened to cease providing capital if he did not do so, which would have made Tesla bankrupt immediately.

- Meanwhile......April 16 - A federal judge has ruled that Tesla CEO Elon Musk's 2018 tweets about having secured financing to take the company private were false, according to court filings by Tesla investors suing the billionaire over the tweets.

- The filing said that the court ruled April 1 that Musk's 2018 tweets were "false and misleading.