DHUnplugged Podcast

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

Bifurcation - rates separating from inflation concerns.

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

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

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Warm Up

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

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

- A GIGANTIC walk-back by the Fed

- More earnings this week - winners and losers

- STONKS - Say it ... STONKS

Market Update

- JUMPIN' July - big finish|

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

- China looking bleak - could mean more stimulative measures?

- Hong Kong GDP shrank

- German manufacturing - you guessed it....

- Home prices in Australia - whooops...

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

Weird Chart - Odd Curve

Odd Chart

ABOVE - WHY?

- Expectations are that we are near or in a recession

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

- Bond being bought - Recession fears outweigh rate hike fears

- US still bringing in foreign money (safety play)

- NO CONFIDENCE IN ADMINISTRATION

Let's look at Global ECO

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

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

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

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

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

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

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

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

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

Meanwhile - US Central Bank DOVE

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

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

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

Another World Health Emergency.

A recession by any other name.

Enough of Mr. Musk already - what else could there be anyway?

Earnings and Eco coming hot and heavy.

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

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Warm Up

- Better vibe - markets are getting more comfortable ?

- Biden has a case of Vid

- MonkeyPox - Update from WHO

- Are we there yet - Peak Musk ?

- Recession - "Not Inevitable"

- 10yr Yield 2.78%!

Market Update

- Big week for earnings and ECO - HUGE WEEK

- Tech earnings in the spotlight - watch ad biz

- Markets having a great month - Fed tomorrow can change that - but odds are they stay the course

- IMF Downgrade and a remarkable housing number

- BIG MOVE AFTER HOURS - MSFT, GOOG Miss - but commentary about strong demand overshadows slowdown

- Chipotle moves higher on commentary about potejtial for MORE price hikes

REMEMBER: Closest to the Pin - get your entry in!!

BIG WEEK - A Really Big Week

- This week something like 40% of S&P 500 companies are going to report this week

- GDP, PCE, Durable goods, Case-Shiller, Consumer Confidence.....

Great month so far - due for a bounce from really oversold conditions

- Financials +5%, Tech +7.5%, Homebuilders +12% (even with drop in NAHB and housing market)

Consumer Disc +12%, Utilities -0.20%, Bitcoin +17% (Gold and Silver DOWN)

Rate Odds - Wednesday at 2PM

- 77.5% of a 0.75% rate hike, 22.5% for 1.00% hike - ZERO PERCENT PROBABILITY for 0.50%

Case Shiller Home Prices

- May S&P Case-Shiller Home Price Index 20.5% vs. 20.8% consensus; prior 21.2%

Not Inevitable

- Still trying to stick this down our throats

- U.S. Treasury Secretary Janet Yellen said on Sunday that U.S. economic growth is slowing and acknowledged there was the risk of a recession, but she said a downturn was not inevitable.

- U.S. Treasury Secretary Janet Yellen said on Sunday that U.S. economic growth is slowing and acknowledged there was the risk of a recession, but she said a downturn was not inevitable.

BUT:

- IMF's World Economic Outlook revised down; risks to the outlook 'overwhelmingly' to the downside

- The baseline forecast is for growth to slow from 6.1 percent last year to 3.2 percent in 2022, 0.4 percentage point lower than in the April 2022 World Economic Outlook.

- Lower growth earlier this year, reduced household purchasing power, and tighter monetary policy drove a downward revision of 1.4 percentage points in the United States.

- In China, further lockdowns and the deepening real estate crisis have led growth to be revised down by 1.1 percentage points, with major global spillovers.

- And in Europe, significant downgrades reflect spillovers from the war in Ukraine and tighter monetary policy.

- In 2023, disinflationary monetary policy is expected to bite, with global output growing by just 2.9 percent.

- The risks to the outlook are overwhelmingly tilted to the downside.

AND...............

- CNBC Fed Survey shows 55% probability of recession over the next 12 months; expects Fed to start cutting rates next year 

But, Then There is This

- White House puts out a blog - "How Do Economists Determine Whether the Economy Is in a Recession? "

- What is a recession? While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle. Instead, both official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at the data—including the labor market, consumer and business spending, industrial production, and incomes. Based on these data,

Good news! Powell and Clarida cleared of any wrongdoing. That was a close one!

Markets starting to rethink the doom and gloom? Earnings season colliding with rate hike worries.

Mystery Chart - impressive run.

Uber - terrible - not going to change their ways.

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

- Earnings season begins this week

- Mystery Chart - It is UP this year!

- President Biden - No Headway during Saudi Trip

- Saying goodbye to Ivana Trump

- Heat Waves - How is your weather?

Market Update

- Reversal Alert - 0.75% < 1.00% new base and markets get excited

--- If you think its a rally but it's not - It's Chiffon? (Commercial from the 70's)

---- Its not nice to fool mother nature

- Bank Earnings - mixed bag. Hard to interpret due to loan loss provisions

- Short Squeeze / rebalance ahead of earnings

- UBER - disgusting practices

- China is easing some rules - money available

- How much more badder does the news have to get?

- Yield Curve very inverted..... 2 year higher than 30 year...

- BofA Global Fund Manager Survey revealed the lowest equity allocation since the Lehman Bros. bankruptcy and the highest cash levels since 2001.

Announcing a new Closest to the Pin!

Starting with Peak Pessimism

- Investors slashed their exposure to risk assets to levels not seen even during the global financial crisis in a sign of full capitulation amid a “dire” economic outlook, according to Bank of America Corp.’s monthly fund manager survey.

- A net 58% of fund managers said they’re taking lower than normal risks, a record that surpassed the survey’s global financial crisis levels.

- Global growth and profit expectations sank to an all-time low, while recession expectations were at their highest since the pandemic-fueled slowdown in May 2020

- C A P I T U L A T I O N  -- - They are saying...

Oil (2)

- Oil prices near $96 $94    $99 - Bounced off support and USD weakens

Coinage

- Big weekend for coins

- Bitcoin. ETH and others moving, 10, 20+%

--- Story over weekend that Coinbase shutting down affiliate programs

---- Wild speculation that COIN could be next to be under financial pressure

----- Short Squeeze getting out of positions - why the weekend rally?

Bank Earnings

- No use in trying to look at headline beats/misses

- Loan loss provisions down big then up big - over 1 year means that comparisons all screwed up

- Generally major banks looking pretty good still - NIM good and revenues looking healthy

- Concerns over economic slowdown and bad debt - co

- Could be they overshot to downside

- Goldman, Morgan look good - not much bad to say right now.

Builder Confidence

- Another story all together

- We know from Redfin - prices coming down, existing homes flooding markets, sells getting worried

- July NAHB Housing Market Index 55vs. 66 Briefing.com consensus; prior 67

- Builders confidence - see below - needs some discussion

NAHB

Mystery Chart

- This stock is up this year

- Well known, in DJIA

- TECH!

- Laggard for years...

- Earnings out last night - stock not doing so good

Mystery Chart

More Stocks...

- Single Stock ETF

- Interesting concept - but not clear who this benefits.

- Fees added to stocks that can be bought at low cost

- Probably less volume and liquidity than the stock itself

Netflix

- After several quarters of horrible performance (company and stock) company about to report July 19

- Could there be a gold mine in the advertising side? - Teamed up with Microsoft

- SIDEBAR: Heard someone talking about team ups/projects with MSFT - WHY? Because they are neutral and can be trusted as partner when building. (When did that happen?)

Oil taking a leg lower....

All eyes on CPI data and earnings this week

Home prices are on the chopping block..

 

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

- Earnings season begins this week

- Twitter Saga continues - or comes to an end?

- Euro hits parity

- Abortion pill companies heating up

Market Update

- Oil Crushed - down 20% since recent high

- German consumer confidence - historic lows

- IMF cuts its growth forecast for US to 2.3% from 2.9%

- CPI data tomorrow - everyone bracing for a big number

- VIX near 27 - not too high considering

Oil

- Oil prices near $96   $94  (looks like $93 support line - next stop if cannot hold)

- Airlines Up, Cruise lines up (could be some short covering into earnings and due to oil prices)

Robot Fish

- Robot fish that "eat" microplastics may one day help to clean up the world's polluted oceans, says a team of Chinese scientists from Sichuan University in southwest China.

- The black robot fish is irradiated by a light, helping it to flap its fins and wiggle its body. Scientists can control the fish using the light to avoid it crashing into other fish or ships.

- If it is accidentally eaten by other fish, it can be digested without harm as it is made from polyurethane, which is also biocompatible, Wang said.

Housing Update

- Americans are canceling deals to buy homes at the highest rate since the start of the Covid pandemic.

- The share of sale agreements on existing homes canceled in June was just under 15% of all homes that went under contract, according to a new report from Redfin.

- That is the highest share since early 2020, when homebuying paused immediately, albeit briefly. Cancelations were at about 11% one year ago.

- Higher mortgage rates and surging inflation are causing many potential homebuyers to reconsider their purchases.

- Total mortgage application volume fell 6.5% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Demand hit the lowest level in 22 years.

- Next Shoe to drop? Housing Prices on the chopping block....?

Big Move

- Electric vehicle startup Canoo (GOEV) said Tuesday Walmart has agreed to buy at least 4,500 of its upcoming electric delivery vans, in a significant win for the Texas-based vehicle maker.

- Shares of Canoo were up more than 70% in premarket trading after the news was announced to trade above $4 per share.

- Walmart has signed a "definitive agreement" to purchase at least 4,500, and possibly as many as 10,000, of its all-electric Lifestyle Delivery Vehicles, a small electric van designed for local delivery service, Canoo said.

Bicycles

- Peloton said Tuesday that it plans to exit all of its in-house manufacturing and instead will expand its current relationship with Taiwanese manufacturer Rexon Industrial, in a bid to turn the money-losing business around.

- Peloton Chief Executive Officer Barry McCarthy said this is a step for the company to simplify its supply chain and fix its cost structure, which is a top priority.

- "We believe that this along with other initiatives will enable us to continue reducing the cash burden on the business and increase our flexibility," McCarty said in a statement.

Something is Wrong

- London's Heathrow said it would cap the number of departing passengers at 100,000 a day this summer to try to limit traveler disruption as it struggles to cope with a rebound in demand.

- Airlines at Britain's busiest airport have already responded to a government appeal to cut capacity but Heathrow said it needed them to go further.

- It said airlines, baggage handlers and the airport could collectively serve 100,

From never going to stop - to let's get busy.

Yields plummet, oil sub-$100 and recession calls are everywhere.

A great island story and much more.

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

- New Month - 1/2 the year gone

- Crypto still gets no love - more lending firms halt withdrawals

- Investors looking for every excuse to sell

- THANK YOU for Donations - that was very nice of all of you who participated

- Back from Bahamas - Abacos - Guess who Andrew ran into?

Market Update

- Worst start for equity markets since 1970

- Worst start for bond markets EVER

- Last week BBBY and RH earnings miss and outlook spook investors

- Earnings season ahead - 7/14/22 JP Morgan starts it off

- Watch out - mortgage demand hits the skids

- WOW! Yields - WOW! Oil - Markets Go Crazy!

Recession fears

- Oil drops below $100 (remember how many were bullish?)

- Yields - what is happening? 10-Yr @ 2.79%

- Markets - WHAT A MOVE ON High-Multiple Tech (DOCU, RBLX, ZM, AFRM)

- HUGE move on tech - DJIA recovers from 600 point loss - potential bottom in the making here.

DEFLATIONARY = OIL

Oil Chart

DEFLATIONARY = Yields DOWN

10 Yr Treasury

Deflationary = Copper

- Copper fell to the lowest level in 17 months, with metals extending losses as global recession fears continue to damp the demand outlook for commodities.

Weekend - Abacos Bahamas

- Guess who Andrew ran into?

- Shout out to Nippers Bar on Great Guana Cay - Johnny and Janice

David Solomon

Tesla

- Disappointing quarter of deliveries, a record month of production, and now several weeks of downtime at multiple plants.

- Possible $400 million impermanent charge due to losses on Bitcoin

- Tesla will halt most production on its Model Y assembly line in Shanghai for the first two weeks of July, then stop the Model 3 line for a 20-day stretch starting July 18,

MonkeyPox

-WHO says not an issue

- THEN, The World Health Organization says "sustained transmission" of monkeypox worldwide could see the virus begin to move into high-risk groups, such as pregnant women, immunocompromised people and children.

- The virus has now been identified in more than 50 new countries outside the countries in Africa where it is endemic.

- Epidemic - Pandemic?

No Respect

- Grayscale, which manages the world's largest bitcoin fund, said it would sue the U.S. Securities and Exchange Commission after regulators turned down its bid to convert the investment vehicle into an exchange-traded fund.

- The SEC on Wednesday rejected Grayscale's application for a spot bitcoin exchange-traded fund, citing a failure by the investment manager to answer questions about concerns around market manipulation.

- The watchdog is concerned investors would lack sufficient protections under the Grayscale proposal.

Korea Krypto

- The nosedive in cryptocurrency markets has wiped out millions of dollars in funds stolen by North Korean hackers, four digital investigators say, threatening a key source of funding for the sanctions-stricken country and its weapons programmers.

- Do you think the drop is purposeful? Working to smack bad actors?

- One of North Korea’s cryptocurrency caches from a 2021 heist, which had been worth tens of millions of dollars, has lost 80% to 85% of its value in the last few weeks and is now worth less than $10 million

Mortgages

- Average loan size dropping as affordability becomes a problem

- "Overall purchase activity has weakened in recent months due to the quick jump in mortgage rates, high home prices, and growing economic uncertainty," said Joel Kan, an MBA economist. "The average purchase loan amount declined to $413,500,

Big slowdown in prices of base metals and ags. Not inflationary - more like deflationary.

An update on MonkeyPox, China, Oil and John McAfee.

The ever exciting G7 meeting - what actually got done anyway?

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Warm Up

- Script Flipping (Seems weekly)

- Notice a change in pricing? (Charts)

- Oil prices down a bit - no change at the pump

- 10Yr moves down after Fed rate decision - Still in a range

- Announcing the winner of the latest CTP - NIO

Market Update

- Down UP 5-8% last week (US Markets with a SHORT WEEK)

- Coming into the end of the quarter - we know what happens

- So many bears right now - hard to short into all of this negativity

- Commods, ags, base metals - rolling over hard (oil too)

- Bond Auction - not so good. International investors stepping back

- Russell Re-balance - Major Moves last week - one wild surprise - we have the chart

NEWS:

- The World Health Organization on Saturday declined to declare the unprecedented monkeypox outbreak that has spread around the world a public health emergency as of now.

- FWIW they also dragged their feet for months on COVID

Meanwhile

- Macau launched a third round of mandatory COVID-19 testing for its more than 600,000 residents on Monday.

- Casinos, while mostly deserted, are allowed to stay open, the city's government said, in a move to protect local jobs.

--- How does this make sense?

And China...

- Reopening schools in Bejing, Declating VICTORY!

- Meanwhile, Shanghai reported no new local cases - both symptomatic and asymptomatic - for June 24, the first time the Chinese economic hub had done so since Feb. 23

Russia - Debt Default

- Russia defaulted on its international bonds for the first time in more than a century

- The Kremlin, which has the money to make payments thanks to oil and gas revenues, swiftly rejected the claims, and has accused the West of driving it into an artificial default

- Russia's efforts to avoid what would be its first major default on international bonds since the Bolshevik revolution more than a century ago hit a roadblock in late May when the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) effectively blocked Moscow from making payments

- What does this mean?

WEIRD REACTION?

- Russia's ruble hit 52.3 to the dollar last Wednesday, an increase of roughly 1.3% on the previous day and its strongest level since May 2015.

- The ruble has actually gotten so strong that Russia's central bank is actively taking measures to try to weaken it, fearing that this will make their exports less competitive.

- The reasons are, to put it simply: strikingly high energy prices, capital controls and sanctions themselves.

G7 Meet-up

- Smile and back slapping

- Global hunger on the agenda, climate change

- China - ganging up against

- Commitment to Ukraine - whatever they need.

- The G7 partners are set to agree to ban imports of gold from Russia, a source familiar with the matter told Reuters. A German government source later said that leaders were having "really constructive" conversations on a possible price cap on Russian oil imports.

Phew...

- Ratings agency Moody's on Friday affirmed United States' rating at "Aaa", citing the country's emergence from the pandemic shock with "exceptional" economic strength.

- "Moody's expects the US economy and the sovereign's credit profile to remain resilient to shocks, including the current challenges to the global economy from high and persistent inflation, tightening financial conditions, and the Russian invasion of Ukraine," the ratings agency said in a statement.

- It maintained United States' outlook at stable.

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!

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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

- 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!

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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

- 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?

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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.

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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,