DHUnplugged Podcast

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...

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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!

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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!

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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.....

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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.

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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!

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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.

A week off and so much to catch up on. Need to know more about John's bday bash.

Inflation much - yup we have a large segment to review - CPI and PPI out this week.

New from the Mile-High-Club and Elon's latest craziness.

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

- March - UP... First of the year

- John Birthday Party (Had at "CLUB")

- China clamping down, Inflation still rising and Congress get COVID

- Stock Splits - More companies trying to play that game - latest Shopify and Gamestop

- Elon Musk - On, Off The Board of Twitter in record time

Market Update

- SAME NEWS Yields - inversion across much of curve

- Earnings season gets underway this week

- Russia Defaults on Foreign Debt (some)

- Oil sliding lower on massive release of SPR from several countries

---- NEWS: IEA to release 120 million barrels over 6 months

- 30 Year Mortgage rate hits 5.25%

Commentary: Surprising that Yields keep moving higher.  Yes, Fed and Inflation, bit weakness in markets not drawing in either. First part of April (quarterly rebalance) should have moved from stocks to bonds - but not good look for risk assets.

JCD Birthday - Curry/Tina Dinner

- So, listening to No Agenda from Sunday - you heard we had dinner.

- If you listen, Adam's commentary on N/A went something like this: Well, we ended up in Ft Lauderdale and "since we had nothing better to do, we call up the Horowitz's"  (Time stamp - 12:51)

- Went to club, I want to have a nice bottle of wine and we order a 2017 Silver Oak Cab (2)

- We all eating and drinking - except Adam  - full bowl of conch chowder and full glass of wine not touched for entire evening

Think 0.50% Hike is bad?

- Sri Lanka's central bank doubled its key interest rates on Friday, raising each by an unprecedented 700 basis points to tame inflation that has soared due to crippling shortages of basic goods driven by a devastating economic crisis.

- The heavily indebted country has little money left to pay for imports, meaning fuel, power, food and, increasingly, medicines are in short supply.

Earnings Season Pre-Report

- First up are the transports and the financials. (This week's highlights - Delta and JPM)

- It looks as if the expectation is for airline losses to get better, although still showing losses.

- Financial expectations are mixed, those with reliance on trading and fixed income issuance are expected to show a significant reduction (JPM MS, GS)  in earnings from a year ago.

- Some of the consumer related names look to being faring better - according to analyst predictions. (BAC)

Ukraine/Russia

- Reports that Ukraine holding up pretty well, massive Russian Casualties

- More reports that Russia looking to call back retired military to restock forces

- Europe backed down from immediate block of Russian Oil

- China not buying more oil - but not sanctioning either

- Food costs up on Ukrainian Wheat and other export problems

Russian Default

- Russia has defaulted on its foreign debt because it offered bondholders payments in rubles, not dollars, credit ratings agency S&P has said.

- Russia attempted to pay in rubles for two dollar-denominated bonds that matured on April 4, S&P said in a note on Friday. The agency said this amounted to a "selective default" because investors are unlikely to be able to convert the rubles into "dollars equivalent to the originally due amounts."

- According to S&P, a selective default is declared when an entity has defaulted on a specific obligation but not its entire debt.

China Supply Chain - Internal

- Chinese electric vehicle (EV) maker Nio said on Saturday it has suspended production after the country's measures to contain the rec...

Markets getting a kick out of Biden's lean in and walk back.

Will Smith - what was that?

Yields invert - 10Year hits 2.5%

Oil crumbles on the China lockdowns - everything is backasswards.

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Warm Up

- Strong Finish for the month

- Biden leans in and walks back

- North Korea stirring the pot

- China - more lockdowns (Supply chain going to break)

- LIMERICKS!

- Announcing the Winner of the CTP for URA

Market Update

- Yields - inversion across most of curve

- Shrugging all hots off like Chris Rock - What a pro... (End of stand up)

- Crude oil drops 7% on China Shanghai lock-down news

- Apple says big drop in output needed - stock barely budges (ends higher on  the news)

- Lots of talk about taxing unrealized gains as well as moves against buybacks

- Strong month - markets up > 3% (Looks like window dressing and short unravel)

---*** KRI HITS +6 this morning - OVERHEAT

-- 2/10 invert for a minute today (Cease Fire = higher chance of Fed rate hike)

KRI Update

- Was +6 this morning (Closed at +5)

- The overall market, as measured by the KRI algorithm, is nearing a critical level of being overheated. The potential for a key reversal is high over the next few days.

- Caution with respect to long side is warranted. Evaluate long positions, tighten stops and consider reducing overall long exposure or hedge out risk in the near-term.

Will Smith - Real or Fake?

Markets Moving on this?

- Russia is prepared to allow Ukraine join EU as part of ceasefire talks as long as it doesn't join NATO

- Something off with markets - rallying like cease fire will fix all... But:

- - Quicker rate hikes more likely

--- No change in impact from oil prices

Shanghai Lockdown

- Shanghai's city government said on Sunday all firms and factories would suspend manufacturing or have people work remotely in a two-stage lockdown over nine days, after the city reported a new daily record for asymptomatic COVID-19 infections

- Oil Dropped big time on this ans some softening

- Sapping fuel demand further, public transport, including ride-hailing services, will also be suspended during the lockdown.

Fighting Words

- U.S. President Joe Biden said that Russia's leader Vladimir Putin "cannot remain in power" in Poland over the weekend

- Biden's comments on Saturday, including a statement earlier in the day calling Putin a "butcher"

- Frantic walk back after the comment - but it seems that most buying the twist of what was said.

M&A News

- HP Inc said on Monday it would buy audio and video products maker Poly (aka Plantronics) for $1.7 billion in cash, a move that would help it take advantage of the electronic products boom sparked by hybrid working.

- The deal offers $40 for each share of Poly, a premium of about 53% to the company's last closing price.

Come on...

- Huawei Technologies on Monday reported asset sale gains helped lift profit 76% in 2021, turning in its first set of results under Chief Financial Officer Meng Wanzhou since she returned to China last year after nearly three years' detention in Canada.

- In its biggest-ever annual gain, net profit rose to 113.7 billion yuan ($17.8 billion), the smartphone and computer giant said.

- Revenue skidded 29% to 636.8 billion yuan, in line with Huawei's previous forecast in December

---- Asset gains are legit, but need to be stripped out (Bad reporting)

Meanwhile

- Apple reportedly cutting production on Airpods and some iPhones - demand issues

- Apple is preparing a hardware subscription service for iPhones that could launch as soon as the end of this year, Bloomberg reported Thursday.

One of the best week's since....

Markets continue in rally/rip mode as "hope" that Ukraine beats Russia.

China stimulus hopes propel tech shares to the moon

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Warm Up

- Massive Rally - Just to Suck you back in to this Crapfest (defined last show)

--- Big winners were the biggest losers over the latter part of last week

---- GS Short basket flew - 20%, Chinese Stocks > 35% last week

- Usually see these kinds of moves - ONLY in Bear market - Need to be picky about positions...Opps!

- The nature of bear markets - big swings with VIX above 25!

- Russia - COUP???

- LIMIRICKS!

Market Update

- Get em' - Oversold, pent up, rally after Powell's 0.25% hike

- Fast Forward and he is hawkish again - saying 0.50% at any meeting is possible

- Big moves for Boeing - Plane down in China

WHAT A WEEK!

- Market's "V" again off of the hope that Jay Powell and Friends will take it easy on the  rate hikes.

- 0.25% and every meeting this year is live.

- During press conference he seemed to put many at ease, but was still very hawkish.

- He said - He didn't see an elevated chance of a recession next year (sparked markets instantly higher)

- Best week for over 2-years, markets in green for MTD (HUGE MOVE on individual names)

- China stocks rocket! KWEB up 35% for the week (index of Chinese tech names)

THREE NUMBERS TO RUIN YOUR DAY:

- $110 (oil)

- 2.30 (10 Yr)

- 0.38 (2/10 spread)

2/10 Spread

Yield Curve Flattening

And Then -

- Rates - Spike - - current 10 yr > 2.2%, Oil moving up again

- Inflation in Germany - PPI  > 25% YoY

- War still raging

- Food issues starting, more supply chain issues .....

- So what is next catalyst for markets (Earnings?)

- EU considering Russian Oil Embargo (Self - mutilation)

Rates - More

- St. Louis Fed's Bullard says the central bank should raise rates above 3% this year

- As the lone dissenter at this week's Fed meeting, Bullard said in a statement that he would like to see the central bank's benchmark interest rate boosted above 3% from the near-0% level where it had stood.

- Bullard was the only FOMC member to vote against the move, stating that he would have preferred a rate hike of 0.5 percentage point, or 50 basis points. He added that the Fed also should have started the process of reducing the nearly $9 trillion in bond holdings it has accumulated over the past 14 years.

More to Ruin your Week

- National Security Advisor Jake Sullivan at press conference says President Biden and EU leaders will decide Thursday what they should do if Russia uses a nuclear, chemical, or biological weapon in Ukraine

- Good News: A Kremlin spokesperson apparently out stating Russia would only use nuclear weapons if its very existence were threatened

- 2 comments on Nukes that are not needed.

Russian Coup?

- A group of Russian elites are allegedly conspiring to overthrow Russian President Vladimir Putin and “restore economic ties” with the West, according to Ukrainian intelligence.

- Who is Putin's food taster?

- Crazy info-wars going on....

Where to?

- China says Taiwan, which it views as a breakaway province to be brought back to the fold, by force if necessary, is the most sensitive and important issue in its relations with the United States.

- "Some individuals in the United States are sending the wrong signals to pro-independence forces in Taiwan, and that's very dangerous," Xi told Biden on a video call.

- If the Taiwan issue is not handled properly, it will have a subversive impact on the relationship between the two countries."

China Plane - All Lost

- China Eastern Airlines will ground all Boeing (BA) 737-800 jets as some...

Down and down she goes...

Inflation hot, but the Fed is on tap - Rate decision Wednesday.

Odd action in the VIX ETF - let's take a look.

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

- Technical term - Crapfest

- Nuclear Mentions freaking out people (and markets)

- No end in sight for this war...

- QQQ - NASDAQ 100 - Official 20% Correction

- CORN, WHEAT, AGS, OIL - All start this week well off those highs

- Big talks - China, Saudi Arabian, Venezuela, Brazil - Concern growing that China may help Russia

- Another VIX dilemma

Market Update

- EVERY RALLY SOLD (But Setting up for another EPIC SHORT SQUEEZE - which may also be sold)

- NASDAQ off 20%+ from highs. If history is a guide, may not be quite done yet

- Oil off big! Everyone was talking energy...

- Looking for a bottom - seems like a bad idea

- Market Psychology getting pretty ugly (Fear Greed Index)

- Supply Chain  - Worse than ever - DELL computer - June 24th (Optiplex)

- Senate passes $1.5 trillion bill to keep Govy open and Ukraine

- Raskin withdraws nomination to Federal Reserve board

Starting off HOT

- United Nations Secretary-General Antonio Guterres on Monday sounded the alarm over Russia raising the alert level for its nuclear forces after invading Ukraine, describing it as a "bone-chilling development."

- "The prospect of nuclear conflict, once unthinkable, is now back within the realm of possibility," Guterres told reporters, and repeated his call for an immediate cessation of hostilities.

VXX - WOW

- Barclays stops the creation of shares due to some reason.

- Shares can be traded but less liquidity and wonder why anyone would want to use this vehicle

- LOTS of talk about PUT buying on the name on Monday

-  VXX - HALTS up 20%, 30%, 40% throughout day

- Market games in full play (no reason for this)

Fed Day Tomorrow

- What will Jay Powell Do?

JCD QUIZ

- How much is Facebook off its recent High in September 2021

- What about Zoom Media?

- Bevy of names that are down really hard - keep a watch on basing patterns - could be good setups for L/T buys

Fear Greed Index

Fear/Greed

Hint, Hint, Wink, Shove

- Deutsche Bank has said it will wind down its Russia operations — a major U-turn that sent shares higher Monday.

- In an announcement released late Friday, the German bank said it was joining a host of international peers in exiting the country in response to its invasion of Ukraine and resultant operational restrictions.

- "Like some international peers and in line with our legal and regulatory obligations, we are in the process of winding down our remaining business in Russia while we help our non-Russian multinational clients in reducing their operations," the bank said in a statement announcing the departure.

- Good boys  and girls - now we will buy your stock (Stock up 8% on news)

If the War wasn't enough

- China COVID count is up BIG

- Hong Kong seeing record numbers of something

- China shutting/locking down areas again

--- This is a big problem for prices, supply chain

---- This is good for the transition to the selective isolationism - need to bring manufacturing back home

- Shenzhen, the biggest city in the manufacturing hub of Guangdong province, told all businesses not involved with essential public services to suspend production or have employees work from home for a week starting Monday.

Tesla/Musk

- Chief Executive Officer Elon Musk said on Sunday the U.S. electric carmaker and his rocket company SpaceX are facing significant inflationary pressure in raw materials and logistics.

More Inflation

- Uber is adding a surcharge on fares and deliveries in the U.S.