DHUnplugged #659: Summer Doldrums

Make it or break it time - earnings season is right ahead...

Fed heads - 8 speakers this week.

Tesla - blows away delivery estimates - what that means for profitability.

Change of direction for this currency? What the players expect.

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Warm Up

- It is make or break - Earnings season is here

- Hot weather and hot inflation

- 8 Fed Speakers this week

- CPI data Wednesday - expected to be soft - Base effect

- Summer Doldrums but a Buying Frenzy!

Market Update

- Resilient - that's the word

- Eco divergence as employment stays strong

- Tech in the lead - But Banks ALL pass stress tests

- Europe favored over US on valuations (new analyst call)

- Big best on rising USD being reversed

AI

- Party’s over for ChatGPT Plus subscribers as OpenAI announced it has temporarily disabled the Browse with Bing beta tool from its service.

- Apparently, people used the feature to completely bypass paywalls and consume content for free.

- If a user specifically asks for a URL’s full text,” the AI will fulfill the request, including displaying content from paywalled articles

- How did it avoid the paywall?

---- Some paywalls are simply pasted over” articles, ChatGPT could simply read the code rendering the text and display the content without a problem.

META

- New Threads is threat to Twitter

---Twitter has degraded severly since Musk took over (IN AH opinion)

- META stock on fire, 100 million accounts created already

- Twitter is threatening to sue (of course)

West Wing Scandal?

- White powder was found in the White House last week

- Turned out to be Cocaine...

- - Who leaved a stash of coke anywhere - much less the White House?

Best Stock Market

- This year (to date) ???

- Zimbabwe

---- 5, 10, 20% daily gains

- Up 800% YTD

- Argentina up only 100% in 2023

  Best Market 2023

FOLLOW UP

- Hyper-Inflation seems to boost stock markets

- Is it possible that this is the playbook that investors are using in US and other developed countries?

Change of Plans

- Apple is slowing its headset production and also slowing the rollout

--- By appointment only?

- Goldman is in talks to offload Apple credit and savings products to Amex

---- Goldman trying to rid itself of bad bet on personal/retail finance endeavor under CEO Solomon.

Jobs/Employment

- End of June: US weekly jobless claims post biggest drop in 20 months as economy shows stamina

- July saw a slight uptick in initial claims

- ADP report - HOT - 450k new jobs added to payrolls

- BLS official disappointed - 200k added but Unemp Rate ticked down to 3.6%

-- Jobs report still solid down to wage growth

---- Last 4 months added near 1M new jobs - not a jobs markets that is seen as being held back by rates

Fed Rate Plans

- Since we last spoke.... Odds are now 83% +/- of a rate hike in July

- 10 year treasury over 4%

- 2 year treasury over 5%

- Inversion of 2/10 worst since 1980s (and holding for LONG time)

-- Powell's recent commentary discussed potential for 2 more hikes and acknowledged that the inflation rate will not come to 2% target until at last 2025

------ Note - they have never nailed a prediction for as long as time itself

Meanwhile

- Rates do not seem to be bothering many...

--- Consumer Confidence hits 17-month high

--- Housing seems to be coming back from brief dip

- - Many of the homebuilders shares are at ATH

China Economy - Another story

- PPI inflation shrank to -5.4% below expectations

- Industrial profits are in bad shape

- Factory activity is in contraction for last few  months

- Government pushing stimulus - targeting housing

TESLA

- Big print on deliveries