Today’s Trade

Regardless of your politics, investors saw the “Trump trade” go full speed ahead after the rally attack (e.g., USD up, UST curve steepening, bitcoin rallying), per BBG and BBG. GS is loving it—their trading unit reported numbers that were on fire.

US fundamental L/S hedge funds brought both gross and net down. On a 1-yr lookback, they are low at the 15th and 21st percentile. HF net sold domestic TMT stocks for the 4th straight week (7 of the last 8), via both long and short sales. Quant net exposure, though, is up—but mostly on the short side.

Apple's sales in India increased by +33% to ~$8bn last year, as consumers shifted away from China, per BBG.

Don’t want to hear it. NVDA investors are complaining that they face a difficult situation-- having too much expensive stock in their portfolios that could tank returns on a reversal, per Reuters. That’s the game, bruh. Take some profits, hedge your risk, or throw caution to the wind. But don’t complain.

Luxury stocks were down after Burberry suspended dividends and replaced its CEO. Swatch earnings disappointed.

A close techie friend lamented that “tech isn’t doing well in general”. Sounds like they’re sucking it up and wondering when pooch massages and unlimited smoothies are coming back. They’re not alone. The labor market is weakening.

Researchers are noting they’re close to building AI via OpenAI that can perform human-level reasoning. Codename? "Strawberry" per Axios.

GOOG may buy cybersecurity startup Wiz for $23bn.

Sure, small caps. You had a little fun last week. But you’re still behind in the game…and it’s not clear whether your fun will end this week.

Their stocks mostly lower Monday. Hang Seng (1.52%), Shanghai +0.09%, Shenzhen (0.59%), ChiNext (0.63%) Why? The country’s 2Q24 growth came in worse than expected, per the FT. Also, I’d expect the “Trump trade” is having an effect as well. Moreover, new home prices fell despite the gov’s rescue efforts, per Reuters. Most interestingly, China state media warned that institutions buying Chinese treasury bonds are shorting the economy, per Reuters. What’s Xi gonna do? We may hear at the Third Plenum. China’s June oil demand fell > -8% y/y to 13.7 million barrels a day.

We’ve reported on container freight rates popping. Well, today it costs $9k to move a 40-ft container from Shanghai to NY. It’s a lot less than covid-time ($16k), but it’s at inflationary levels…due to fewer Suez crossings, Asian port disruptions, and higher demand from restocking.

I wonder who may be willing to take your money to take advantage of all those short-sighted public markets folks and lock it up for a decade or more?