Yesterday’s News

You can skip this note if you were bolted to your seat yesterday watching the market…yet for those enjoying a spritz--it was the 2nd time in history since inception in 1979 that the small-cap Russell 2,000 gained 3%+ while the S&P declined on the day. Fun fact: 10/10/2008 was the other day. Not so fun fact for many: The Mag 7 lost $600 bn of market cap on the day. It was 48 days since all Mag 7 names closed red on the same day, the longest streak in > 10 yrs. But don’t feel too bad for long investors…despite their 3-4% pullbacks in Big Tech, AMZN, META, GOOGL, MSFT, + NVDA are all still up +1-5% in July so far. Why? Carry trade, per my podcast co-host Ben Brey who is talking about it on Wall Street Bears today, and BBG.

Consumer sentiment fell to an 8-mo low due to high prices.

An increase in T-bill sales is heightening concern about funding strains as the Fed unwinds its balance sheet, per BBG. BofA shared an interesting chart shown here—their private clients are in T-bills and not UST bonds.

Yesterday’s lower US inflation with today’s PPI growth data points to a Goldilocks economy, per Axios. Plus, Schwab is showing that inflation-adjusted earnings is still green, so people may continue to spend.

Winners in the banking sector that reported? JPM with record profit (strong M&A advisory) and a multibn-dollar gain tied to a Visa share exchange. Citi with strong equities trading revenue that beat estimates, but it turned to a loser as it warned on higher costs. Wells Fargo, the bank that keeps tripping on its own untied shoe laces, dropped on a NII miss and slowing cost-cutting efforts.

Pepsi warned that consumers are more price conscious after years of price hikes, per the WSJ. Why do I wonder if it’s not an Ozempic-related impact on Flaming Hot Limon Cheetos?

The most public dumpster fire here in the US (Boeing) told 737 Max customers to expect further delays on deliveries (3-6 mo), per BBG.

They’re postponing their robotaxi event from Aug to Oct, per BBG. Plus, they’re coming out with a new Model 3 long-range variant at $42,490 ($5K lower than the all-wheel drive version), per Reuters.

Analysts expect TSM to give a guidance upgrade next week when the co reports, per BBG.

Investors are considering the UK a potential safe haven, as political uncertainty kicks into high gear in the US and the EZ, per Reuters. They used to be the global dumpster fire across the pond…and now they’re the safe haven.

China’s export growth came in higher than forecasts (+8.6% in USD terms y/y). Imports unexpectedly were lower due to their weak economy, per BBG and the FT. So, they’ve got a record trade surplus figure. I just listened to an ASR webinar. Consumers are upping their savings, paying down debt, and consuming less still. Their credit growth hit a fresh record low in Jun as folks aren’t borrowing, and loan growth hit a new low.

Yesterday's yen rally probably was driven by a BOJ ¥3.5T intervention, per BBG. It faded following rate checks, per BBG.

Did they just find out? Someone downloaded records of customer calls and texts from their Snowflake cloud platform for SIX MONTHS in 2022. If you care about someone publicizing who you’re calling, then you should be worried…because the stolen data shows that (politicians, journalist sources, relationship cheaters, activists, etc.). Sounds like if you’re a SNOW investor, you should find the exit door. This isn’t the first problem.