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Hot Tips
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April 8, 2024
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Tesla Cancels Model 2,
a key part of the bull story for (TSLA). Elon Musk says “Not so fast” and instead highlights the company’s move into robotic self-driving cars. Don’t be so dismissive, as Waymo completed an eye-popping 100,000 robotic taxi rides in San Francisco in December, many with thrilled first-time users. The stock held up incredibly well on awful news indicating that it believes Elon and not the media. Buy (TSLA) on dips.
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Boeing Boss Gets $33 Million Golden Parachute,
after infusing a corrosive cost-cutting culture, putting dividends and share buybacks before quality, and nearly destroying a 100-year-old brand. It also nearly wiped out its largest customers, Alaska Airlines (ALK) and United Airlines (UA). This is truly a flaw in the American capitalist system.
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Is Gold the New Cocoa?
An upgraded gold price forecast for 2024 from a raft of analysts drew an unexpected follow-up question this week from market participants. The enquiry was: "Can gold 'go cocoa'?" Cocoa prices have more than doubled since the start of 2024 due to poor harvests in Ivory Coast and Ghana. Meanwhile, spot gold hit record highs on five previous trading sessions as investors jumped in looking for exposure to the metal used to preserve wealth. Buy (GOLD), (GLD), (GDX), and (NEM) on dips.
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China Continues Record Gold Buying,
soaking up Central banks bought a record 1,082 metric tonnes of gold in 2023. The Bank of China bought a record 735 tonnes of gold in 2023, two-thirds of which were purchased through covert third-party middlemen. An additional 1,411 tonnes, likely to bypass a collapsing Yuan, and a whopping 228 tonnes in January 224 alone. This is what delivered the barbarous relic’s decisive upside breakout from a three-year trading range. This dwarf’s the record 1,082 metric tonnes of gold global central banks bought in 2023. The world gold market has been taken short and prices will continue to rise.
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Monday Eclipse Sparks Travel Boom,
as some parts of the United States that fall in the "path of totality" see unprecedented demand for lodging from eager Americans waiting to catch a glimpse of the celestial event.
The moon will blot out the sun for millions of people in Mexico, the United States, and Canada. Airbnb (ABNB) listings along the U.S. path of totality, or the narrow strip stretching from Texas to Maine from where people will be able to view the sun's corona, have seen occupancy levels skyrocket to nearly 90%, the vacation rental firm said. Occupancy for all active rental listings across the path in the United States, Canada, and Mexico was at 92.4% for the night of April 7, up sharply from about 30% a few days prior. No, it’s not the end of the world- it just feels like it.
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April 5, 2024
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Nonfarm Payroll Jumps by 303,000 in March,
almost double what was expected. The headline unemployment rate drops 0.1% to 3.8%. Wages rose 0.3% for the month and 4.1% from a year ago, both in line with Wall Street estimates. Health care led with 72,000 new jobs, followed by government (71,000), leisure and hospitality (49,000), and construction (39,000). Interest rate cuts fade into the future.
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Investors are Piling into Cash,
with Money-Market funds getting $82 billion in a week through Wednesday. Investors are still flocking to cash funds, and history suggests redemptions won’t begin until a year after the Federal Reserve starts cutting interest rates.
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Commodities Trading Firms Harvest Record Profits,
some $104 billion in 2023. The surprise increase from 2022, when the fallout from the war in Ukraine pushed up prices and supercharged profits, was driven by a wave of new entrants into the sector — including tech-focused traders and hedge funds — and rising returns from power trading activities. The figures reflect profits from the entire sector, including independent traders, banks, hedge funds, and national oil companies. This year will be even better.
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Oil Continues to Bubble of Tight Supplies,
supported by geopolitical tensions in the Middle East, concerns over tightening supply, and expectations about demand growth as economies improve. I’m keeping my longs in (XOM) and (OXY) and looking to pick up (COP) and (FANG).
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Lithium to Stay in the Dumps,
as long as EVs are suffering a nuclear winter on sales. Tesla is offering deep discounts on inventory that is at record highs. Avoid (ALB). Don’t confuse “gone down a lot” with “cheap”.
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April 4, 2024
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Weekly Jobless Claims Jump to 221,000, up 9,000,
a two-month high. The weekly claims report from the Labor Department on Thursday also showed fewer people remaining on jobless rolls towards the end of March, suggesting that laid-off workers continued to find work, though not as easily as two years ago. There were 1.36 job openings for every unemployed person in February compared to 1.43 in January. Worker shortages persist in industries like construction.
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US Dollar to Stay Higher for Longer,
as a result of the higher for longer Fed tilt on interest rates. High-yielding currencies are always the strongest. The buck is up 3.3% this year against a currency basket.
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Foreign Investors Flee Tokyo,
offload a net ¥1.18 trillion worth of stocks during the week of March 29 - their largest weekly net disposal since Sept. 29, 2023, If the yen turns, it will demolish local stocks. A cheap yen has been powering Japanese stocks for the last three years. Only the Bank of Japan knows for sure.
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Boeing Pays Alaska Air $160 million for Delivery Groundings.
An Alaska Airlines-operated MAX 9 jet experienced a mid-air cabin panel blowout in January, which led the U.S. aviation regulator to order a temporary grounding of 171 jets for inspections. The font of bad news from Boeing continues. Avoid (BA).
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Levi Strauss Soars by 20%,
on cost cutting, more direct to customer says, and rising earnings. The DTC channel accounted for nearly half of the total revenue in the first quarter ended Feb. 25, up from 42% in the prior quarter. When was the last time your heard anything about San Francisco-based (LEVI)?
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April 3, 2024
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ADP Comes in Hot at 140,000,
showing that private employment is as strong as ever. Wages were up 5.1% YOY. The ADP National Employment Report is an independent measure and high-frequency view of the private-sector labor market based on actual, anonymized payroll data of more than 25 million U.S. employees.
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JOLTS Job Openings Remain Strong at 8,756,000,
giving further confirmation of the health of the economy, says the Bureau of Labor Statistics.
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Toyota Sales Soar by 20% in Q1,
closely followed by Honda at 17.3%. General Motors delivered a pitiful 1.5% decline. Hybrids are the name of the day, outselling EVs and ICE cars. Toyota played it safe and won, at least for now.
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Disney Wins Proxy Fight with Nelson Peltz,
retaining complete control of the board. It’s a defeat for Peltz and a stamp of approval for the company’s board and CEO Bob Iger’s efforts to turn around the company. Nelson can now sell his shares for a big profit, up 30%.
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General Electric Breaks Up into Three Companies,
bringing an end to the 132-year-old conglomerate, one of the most valuable companies in the US. Jack Welch’s disastrous cost-cutting strategy sowed the seeds of destruction. The industrial giant's aerospace and energy businesses began trading on the New York Stock Exchange as separate entities more than a year after GE spun off its healthcare business. (GE) RIP.
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April 2, 2024
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PCE Comes in Hot at 0.3%
for February, and 2.8% YOY, taking bonds. Personal Consumption Expenditures give an early read on inflation trends that the Fed loves. The economy is clearly much hotter than traders understand. Consumer spending shot up 0.8% on the month, well ahead of the 0.5% estimate. Personal income increased 0.3%, slightly softer than the 0.4% estimate.
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Tesla Sales are Disastrous,
as expected. Shares drop as much as 6.7%, extending the biggest rout in S&P 500. Analysts slashed projections in recent days, but not by enough. The Berlin factory was shut down and competition in China is ramping up. Still, Tesla produced 46,561 more cars than it sold in the quarter. For what it’s worth, BYD sales in China were even worse. The bottom for (TSLA) is fast approaching.
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ISM Manufacturing PMI Soars,
reaching an 18-month high and showing expansion at 50.3. Readings above 50 for this index indicate an expansion in activity while readings below 50 indicate contraction. Demand was positive, output strengthened, and inputs remained accommodative. Bond market look out below.
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US Construction Spending Falls,
0.3% in February according to the Commerce Department. Economists polled by Reuters had forecast construction spending rebounding 0.7%. Construction spending increased 10.7% year-on-year in February. Recent government data showed there were 757,000 housing units for sale in the fourth quarter, well below the 1.145 million units before the COVID-19 pandemic.
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Google to Delete Browsing Data,
after a class action settlement over privacy. (GOOG) had been using the data to direct marketing efforts. The development will have minimal impact on earnings or the share price as most customers will not bother to opt out of data sharing. Buy (GOOG) on dips.
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