Avsnitt
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The dreaded downgrade.
Biden's health in the spotlight.
The big and beautiful Tax bill making its way through the sausage factory
PLUS we are now on Spotify and Amazon Music/Podcasts!
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Warm-Up
- The dreaded downgrade
- Biden's health in the spotlight
- Tax bill making its way through the sausage factory
- China continues to stimulate
Markets
- Yields - moving up after worrying signs for US debt levels
- Stocks posting big gains for May
- Bitcoin surges past $100k
- Our debt load is untenable - great chart to consider
The Big Beautiful Bill
- The bill eliminates taxes on tips and overtime.
- The bill achieves "no tax on social security" by increasing deductions for seniors on the program.
- The bill eliminates several green energy spending programs and ends the EV tax credit early.
- The bill makes auto loan interest tax deductible.
- The bill raises the debt ceiling by $4 trillion.
- The bill raises the State and Local Tax Deduction to $30,000 for people making $400K or less.
- The bill makes changes to the IRS free tax filing program, pending review by a task force.
- The bill includes tax on college endowments and private foundations.
- The bill includes reforms for how pharmacy benefit managers do business with the government.
- The bill creates a new savings account for children, and $1000 of funding will be provided.
- The bill raises the child tax credit to $2500 from $2000.
USD DEBT
Moody's
- U.S. Treasury yields spiked on Monday after Moody's downgraded the U.S.' credit rating, citing fiscal concerns.
- That brings it down one notch from Aaa — the highest score — to Aa1
- The first time since the initial rating back in 1919 that Moody's made a change
- Interesting timing - in the middle of a big spending package process -
--- maybe they are sending a message
-"This is a major symbolic move as Moody's were the last of the major rating agencies to have the US at the top rating," Deutsche Bank analysts said in a note.
Market reaction
- Futures fell in late trade after the close of the markets- when it was announced
- Bonds - long end moved.
--- 30 yr treasuries up over 5%
---- 30 yer mortgage rates over 7%
- Markets - yawned and turned on the open after a 1.5% love lower on the futures
Bessent reaction
-Treasury Secretary Scott Bessent said in an interview on NBC News' "Meet the Press" that Moody's Ratings were a "lagging indicator" after the group downgraded the U.S.' credit rating by a notch from the highest level.
-"I think that Moody's is a lagging indicator," Bessent said Sunday. "I think that's what everyone thinks of credit agencies."
- He asserted that the downgrade was related to the Biden administration's spending policies
- Is that right?
China - Stimulating
- China cut its key lending rates by 10 basis points on Tuesday, as Beijing ramps up efforts to boost its economy at a time when trade tensions threaten to derail growth.
- The People's Bank of China trimmed the 1-year loan prime rate to 3.0% from 3.1%, and the 5-year LPR to 3.5% from 3.6%.
US Steel still in play
- Nippon Steel plans to invest $14 billion in U.S. Steel's operations including up to $4 billion in a new steel mill if the Trump administration green lights its bid for the iconic U.S. company, according to a document and three people familiar with the matter.
- Under details of the plan included in the document, the company will plow $11 billion into U.S. Steel's infrastructure through 2028. That includes $1 billion in a green field site, which is expected to grow by $3 billion over the following years and has not been previously reported.
- There is a deadline of May 21st for a national security review - then T... -
- More Deals - So many deals! We are so Amazing with the Deals!
- Investors turn hot on stocks - like nothing happened!
- Apple making moves - so smart
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
- More Deals - We are so Amazing with the Deals!
- Investors turn hot on stocks - like nothing happened!
- Apple making moves - so smart
- Microsoft layoffs - Important information on this if you are one of these
Markets
- HUGE move as tariffs paused for 90 days on China
- Right on cue - most negative sentiment in decades then the squeeze
- China - we have something - Maybe Phase 1.5?
- Drug companies under pressure
- Google update - Lots of headwinds
Announcing the Winner of the Micron (MU) CTP
Reconciliation BILL - Draft
- House Republicans release text of large reconciliation bill which includes extension of 2017 tax cuts for all income levels, spending cuts (Medicaid and green energy spending), energy reform, immigration reform, and a debt ceiling increase of $4 trillion
- The bill eliminates taxes on tips and overtime.
- It achieves "no tax on social security" by increasing deductions for seniors on the program.
- The bill eliminates several green energy spending programs and ends the EV tax credit early.
- The bill makes auto loan interest tax deductible.
- The bill raises the debt ceiling by $4 trillion.
- The bill raises the State and Local Tax Deduction to $30,000 for people making $400K or less.
- The bill makes changes to the IRS free tax filing program, pending review by a task force.
- Bill includes tax on college endowments and private foundations.
AI Diffusion Rule Repeal
- Wasn't the idea to stop chips from being sold to bad actors?
- Good news for NVDA, Intel, AMD etc...
- Is this good news?
Reality Bites
- A quick weekend meeting and all good
- 90 day pause
- The tariff rate on imported goods to the U.S. from China has been slashed from 145% to 30%, and the tariff rate on imported goods from the U.S. to China has been cut from 125% to 10%
- The Art of the ????
---- So confusing that it is hard to imagine that anyone really knows what is going on at this point.
What Do We Do With this:
- Commerce Secretary Howard Lutnick said Sunday that the 10% baseline tariff rate on imports from other countries is likely to "be in place for the foreseeable future," echoing President Donald Trump's comments from days prior.
- They also said no change in tariffs not matter what China does, then maybe a reduction 80% maybe
- FAKE PROMISES, Fake News????
China Shipments
- China's exports surged in April even as shipments to the U.S. plunged as businesses bore the brunt of prohibitive U.S. tariffs that kicked in last month.
- Exports jumped 8.1% last month in U.S. dollar terms from a year earlier
- Imports slumped by 0.2% in April from a year earlier (much less that expected)
- China's outbound shipments to the U.S. plunged over 21% in April year on year, while imports dropped nearly 14%, official data showed.
How Much?
- In April 2025, the U.S. government collected approximately $16 billion in net customs duties. This was a significant increase from the previous year, driven by higher tariffs on Chinese goods and other imports
- The budget results indicate that the U.S. collected just over $500 million a day from tariffs in April
Income Received
Inflation Update
- Somehow, not moving (yet)
- Total CPI was up 0.2% month-over-month (Briefing.com consensus 0.3%) following a 0.1% decline in March. On a year-over-year basis, total CPI was up 2.3%, versus 2.4% in March. That is the smallest 12-month increase since February 2021.
- Core CPI, which excludes food and energy, -
Saknas det avsnitt?
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Good ECO/Markets = TrumpBad ECO/Markets - BidenCTP for Micron is underwayAI wins a horse raceNews from OmahaPLUS we are now on Spotify and Amazon Music/Podcasts!Click HERE for Show Notes and LinksDHUnplugged 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 TwitterFollow Andrew Horowitz on Twitter Warm-Up- Good ECO/Markets = Trump- Bad ECO/Markets - Biden- CTP for Micron is underway- AI wins a horse race- News from Omaha- India/Pakistan - India stikesMarkets- Some Earnings Color- S&P breaks it streak this week- KRI +4, +5 (Spearman +100)- Currency interventions happeningInteresting Timing- Skechers U.S.A., Inc. the third largest footwear company in the world, today announced that it has agreed to be acquired by 3G Capital, a global investment firm built on an owner-operator approach to long-term investing.- 3G gets discount as tariffs are softening price- Helped to move the other names in the space higherHeads I Win....- President Donald Trump took credit for the "good parts" of the economy in an exclusive interview with NBC News airing Sunday, but said that the "bad parts" are former President Joe Biden's economy.- "Ultimately, I take responsibility for everything, but I've only just been here for a little more than three months," Trump said.- "The tariffs have just started kicking in. ... The tariffs are going to make us rich. We're going to be a very rich country," he added.In terms of shortages:- "I don't think a beautiful baby girl needs – that's 11 years old – needs to have 30 dolls," Trump said.- "I'm just saying [children] don't need to have 30 dolls, they can have three, they don't need to have 250 pencils, they can have five," he added.- But, Mira Lago has 58 bedrooms, 33 bathrooms, a 29-foot-long (8.8 m) pietra dura marble-top dining table, 12 fireplaces, and three bomb shelters.---WHAT?Ford Earnings- Ford Motor beats by $0.14, misses on revs, co suspends FY25 guidance; says business is strong, adjusted EBIT tracking within prior guidance, excluding new tariff-related impacts- Based on what the company knows now, and its expectation of how certain details and changes will be resolved related to tariffs, the company estimates a net adverse adjusted EBIT impact of about $1.5 bln for full-year 2025. Given material near-term risks, co is suspending guidance.Block Earnings (Last week)- Revenue decreased about 3% from $5.96 billion a year earlier.- Gross profit rose 9% to $2.29 billion from $2.09 billion a year earlier. That missed analysts' forecasts of $2.32 billion for the quarter.- Gross payment volume hit $56.8 billion, missing expectations of $58 billion, according to StreetAccount.- Stock plunges Check this out and find out more at: http://www.interactivebrokers.com/Palantir Earnings- Palantir Technologies reports EPS in-line, beats on revs; guides Q2 revs above consensus; guides FY25 revs above consensus- Reports Q1 (Mar) earnings of $0.13 per share, excluding non-recurring items, in-line with the FactSet Consensus of $0.13; revenues rose 39.4% year/year to $883.9 mln vs the $862.17 mln FactSet Consensus.- U.S. commercial revenue grew 71% year-over-year and 19% quarter-over-quarter to $255 million.- U.S. government revenue grew 45% year-over-year and 9% quarter-over-quarter to $373 million.- Co issues upside guidance for Q2, sees Q2 revs of $934-$938 mln vs. $899.44 mln FactSet Consensus.- Co raises guidance for FY25, sees FY25 revs of $3.890-$3.902 bln vs. $3.75 bln FactSet Consensus. Raises adjusted income from operations guidance to between $1.711 -- $1.723 billion.- Stock down- probably some profit taking as valuation is a bit stretchedKentucky Derby- AI Wins!- Sovereignty won the 151st running of the Kentucky Derby in Louisville,
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Oh boy - Supply Chain Concerns again?
Summertime lines - for goods/food? Empty shelves?
China factories shutting down.
Talks/No-Talks Underway with China/US.
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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Follow John C. Dvorak on Twitter
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Warm-Up
- Now Supply Chain Concerns
- Summertime lines - for goods/food? Empty shelves?
- China factories shutting down
- Talks/No-Talks Underway with China/US
- DONE DONE DONE - Lutnick
Markets
- Capital Raise - Big Boost - ELON
- Economics - Big Week
- Earnings - The big tech names are on tap
- Berkshire annual meeting and earnings this weekend
ELON
- Elon Musk's xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported.
- The funding would value the company at over $120 billion, according to the report.
- THIS: The artificial intelligence firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.
- "This combination will unlock immense potential by blending xAI's advanced AI capability and expertise with X's massive reach."
- ELON also says that he will be stepping back from DOGE and refocus on TESLA
HAHA! FAV STORY!
- Tesla reported a $97 million loss due to digital assets, the company’s Bitcoin holdings. In the fourth quarter, there was a gain of $270 million.
- Tesla now excludes Bitcoin swings from its non-GAAP results. Tesla also backs out stock-based compensation from its adjusted numbers.
- That means the Bitcoin gains were included in the company’s fourth-quarter adjusted results, and the losses weren’t included in the first-quarter adjusted results.
- Tesla’s report states that the accounting switch was due to the “adoption of the new crypto assets standard.”
Powell Under Fire - Update
- All is good - no new discussions is helping keep a bid under markets
Are Talks Ongoing at ALL?
- China says NO
- US says YES
- Which is it?
DONE DONE DONE
- Commerce Secretary Howard Lutnick on Tuesday teased that the Trump administration has reached its first trade deal, but said it was not fully finalized and declined to name the country involved.
- “I have a deal done, done, done, done, but I need to wait for their Prime Minister and their parliament to give its approval, which I expect shortly,” Lutnick told CNBC’s Brian Sullivan.
Unusual Winner
- With consumer sentiment shrinking and concerns about recession
- Travel companies are feeling the pinch - BUT, Travel insurance companies are cashing n on the Cancel for Any Reason Plans
- People want to travel but are hesitant as they don't know what will be in the future - therefore buy travel insurance
- No pure-play publicly traded stock
-- Berkshire Hathaway Travel Protection, Nationwide
Amazon White House
- The White House on Tuesday slammed Amazon for reportedly planning to display the cost of President Donald Trump's tariffs next to the total price of products on its site.
- "This is hostile and political act by Amazon," White House press secretary Karoline Leavitt said at a press briefing.
- "Why didn't Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?" Leavitt asked.
- Amazon spokesperson tells Washington Post putting tariff rates next to products "was never under consideration for the main Amazon website.
- Says Amazon Haul has considered listing import price duties on certain products.
----- What is our take on this?
Big Moves
- Novo Nordisk and Hims & Hers Health, Inc. (NYSE: HIMS) today announced a long-term collaboration designed to make proven obesity care and treatments more accessible, more affordable, and more connected for millions of Americans. -
CEOs Selling stock
Fed Put in question - Powell under Fire from White House - Markets FED UP!
Earnings Season - VERY CLOUDY
USD Weak - what are investors thinking?
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.
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Warm-Up
- Chaos - What next?
- Rates - moving in the wrong direction again
- USD Weak - what are investors thinking?
- A moment for Pope Francis
- CEOs - Selling stock
Markets
- Markets have had it - Done with this nonsense
- Fed Put in question - Powell under Fire from White House - Markets FED UP!
- Earnings Season - VERY CLOUDY
- VIX - back above 30 again (~35)
- HyperScalers - not so Hyper...
Update One Time Competition - Put Lyrics to Music - The Tariff Blues (DHUnplugged Shirt and Song Play)
- We have a clear winner from all of the entries and will announce and play at end of the show - I think it is awesome!
ECB
The Governing Council today decided to lower the three key ECB interest rates by 25 basis points. In particular, the decision to lower the deposit facility rate -- the rate through which the Governing Council steers the monetary policy stance -- is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission.
Powell Under Fire
- President Trump says "The ECB is expected to cut interest rates for the 7th time, and yet, “too late” Jerome Powell of the Fed, who is always too late and wrong.....Too Late should have lowered interest rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!"
- President Trump says he is "not happy" with Fed Chair Jerome Powell; says he thinks Mr. Powell would leave if he asks him to do so
- Is he going to ask - will he leave????????
- How will markets react?
--- STOP THE PRESSES - Already did a 180 on that..."No intention of firing Powell"
Flurry of Deal Comments Tuesday
- As expected, most contradict the other
- Confusion as to how long
- general happy thoughts - nothing concrete
- Markets reacted positively then came off highs
Pentagon in Chaos?
- White House looking for a new Secretary of Defense, according to NPR
- Will he now have a Podcast or go back to Fox and Friends?
- Of course the White House press secretary is denying
Skinny Minny
- Eli Lilly soaring after announcing positive late-stage trial results for its oral weight-loss and diabetes drug, orforglipron, paving the way for a possible launch by the end of 2025
- Novo Nordisk is looking for FDA approval of their pill-form Wegovy weight loss medication
Some Eco
- April Philadelphia Fed Index -26.4 vs. 10.0 Briefing.com consensus; prior 12.5
- March Building Permits 1.482 mln vs. 1.455 mln Briefing.com consensus; prior revised to 1.459 mln from 1.456 mln
- March Housing Starts 1.324 mln vs. 1.418 mln Briefing.com consensus; prior revised to 1.494 mln for 1.501 mln
- March Leading Indicators -0.7% vs. -0.4% Briefing.com consensus; prior revised to -0.2% from -0.3%
IMF - Downgrades US ECO
- The US growth forecast for this year has been given the biggest downgrade among advanced economies by the International Monetary Fund (IMF) as a result of uncertainty caused by trade tariffs.
- Growth is now expected to be 1.8% this year, down from the IMF's estimate of 2.7% for the US in January.
- The sharp increase in tariffs and uncertainty will lead to a "significant slowdown" in global growth, the Fund predicts.
NVDA
- NVIDIA breaks below $100 as China-based rival Huawei reportedly preps updated AI chip for mass shipment
- Last week, NVDA gapped lower after writing down its inventory by around $5.5 bln, -
If this wasn't idiotic it would be funny
President Miyagi at it again - Tariff on - Tariff Off
Winning - We are Winning so much. Too much winning!
Earnings season rolls on
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
- If this wasn't idiotic it would be funny
- President Miyagi at it again - Tariff on - Tariff Off
- Winning - We are Winning so much. Too much winning!
- Earnings season rolls on
- Need a new CTP stock
Markets
- Key Reversal Indicator - 1st Green cluster bottom on Monday and Tuesday - Called the near-term bottom
- Stock markets slammed
- President Trump discussing stocks
- Economic Pissing Match - Even more tariffs, or bluffs
- VIX HITS 60 back UNDER 30
ANNOUNCING - One Time Competition - Put Lyrics to Music - The Tariff Blues (DHUnplugged Shirt and Song Play)
Nice end to the week!
- Markets gave some hope to the idea that more exceptions were coming
- Across the board, markets gained for the week in highly volatile trade
- Last week and the week before saw extreme movements
- Bond yields (10 yr) swung between 3.7% and 4.5% (add that to historic records)
- At one point equity futures were swinging 1% every 10 minutes in average during height of volatility
Wild Ride
VIX
- Moving lower as things settle down a bit
- This is something that everyone should understand - VIX does not stay elevated forever...
- VIX moves lower as shocks expire
- Great tool for risk management and trading during wild market moves
--- Get in and out...
Not Inflationary..(wink)
- China increased tariffs to 125%
- US Increased China tariffs to 145%
--- Speaking with colleagues and business owners - they are raising prices as cannot absorb thee levels
Tariffs
- Are we sick of this discussion yet?
- hares of automakers jumped during midday trading Monday following President Donald Trump saying he's looking to "help some of the car companies."
--- Auto companies are expecting to see a drop in vehicle sales in the millions, higher new and used vehicle prices, and increased costs of more than $100 billion for the industry, according to research reports from Wall Street and automotive analysts.
- BCG expects tariffs to add $110 billion to $160 billion on an annual run rate basis in costs to the industry, which could impact 20% of U.S. new-vehicle market revenues, increasing production costs for both U.S. and non-U.S. manufacturers.
- Weekend - Some exemptions are being made for semi's, smartphones and other electronics (Shares jumped Monday)
Workaround
- Apple airlifted $2 bln worth of iPhones from India ahead of tariffs
Boeing
- Chinese airlines have been ordered not to take any further deliveries of Boeing aircraft in response to the U.S. imposing 145% tariffs on Chinese goods, Bloomberg News reports.
Zero Day
- Newsline: Wild intraday gyrations in stocks since "liberation day" have put investors more on edge than ever, and the popularity of zero-day-to-expiration options is partly to blame.
- Zero-day-to-expiration options are contracts that expire the same day that they're traded.
- The trading volume of 0DTE options tied to the S&P 500 surged to 8.5 million in April, a 23% jump since the beginning of the year and accounting for roughly 7% of the total volume in U.S. option markets, according to data from JPMorgan.
NVDA - News Drop
- Nvidia said on Tuesday that it will take a quarterly charge of about $5.5 billion tied to exporting H20 graphics processing units to China and other destinations.
- The H20 is an AI chip for China that was designed to comply with U.S. export restrictions. It generated an estimated $12 billion to $15 billion in revenue in 2024. -
Tariffs are killing markets.
A glimpse int what happens when we take a difference course
Markets making some of the wort moves in decades
Billionaires - all in on Trump lost billions...
WAIT !!!!!! Maybe a 90-day pause on Tariffs now...Or Not...
More finesse, less sledge hammer?
PLUS we are now on Spotify and Amazon Music/Podcasts!
Check this out and find out more at: http://www.interactivebrokers.com
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
- Markets making some of the worst moves in decades
- Billionaires - all in on Trump lost billions...
- WAIT !!!!!! Maybe a 90-day pause on Tariffs now...Or Not...
- More finesse, less sledge hammer?
Markets
- Key Reversal Indicator - 1st Green cluster bottom on Monday.. Oversold?
- Stock markets slammed
- President Trump discussing stocks
- Economic Pissing Match - Even more tariffs, or bluffs
- VIX HITS 60!
-- A Quick Poem - Green Eggs and Navarro
--- One of the gents that responded to Vietnam's desire to have zero tariffs as "not enough"
DAX on Monday and other Markets
- Opened up down 10% - clawed back a bunch by end of the day
- European stocks down 1.5% YTD 2024
- US Stock bearing the brunt of the move
- Hong Kong (after being closed Friday) - closed Monday DOWN 13%!
- Monday in Japan, Markets halted, futures trading suspended as Nikkei and Topix plunge more than 5%
--- Follow up - then up 6% the next day
- Monday YTD US Markets:
Heads Up - Just in...
- Tuesday at 12:30PM
- 'White House Press Secretary says 104% additional tariffs went into effect at noon eastern time because China has not removed it's retaliation. The 104% additional tariff will be collected starting tomorrow April 9th'
-Markets were trying to right themselves - up big to start the day - then this headline....
- What if - China comes back at 200%?
More:
- Tuesday afternoon : White House Secretary Karoline Leavitt answers questions on trade at briefing: President Trump not considering delay in tariffs that are due to go into effect tomorrow at 12:01 AM
- Where is the negotiation? Seems like a pissing match or bluff with unlimited funds.
If you are interested
- Rand Paul making all sorts of sense this morning
- Trades are win-win. Trade does not mean that one side has to win and one lose.
- https://www.cnbc.com/video/2025/04/08/sen-rand-paul-on-trump-tariffs-trade-is-an-integral-part-of-capitalism.html
Stupid
- Taiwan's top financial regulator said on Sunday it will impose temporary curbs on short-selling of shares to help deal with potential market turmoil from U.S. President Donald Trump's new import tariffs, and will take other steps as needed.
- Taiwan's Financial Supervisory Commission said in a statement it would limit the number of shares that can be sold short and raise the minimum short-selling margin ratio to 130% from 90%, starting from Monday and lasting until Friday.
- We have seen how this plays out in the past.
More references to bluffing
- "I think it was a big mistake, this Chinese escalation, because they're playing with a pair of twos," Bessent said during an interview on CNBC's "Squawk Box." "What do we lose by the Chinese raising tariffs on us? We export one-fifth to them of what they export to us, so that is a losing hand for them."
VIX
- Hits 60 on Monday - then backs off to 45
- Not often we see a run like that.
- Still at 45 shows big concerned about near-term volatility.
--- S&P 500 top to bottom 7% move today - VIX was at 37 - back to 52
BREAK - IBKR
Billionaires losing $$
- Do we feel bad?
- Sample of losses on Liberation Day
- Zuck lost $18B
- Bezos lost $15B
What?
- Treasury Secretary Scott Bessent says Americans looking to retire aren’t concerned about day... -
Big changes - lots of year-end market S&P 500 downgrades.Recession and stagflationApril - a quick look at some interesting highlights of April (historically)Bill Gates out with a big predictionThe Best Deal Ever! (ELON)PLUS we are now on Spotify and Amazon Music/Podcasts!Click HERE for Show Notes and LinksDHUnplugged 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 TwitterFollow Andrew Horowitz on Twitter Warm-Up- Big changes - lots of year end market S&P 500 downgrades- Recession and stagflation- April - a quick look at some interesting highlights of April (historically)- Bill Gates out with a big prediction- The Best Deal Ever! (ELON)Markets- Corrections happen- Market jumped off the down worst levels on Monday - is worst priced in?- Earnings season starts 4/11 - JPM to report- Year end price targets - lowering- Yields DOWN - Was that the plan all along?OpenAi- OpenAI on Monday announced it had closed its $40 billion funding round, the most ever raised by a private tech company.- The deal values OpenAI at $300 billion, including the new capital.- The round comes to $30 billion from SoftBank and $10 billion from a syndicate of investors.Google Trends- Stagflation - Keyword Search hit highest point in a long time.- Lots of talk about the potential for higher inflation and softer jobsFriday is the UnEmp Report- Expectations are that the rate will tick up from 4.1% to 4.2%- 145-150k people added to the jobs rolls---- That would till be good numbers.Tariff Day - AKA Liberation Day- April 2nd is the date that the retaliatory tariffs go on-- Facts say you? (I am not a smart man....)--- Between China and Canada, Mexico, estimates that the tariffs would bring in $150 Billion in 2025.- The US Stock market has lost $5.25 TRILLION during the same time- US GDP is $29 trillion annually - what is $150 BILLION going to do?- The U.S. federal budget deficit for fiscal year 2025 is projected to be approximately $1.9 trillion.Reagan - He is revered...ReaganOmics......- April 25, 1987 - Radio Address..- " And today many economic analysts and historians argue that high tariff legislation passed back in that period called the Smoot-Hawley tariff greatly deepened the depression and prevented economic recovery. You see, at first, when someone says, Let's impose tariffs on foreign imports,' it looks like they're doing the patriotic thing by protecting American products and jobs. And sometimes for a short while it works -- but only for a short time. What eventually occurs is: First, homegrown industries start relying on government protection in the form of high tariffs. They stop competing and stop making the innovative management and technological changes they need to succeed in world markets. And then, while all this is going on, something even worse occurs. High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars. The result is more and more tariffs, higher and higher trade barriers, and less and less competition. So, soon, because of the prices made artificially high by tariffs that subsidize inefficiency and poor management, people stop buying. Then the worst happens: Markets shrink and collapse; businesses and industries shut down; and millions of people lose their jobs.- https://www.reaganlibrary.gov/archives/speech/radio-address-nation-free-and-fair-trade-4Something to Consider...- Talk on the street: " Tariffs are a negotiation tactic" (What does that mean anyway)-- Assumption: "US will win the negotiation"- - Has anyone considered: What if it does not?- The thought is that it needs to be "fair"Atlanta GDPNOW- Liked when it looks good - disregarded when looks bad- January 31 initial GDP Forecast for Q was +2.9%- Latest April 1 -3.7%
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Inflation - Transitory again..
April 2 dealing approaching!
Doctor Copper!
Mag 7 = Lag 7
A New Closest to The Pin!
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
- Inflation - Transitory again
- End of month - March not so good for US Markets - investors may try to squeeze toward the end
- Tariff waves - now there is talk of softening - April 2 is the day - next Wednesday.
- A restaurant Chain at ALL-TIME highs....
- Turkey - Market Mayhem
- An fun Limerick from a Listener
Markets
- Doctor Copper!
- Mag 7 = Lag 7
- Tesla Woes- Stock bouncing but challenges still remain
- March Sadness for Markets...
Attention Collectors!
- The New DHUnplugged shirts are finally here! We are going to sell only 6 - the donations received by the end of the month above $250 will get a shirt - Nice white swim/light long sleeve. (The rest are reserved for winners and special occasions) - We will also have the #1 as the first shirt ever out to the public for $1,000.
- Put your address and size in the comments
Tariff Day
- April 2nd is the date that the retaliatory tariffs go on
- Why April 2nd? Why not April 1st??????
--- Worried that is April Fool's day and no one would take them seriously?
Copper Prices
- 45 year high
- What is this? Usually a predictor of the economic conditions -
- Seems like a little inflation (China also pumping)
- FYI - An average single-family home contains roughly 439 pounds (or 200 kilograms) of copper, primarily in wiring, plumbing, appliances, and hardware
Doctor Copper
What about Coffee?
- Chart - Cents per pound
- These increases are driven by climate-related impacts on major coffee-producing countries like Brazil and Vietnam, as well as financial speculation in the market
- DOUBLE THE PRICE of last year
Coffee Prices
Housing Prices
- Reports that tariff induced panic is prices of raw materials is pushing prices up
- Developers are not going to get behind and this may push prices up - on average $10,000 per new home (at least)
Powell on Inflation
- Back to Transitory
- In his latest speech/commentary last week, he hinted that he believes that the current
- During his post-decision press conference last Wednesday, Powell said tariff-induced inflation could be “transitory,” or temporary.
- Here we go again!
Stagflation Anyone?
- Fed sees higher inflation and an economy growing by less than 2% this year
- The rate-setting Federal Open Market Committee downgraded its collective outlook for economic growth to 1.7%, down from the last projection of 2.1% in December. In the meantime, officials hiked their inflation outlook, seeing core prices growing at a 2.8% annual pace, up from the previous estimate of 2.5%.
- In a statement, the FOMC noted the "uncertainty around the economic outlook has increased," adding that the central bank is "attentive to the risks to both sides of its dual mandate."
Meanwhile...
- The 3-month Treasury rate inverted against the 10-year for a bit earlier this month.
- Currently they are locked at the same rate...
- This is the Fed's "preferred" measure of the potential for a recession in the future.
Boeing
- Boeing wins $20-billion contract for Next Generation Air Dominance program
- Win comes after Boeing annual loss, strike, other setbacks
- On the news, Boeing's shares rise, Lockheed's fall
- Lockheed has been plagued by delays in F-35 upgrade
- New name of the aircraft? The F-47 !
New-Clear Energy
- A nuclear power plant on the shores of Lake Michigan is aiming to make history this fall by becoming the first reactor in the U.S. to restart operations after shutting down to be eventually dismantled. -
- Markets still unsettled
- Retail spending down - another bankruptcy (but who they blame?)
- Consumer frayed
A New Closest to The Pin!
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
- Markets still unsettled
- Retail spending down - another bankruptcy (but who they blame?)
- Consumer frayed
- Announcement #1 Closest to the Pin is a good one...
- Announcement # 2 New DH Shirts - attention collectors...
- March madness - BBall and Markets
Markets
-Worst month since 2023 - and it is not over
- USD is dropping - loss of confidence
- Gold - keeps shining - wow what a run!
- Revenge of the Dems on Markets? Tesla stock pummeled...(We initiated a new position on this drop - today)
- US Stocks - where is the money going?
Attention Collectors!
- The New DHUnplugged shirts are finally here! We are going to sell only 6 - the donations received by this Friday - March 21 above $250 will get a shirt - Nice white swim/light long sleeve. (The rest are reserved for winners and special occasions) - We will also have the #1 as the first shirt ever out to the public for $1,000.
- Put your address and size in the comments
Consumer Confidence
- The preliminary University of Michigan Index of Consumer Sentiment for March experienced a significant drop, falling to 57.9 compared to the Briefing.com consensus of 65.6 and the final reading of 64.7 in February. This marked the third consecutive decline in consumer sentiment.
--- A year ago during the same period, the index stood notably higher at 79.4.
- Several key factors contributed to this decline.
-- The Current Economic Conditions Index decreased from 65.7 to 63.5, down from 82.5 a year earlier.
-- Similarly, the Index of Consumer Expectations saw a sharp drop from 64.0 to 54.2, compared to 77.4 a year ago.
-- Inflation expectations also played a significant role, with year-ahead inflation expectations climbing from 4.3% to 4.9%, marking the highest level since November 2022.
--- Additionally, long-run inflation expectations increased from 3.5% to 3.9%, the largest month-over-month rise since 1993.
!--The overarching takeaway from the report was that the decline in sentiment affected various demographic groups across age, income, wealth, political affiliations, and geographic regions, with inflation concerns and policy uncertainty emerging as critical factors behind the drop.
Consumer Confidence
Private Equity
- Time Bomb Twitter post?
- Yes, agree PE is getting too mainstream and not a good amount of liquidity - not right for most investors
- Is it the next bomb waiting to happen?
HANG ON!!!!!!!!!!!!!!!!!!!
- Jeremy Siegel is sayibg market could go lower (Tom Lee !!!! We need you!!!!)
- Speaking on current market conditions, Siegel pointed to several risk factors that could push stocks lower in the near term. Key concerns include persistently high inflation, Federal Reserve policy decisions, and growing fears of an economic slowdown. While markets have shown resilience in recent months, he believes investors may be overly optimistic about the trajectory of interest rates and economic growth.
- “The market has priced in a near-perfect landing,” Siegel said, referencing investor expectations that the Fed will successfully bring inflation down without triggering a recession.
- However, he warns that there are still significant headwinds that could derail this outlook.
Retail
- Forever 21 filed for bankruptcy protection for the second time in six years on Sunday and blamed fast-fashion e-tailers Shein and Temu for its demise.
- The retailer's operating company is expected to cease all operations in the U.S. and has already begun liquidation sales at its mor... -
What goes up?
Uncertainty - that word again!
American Exceptionalism - the theme for 2025 that is fizzling out quickly.
Back from India - Namaste....
Psychological Indicators.
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Warm-Up
- What goes up?
- Uncertainty - that word again!
- American Exceptionalism - the theme for 2025 that is fizzling out quickly.
- Back from India - Namaste....
- Psychological Indicators
Markets
- Follow up - "They call it dumb money - ruling again" - how did that turn out?
---- Quantum stocks down 40-50% YTD
- Billionaires - kissing the ring and getting rug pulled
- TRILLIONS (4) lost in market cap - in the name of what again? (MAGA?) Make America God Awful?
- Germany's stock market hits all-time high (even though economy is not doing well)
- President Donald Trump marked his 50th day in office on Monday. So far, the stock market is off to its worst start since President Barack Obama's first term in 2009. (Have to go back to Nixon for the next "worst" start comparison)
Monday Markets
- Worst day for the Nasdaq since late 2022 (-4%)
- Tesla plunged 15% - worst day on 5 years (Emperor Elon has new clothes?)
Market Update (YTD)
- NAS100 down 7%
- SPY down 4.5%
- SPY Equal Weight down 0.5%
- ! Russell 100 Growth Down 10.5% , Russell 1000 Value up 1%
- Cruise ships and Airlines - Down 20-30%
- Emerging Markets UP 3.5%
- European Stocks up 7%
- China up 16%
- Nat gas up 50%
- WTI Crude - Down 7%|
- 40% of the stocks in the S&P 500 are off 20% from their recent highs
Down from the highs
Smacked Stocks
Is This the Plan?
- Tariffs as negotiating chip?
--- How Is that working?
- Slashing Government employees and spending
--- Is this the Twitter Plan of re-org?
- Deregulation?
- Tax Cuts?
- Bitcoin Reserve (major disappointment?)
--- Just the forfeited crypto from criminal or civil asset forfeiture proceedings.
- US Sovereign Wealth Fund
---- Are they taking down markets to get better pricing to then prop up?
- Rates are Down - but not for a good reason (10Yr @ 4.2%)
- - Recession concerns are growing
When will Fed step in to save the day?
--- Fed has taken harder stance - but they don't have the backbone to stay out of it if markets cave
Crypto Check
- Not good
- Bitcoin - big bump post election and then faded - back to exactly where it was pre-election
- ETH - back to levels from Nov 2023
How are the Big Boys doing this year?
- Billionaire Index Top Movers....
Billions and Billions
Elon Update - TSLA
- For seven straight weeks, since Elon Musk went to Washington, D.C. to join the Trump administration, shares in his automaker have declined, closing on Friday at $270.48. It's the longest such losing streak for Tesla in its 15 years as a public company.
- Several Wall Street firms this week, including Bank of America, Baird and Goldman Sachs, cut their price targets on Tesla.
- Elon was bemoaning how hard it was on him and companies right now....running them "with great difficulty"
- President Trump said that in light of this "boycott" of Tesla by the public - he is going out to buy a new Tesla this morning as a sign of support.
Quick AI Check - Tech Update
- Oracle issued quarterly results on Monday that trailed analysts' estimates, but the company offered bullish comments on its cloud infrastructure segment.
- Earnings per share: $1.47 adjusted vs. $1.49 expected
- Revenue: $14.13 billion vs. $14.39 billion expected
- Revenue increased 6% from $13.3 billion in the same period last year. Net income rose 22% to $2.94 billion, or $1.02 a share, from $2.4 billion, or 85 cents a share, a year earlier -
Hot and cold openings - the best of 2024.
A real hoot to listen to our antics and shenanigans over the past year or so.
What food are they discussing or what hot stock may be on the list? All here on this Best-Of Show, produced by Ryan Rediske!
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Love the Show? Then how about a Donation?
The Winner for
ORACLE (ORCL)
Winners will be getting great stuff like the new DHUnplugged Shirt!
FED AND CRYPTO LIMERICKS
See this week’s stock picks HERE
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CPI comes in HOT, PPI not as bad
Retail sales - not a happy number for January
News on GameStop
DOGE is full attack mode (Dismantling)
PLUS we are now on Spotify and Amazon Music/Podcasts!
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Warm-Up
- CPI comes in HOT, PPI not as bad
- Retail sales - not a happy number for January
- News on GameStop
- - DOGE is full attack mode (Dismantling)
- The Winner of the ORCL CTP
Markets
- The call it dumb money - ruling again
- More earnings - driving markets
- Buying holding tight - tariffs are not worrisome|
- Intel parts up for grabs?
Retail Sales
- According to reports: Consumers sharply curtailed their spending in January, indicating a potential weakening in economic growth ahead, according to a Commerce Department report last Friday.
- Retail sales slipped 0.9% for the month from an upwardly revised 0.7% gain in December, even worse than the Dow Jones estimate for a 0.2% decline. The sales totals are adjusted for seasonality but not inflation for a month in which prices rose 0.5%.
- Excluding autos, prices fell 0.4%, also well off the consensus forecast for a 0.3% increase.
- A "control" measure that strips out several nonessential categories and figures directly into calculations for gross domestic product fell 0.8% after an upwardly revised increase of 0.8%.
Other Economics
- In other economic news Friday, the Bureau of Labor Statistics reported that import prices accelerated 0.3% in January, in line with expectations for the largest one-month move since April 2024. On a year-over-year basis, import prices increased 1.9%.
- Fuel prices increased 3.2% on the month, also the biggest gain since April 2024. Food, feed and beverage costs rose 0.2% following a 3% surge in December.
- Export prices also increased, rising 1.3%.
Back to Work
- President Trump was very vocal about people who work from home. Said they they are really not working
- “I happen to be a believer that you have to go to work. I don’t think you can work from home.
- “Nobody’s going to work from home, they’re going to be going out, they’re gonna play tennis, they’re gonna play golf. They’re gonna do a lot of things—they’re not working.”
--- Question: Doesn't President Trump work from home?
-----JPMorgan Chase CEO Jamie Dimon scorned calls from some employees to soften the bank's five-day return-to-office policy in an animated town hall meeting last week, according to a recording reviewed by Reuters.
- Employees at the largest U.S. bank have complained on internal message boards and chats about losing hybrid working arrangements, and one group launched an online petition urging Dimon to reconsider.
Unions - NOPE
- Amazon workers at a facility near Raleigh, North Carolina, overwhelmingly voted against unionizing on Saturday.
- Of the 3,276 ballots cast, there were 2,447 votes opposing the union and 829 in favor, according to Carolina Amazonians United for Solidarity and Empowerment (CAUSE), the group seeking to represent workers. The results still need to be certified by the National Labor Relations Board.
China - Tariffs of their own
- China's finance ministry said Tuesday it will impose 15% tariffs on coal and liquified natural gas imports from the U.S. and 10% duties on crude oil, farm equipment and certain cars, starting Feb. 10.
- The tariffs announcement comes as the additional 10% U.S. tariffs on Chinese exports came into effect on Tuesday stateside.
Speaking of Tariffs
Reciprocal Tariffs - what are they? . Essentially, it's a "tit-for-tat" approach to trade: if Country A charges a 10% tariff on goods from Country B, then Country B will impose a 10% tariff on goods from Country A
- President Trump recently signed a memorandum directing... -
Wax off Wax On - Waffling - Mr. Miyagi President?Government Cuts - Lots of Bye-Bye Notes.Economics and the latest employment report.PLUS we are now on Spotify and Amazon Music/Podcasts!Click HERE for Show Notes and LinksDHUnplugged 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 TwitterFollow Andrew Horowitz on Twitter Warm-Up- Wax off Wax On - Waffling - Mr. Miyagi President?- Government Cuts - Lots of Bye-Bye Notes- Economics are in.... People happy and not happy- Musk - let's talk about this ....- Praying for the turtles...Markets- Lots of Tumult - confusion but still a retail bid- Inflation numbers are not worrying (to some)- Employment Report- CPI Due this week- Tariffs on Steel and AluminumThe Karate Kid: Danielson - Wax On Wax off- Trump 2.0: President Miyagi: tariffs on, tariffs off (used to be called waffling)- Mexico and Canada Tarrifs are postponed for a month after "phone calls" from Trudeau and Sheinbaum- China 10% tariffs and now China retaliates--- Supposedly there is a call set up between Trump and XI in the next few daysEconomics- ADP: Private sector companies added more jobs than expected in January-- Companies created a net 183,000 jobs on the month, slightly more than the 176,000 in December---Pay for workers who stayed in their jobs grew at a 4.7% annual rate- BLS Payrolls: 143k Added, (shy of estimates)---- URate 4%----Avg Hourly Earnings kick up to 0.5% MoM- - - UMICH for Feb - 67.8 (DOWN from 70.1- ISM Serices 52.8, down slightly from prior monthColor on Confidence numbers- Lots of concern over the potential for inflation in the UMich report--- Biggest issue is the worry about the tariffs and how they may impact pricesEarnings:- The S&P 500 is reporting a 13.2% year-over-year earnings growth rate for Q4 2024, which is the highest growth rate reported in three years- 77% of S&P 500 companies have reported earnings above estimates, which is equal to the 5-year average but above the 10-year average- The Financials, Communication Services, Information Technology, Consumer Discretionary, and Utilities sectors are reporting double-digit earnings growth- Starting to seeing some issues in the BIG tech sector - that is why all of a sudden we are also seeing layoffs - expense cutting (although no cuts to cap ex at this point)Earnings- Amazon prelim Q4 $1.86 vs $1.49 FactSet Consensus; revs $187.79 mln vs $187.31 bln FactSet Consensus- AWS segment sales rose 18.9% yr/yr to $28.79 bln- Q4 operating income of $21.2 bln vs prior guidance of $16-20 bln; guides to Q1 operating income of $14-18 bln- Amazon sees Q1 revs $151.0-155.5 bln vs $158.56 bln FactSet Consensus----Amazon expects $100 billion of capex in 2025 on 'once-in-a-lifetime' AI opportunityMore Earnings- Alphabet shares fell more than 9% in after-hours trading Tuesday after the company reported fourth-quarter results that missed on revenue expectations and announced more artificial intelligence investments.- Earnings per share for the Google parent company beat analysts' estimates by two cents.- Revenue: $96.47 billion vs. $96.56 billion expected by LSEG- Earnings per share: $2.15 vs. $2.13 expected by LSEGEven More Earnings- Advanced Micro Devices reported fourth-quarter results on Tuesday that beat Wall Street expectations for sales and earnings, but the stock fell about 5% in extended trading as the company missed estimates in its key data center segment.- Stock kept of falling in the days after too...- Earnings per share: $1.09, adjusted, versus $1.08 expected- Revenue: $7.66 billion versus $7.53 billion--- Clearly this company was way ahead of itself and proposing that they had AI chips that were potentially competitive to NVDA - BUT NOT!Spotify
-
January is in the books - interesting outcome.
Let's work at Costco - wow!
Fed is out with their rate plan - not confident in the future
Fed Workers getting buyouts
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Warm-Up
- January is in the books - interesting outcome
- Let's work at Costco - wow!
- Fed is out with their rate plan - not confident in the future
- Fed Workers getting buyouts
- The latest from the Just Kidding department...
Markets
- Investors Betting Trump will soften his stance on Tariffs
- Trump playing chicken on weekends that other countries will bend
- Some recovery after last Monday's beating
- But the questions is - how long until global upheaval with all of these threats and bashing?
Tariffs - Threats to Canada and Mexico
- 25% across the board on Canada and Mexico
- 10% in China
- Blaming immigration, drugs and trade imbalance
--- Oil could become an issue with Canada as they send us cheaper (dirty crude) - but several regions could see higher prices by 20% if these tariffs stick
- After the close - Trump said at the White House Friday he would 'absolutely' put tariffs on the nation's EU allies.
- 'You want the truthful answer or should I give you a political answer?' Trump said when asked about it – underlying his commitment to the issue. He said the tariffs on the EU would be 'very substantial,' without providing details.
- Markets closed in the red Friday on this tidbit
-------- Follow up - futures and markets off considerably before the open on Monday. 2%+ across the board. Oil UP.
-------THEN - A PHONE CALL WITH MEXICO! PAUSE ON RATES FOR A MONTH (10am news)
Bitcoin <$97,000 over the weekend, then popped back up
-- Again is this supposed to be a alt asset class or it is simply a risk asset now?
Musk has the keys
- The Trump administration has approved plans to grant Treasury officials affiliated with Elon Musk’s team access to the federal system that handles trillions of dollars in payments, according to two people familiar with the situation.
- Senator Warren is apoplectic
Tesla also not thrilled
- CFO "Over the years we've tried to localize our supply chain in every market, but we are still reliant on parts from across the world for all our businesses," Taneja said. He said the "imposition of tariffs" would "have an impact on our business and profitability."
--- Oh and Tesla's earnings were uninspiring. Big drop in sales and profitability
---- HOWEVER - Musk and team promised that a cheaper car will be coming this year and that left the carrot dangling for investors
General market update for January - Internal notes
- The U.S. markets finished the month on a downturn as news of upcoming tariffs triggered renewed market concerns. January proved to be a volatile month, marked by a record-high closing for the S&P 500®, followed by a steep decline after the release of a new AI model from China caused global turbulence. Despite this, robust earnings reports and strong consumer spending helped the S&P 500 end the month with a 3% gain.
- Mid-cap and small-cap stocks outshone their larger counterparts, with the S&P MidCap 400® and S&P SmallCap 600® rising 4% and 3%, respectively. Investors remained cautious due to ongoing uncertainties about Federal Reserve rate cuts and inflation.
- Most sectors saw gains in January, with Communication Services, Health Care, and Financials leading the charge. Information Technology was the sole underperformer, declining 3% due to AI-related challenges.
- In January, most sectors experienced gains, with Communication Services, Health Care, and Financials at the forefront. The only sector to underperform was Information Technology, -
The Impact of Flagrant Braggadociousness
Hard rug pull?
Tariffs - giving out like candy
TikTok Saga continues - with a twist
PLUS we are now on Spotify and Amazon Music/Podcasts!
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Warm-Up
- The Impact of Flagrant Braggadociousness
- Hard rug pull?
- Tariffs - giving out like candy
- TikTok Saga continues - with a twist
Markets
- Deflating Stocks - Thread Pull (Before the rug pull)
- Monday Mayhem - S&P 500 down 1.9%, Equal Weighted down 0.35% - DEEPSeek
- Tuesday - plenty of buyers stepping in ....
- Staples, Banks are in favor all of a sudden...
ANNOUNCING a New CTP!
$600 Billion Lost Monday - for one company! BIGGEST one day drop ever!
Monday Markets
- News of a cheap AI model (program/app) from China hit the tape and it pulled the loose string and tech / markets felll apart.
- DeepSeek, has more downloads that ChatCPT
- DeepSeek's latest app comes just days after Mr. Trump announced a new $500 billion venture with ChatGPT maker OpenAI, Softbank and Oracle, dubbed Stargate, which he touted as ensuring "the future of technology" in the U.S. (Which is higher than anyone could calulate as the actual value- more like $60-$80 billion)
- ORCL -13%, NVDA -17%, AMD -7%, ASML - 8%. Nuke power companies getting squashed - NASDAQ 100 down 3.2%
- DeepSeek is also catching investors off guard because of the low development costs for its AI app, which Wedbush Securities analyst Dan Ives pegged at only $6 million. By comparison, OpenAI, Google and other major U.S. companies are on track to invest a total of roughly $1 trillion in AI over the coming years, according to Goldman Sachs.
- FWIW - DeepSeek excels in technical tasks like coding and reasoning, while ChatGPT is better for creative writing and conversational tasks
- Founder Liang, who had previously focused on applying AI to investing, had bought a "stockpile of Nvidia A100 chips," a type of tech that is now banned from export to China. Those chips became the basis of DeepSeek, an MIT publication reported.
- DeepSeek is looking to differentiate from its competitors with its reasoning capabilities, meaning that before delivering the final answer, the model first generates a “chain of thought” to enhance the accuracy of its responses.
- Question: Will this shed reality on the AI bubble or just a bump in the road?
---- Lesson: As an investor, be careful of the current administration's hype - we saw this last time and many of the "deals" never got done fully or at all.
---- In addition, DJIA was flying high as staples and other ramping. HD, CRM, JNJ
- 10Yr Yield drops to 4.52%
Hard Rug Pull
- Hard rug pull: The developers have no intention of completing the project and plan to scam investors from the start
In the End...
- The narrative with switch... Was: How great all of this as capital spend is going to be great!
- Will morph to: No need for capital spend therefore companies will have the benefit of not spending the money!
- The usual Wall Street Machine
--- Update: That has already started in the background. The idea that this is great as there is more competition AND a layer has been built that can support faster and cheaper build out of this AI .....
One More Thing
- Wang (CEO of ScaleAI) said DeepSeek actually has more H100 chips from Nvidia than expected — about 50,000 of them.
- At $25,000 a piece that is $1.25 billion. Sooooooo how is it that it took only $6 million to build..
Big Cuts
- The Trump administration is offering millions of federal workers the option to accept buyouts through a government-wide "deferred resignation" program if they resign by Feb. 6.
- Those who accept the offer will receive pay and benefits through Sept. 30, -
Trump-o-Nomics here we come.
MemeCoins making s comeback - then fizzling.
Pardons and Executive orders are flying.
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*** California Clean up - Some thoughts and companies... ****
Warm-Up
- New President - New Leadership
- Pardons flying....Even preemptive ones
- Another short-seller is out of biz...
- Talking bout animal spirits being unlocked as President Trump take office
Markets
- Coins - on fire (then pull back)
- Markets - Moving after last week's CPI print
- MemeCoins making a comeback
- Pelosi moving stocks
** Need a new symbol for the 1st CTP for 2025
PSA - Quick note - Next week's guest on TDI Podcast - Howard Lindzon - Founder of StockTwits
- Follow JCD and AH on Twitter
- Listen to No Agenda every week - double the pleasure on Thursdays and Sundays at 2P (ET)
Inauguration
- Any major takeaways?
- Trump wearing a purple tie - that does not seem like an accident
- Significant number of executive orders
First orders of business--- Energy is key area along with DEI, TWO Genders (only), Temporary pause on China tariffs, National emergency at borders, ending EV mandates
- National emergency: Borger, energy
- "That national energy emergency will unlock a variety of different authorities that will enable our nation to quickly build again, to produce more natural resources, to create jobs, to create prosperity and to strengthen our nation's national security"
- Opening up Alaska: "Alaska is so key for our national security, given its geostrategic location, and it's a crucial place from which we could export LNG not only to other parts of the United States, but to our friends and allies in the Asia Pacific region"
- DEI -could now be DOA
- Withdrawing from Paris clime agreement
- - - The incoming administration plans to review and potentially end what the official described as "discriminatory programs," including environmental justice grants and diversity training initiatives.
--- Retaking Panama Canal and plant a flag on Mars
-- Do we want to discuss that President Trump did not put his hand on the bible as he was being sworn in?
----EXTERNAL REVENUE SERVICE: For this purpose, we are establishing the external revenue service to collect all tariffs, duties and revenues. It will be massive amounts of money pouring into our treasury coming from foreign sources, the American dream will soon be back and thriving like never before to restore competence and effectiveness to our federal government
- Vivek Ramaswamy is out as Elon Musk’s co-leader as he is running for Governor of Ohio
Pre-Emtiove Pardons
- President Joe Biden on Monday issued preemptive pardons for several family members, citing concerns that they will be targeted by “baseless and politically motivated investigations.”
- Biden pardoned his brother, James Biden; James’ wife, Sara Jones Biden; his younger sister, Valerie Biden Owens; Owens’ husband, John Owens; and his other brother, Francis Biden.
- “The issuance of these pardons should not be mistaken as an acknowledgment that they engaged in any wrongdoing, nor should acceptance be misconstrued as an admission of guilt for any offense,” Biden said in a press release.
--- AND January 6th "Hostages" pardoned
Tariffs
- Seems that the squeeze is on - 25% on Mexico (MexAmerica) and Canada (CanAmerica) starting Feb 1st.
- HOT FLASH - 10% on China starting Feb 1
Musk - Feelings hurt?
- Removing of EV mandates - not in his best interest.. Right?
- Could it be a swap for more lucrative defense and space contracts?
TikTok
- Goes dark for a little while over he weekend (Apple, Google remove app and offline on web) -
People are catching on - Fed has no clue
Investors are nervous - lots of intraday volatility
Correction - could it be?
USA- Going DEEPER into debt
DOGE - already making excuses
PLUS we are now on Spotify and Amazon Music/Podcasts!
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Warm-Up
- People are catching on - Fed has no clue
- Investors are nervous - lots of intraday volatility
- Correction - could it be?
- USA- Going DEEPER into debt
- DOGE - already making excuses
- Next Monday - Market Holiday and Inauguration day
Markets
- No happy - inflation and jobs (A 1-2 Punch for markets)
- CPI and PPI this week - make it or break it?
- Rates hitting key resistance
- Oil spikes - multi-month high
All of a sudden..
- Microsoft, Facebook and other companies are cutting staff again
- Talk of tough year ahead... What is up?
If they don't cooperate?
- Cut their pay!
- China is set to slash pay for staff at its top three financial regulators, including the central bank, by about half, as part of a regulatory revamp unveiled in 2023 to bring their salaries in line with other civil servants
- Starting from this month, staff at the People's Bank of China (PBOC), National Financial Regulatory Administration (NFRA) and China Securities Regulatory Commission (CSRC) will see total income slashed by about half.
More China - Pull Forward
- China’s trade data in December beat expectations by a large margin, with exporters continuing to frontload shipments as worries over additional tariffs mount, while the country’s stimulus measures appear to be supporting demand in the industrial sector.
- Can it last?
Let's Talk Turkey
- Fed has no idea what is going on
- They simply can move markets, (equity and fixed income) by liquefying markets
- HOPE that they have the general trend and can regulate the flow so not overheat or overcool
- In reality, their forecasting tools are crap
--- BUT, focus on what they do, not what they say or their outlook
Employment Numbers
- Summary: Nonfarm payrolls increased by a stronger-than-expected 256,000, the unemployment rate slipped to 4.1% from 4.2%, average hourly earnings growth year-over-year was a sturdy 3.9%, and more people were employed.
- Much better than anticipated !
- Unemployment rate drops
- So, we see higher prices and better employment - markets spooked that Fed out of touch
- One-Two punch for equities
Result
- Steepening yield curve
Market Sell-off
- NASDAQ 100 off 6% from the highs
- Big names down more (NVDA 13%, Tesla 18%, Apple 10%, NFLX 10%)
- SOOOO - Big Cap Tech is in a correction and dragging down markets
- Markets are in the RED for the year and unchanged/under the pre-election day move.
- More speculative (runners) stocks are down even more...
Quantum Stocks
- DUH!
- Sell-off deepened as Zuck cautioned that the potential is still years (and years) away (on Joe Rogan Show)
--- Zuck looking like he wants to follow in Elon's footsteps
Quantum Stocks
More Zuck
- Bashing Apple...
- No innovation, random rules
- "So how are they making more money as a company? Well, they do it by basically, like, squeezing people, and, like you're saying, having this 30% tax on developers by getting you to buy more peripherals and things that plug into it," Zuckerberg said. "You know, they build stuff like Air Pods, which are cool, but they've just thoroughly hamstrung the ability for anyone else to build something that can connect to the iPhone in the same way."
Oh - and this...
- Meta on Friday told employees that its plans to end a number of internal programs designed to increase the company's hiring of diverse candidates, the latest dramatic change ahead of President-elect Donald Trump's second Wh... -
Grinch Ending .... No Santa Rally
CTP Results are IN! Close race
Cocktails -> Cancerous now
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Warm-Up
- Grinch Ending .... No Santa Rally
- CTP Results are IN! Close race
- Cocktails -> Cancerous now
- New rules for medical bill deadbeats
- Markets
- Poor end of year - hard hit by Grinch - killed Santa Rally
- Gym parking Lots - Resolutions for January
- Yields starting to becom a problem
- CME Fed Funds Futures --> No CUT MAN!
Market Update
- December
Market Update
Sector Update
January Markets
- As expected, the start of the year is typically a time when people make resolutions they hope to keep.
- In the finance world, we often hear about returning to discipline, cutting losers, adding to winners, and adhering to all the fundamental rules.
- Additionally, at this time of year, investors may consider becoming more aggressive, less aggressive, more diversified, or investing in last year's winning stocks.
- These thoughts and actions contribute to market volatility, which usually fades away within a couple of months when resolutions are forgotten
---- Much like how the parking lots at local gyms are packed every January, but plenty of spots open up by March.
Big Issue
- The big issue we need to focus on now is the continuing increase in rates as the 10-year Treasury yield has now breached a key resistance level of 4.6%, which is significant.
- There are several reasons for this move, but the simple facts are that the economy is still growing and prices are on the rise.
ISM Report - Not Helping (From Briefing.com)
- The ISM Services PMI increased to 54.1% in December (Briefing.com consensus 53.0%) from 52.1% in November. The dividing line between expansion and contraction is 50.0%, so the December reading reflects services sector activity accelerating from November.
- The key takeaway from the report is that it was a double-whammy for rate cut expectations in that the expansion in services sector activity accelerated while the prices index picked up noticeably, printing its first reading above 60.0% since January 2024.
• The Business Activity/Production Index increased to 58.2% from 53.7%.
• The New Orders Index bumped up to 54.2% from 53.7%.
• The Employment Index dipped to 51.4% from 51.5%.
• The Prices Index jumped to 64.4% from 58.2%.
• The Supplier Deliveries Index rose to 52.5% from 49.5%.
• The Backlog of Orders Index fell to 44.3% from 47.1%.
No Cuts for A While
- With prices on the rise and the economy in good shape...
CME Fed Funds
Nat Gas!
- Natural gas futures prices surged last Monday, hitting a new 52-week high following reports of a colder-than-usual temperature outlook for January.
- Natural gas February futures rose around 15% during the session after an updated outlook by The Weather Co. and Atmospheric G2 released Sunday showed that the temperature forecast for next month is expected to be colder than average in the East, specifically from Florida to Maine as well as certain parts of the Great Lakes.
- POLAR VORTEX?
- Already prices are fading....
Booze Bummer
- The U.S. surgeon general issued a new advisory warning Friday about the link between alcohol consumption and increased cancer risk, and pushed for policy changes to help reduce the number of alcohol-related cancers.
- U.S. Surgeon General Dr. Vivek Murthy said there is a "well-established" link between drinking alcohol and at least seven types of cancer, including breast, colorectum, esophagus and liver. For cancers including breast, mouth and throat cancers, increased risk may start around one or fewer drinks per day, according to his office. -
Another year is in the record books....
Let's not forget about the not-so boring election,
Hacks, beached and outages and PEAK NVDA!
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DONATIONS ? Thank you for all who gave to the Thanksgiving Holiday Campaign...
Checking out the early CTP Cup Standings
HAPPY NEW YEAR!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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