#161 - Canadian Inflation Number Falls, NFL is Still King and How Adobe Owns The Creator Economy
- Where are rates going?
- Patagonia Founder hides all his money
- Joe Pompliano On NFL TV Ratings
- Notes from the Figma/Adobe acquisition
- New Chelsea owner on how to build a Human Capital Business
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👉 For specific investment questions or advice contact Joel @ Gold Investment Management.
The main indexes have made three consecutive lower highs and lower lows since mid-August.The number of distribution days is growing. It seems they are headed for a test of their summer lows.
Some mega-cap stocks like META, GOOGL, and NVDA already made new year-to-date lows and those are the ones that are the most sensitive to the economic cycle.The year-over-year Inflation keeps coming above 8%, which probably won’t change in the next two months.This would give the Fed all the excuses they need to keep raising interest rates.
As the Fed keeps fixating on inflation, the market is starting to worry about a potential recession in 2023 due to Fed’s action. New credit creation is shrinking quickly as interest rates are rising.
Companies that are economic bellwethers keep lowering their earnings guidance by a shocking size. The most recent examples are FedEx (FDX) and Nucor Corporation (NUE).While the indexes and most stocks are in a clear downtrend, there are some groups that are showing notable relative strength.
Anything related to alternative energy is holding relatively well – EVs (TSLA, RIVN), solar (ENPH, FSLR, SPWR, NOVA, etc.), lithium (LTHM, ALB, etc.), others (BE, PLUG, STEM, etc.). Ironically, the only group that is holding well is the one that is expecting hefty government subsidies.
"DON'T FIGHT PAPA DOW"
Chart from JC at AllStar Charts
Prices are both below overhead supply and above support from the summer lows.
From any sort of intermediate-term perspective, this is what's called.
"No Man's Land"
If there's one chart that tells a good story about what's going on, it's probably this one.
Remember, the new lows list peaked in mid-June, that was over 3 months ago.
Some of the worst areas hit by this bull market, things like Biotech and ARKK, bottomed in May!
So, before stocks can go up, they need to stop going down.
Have they stopped going down? Or did they just stop going down, for now?
Time will tell.
Market Update and Charts:
June S&P500 2022 lows - 3666
Today S&P500 - 3873
Today we are 5% above the June lows
CNBC this morning
Thomas Petterfy, CIO Interactive Brokers
“cash balances are at all-time highs”
Central Bank meetings this week:
U.S., Japan, Sweden, Switzerland, Norway, U.K.
Jay Powell very likely to go 75 basis points
Fed Rate upper bound rate
2.5% + 0.75 this week + 0.50 in November + 0.50 in December = 4.25% by year-end
Crude - 82 (-3%)
OPEC heavyweight UAE (United Arab Emirates) is speeding up plans to boost oil production
The goal is to produce 5 million barrels a day by 2025 vs. 2030 previous plans
UAE produced 3.4 million barrels a day in August
Germany’s Chancellor Scholz:
to travel to UAE and Saudi Arabia this week
expected to sign contracts to secure natural gas supplies from the Middle East
10yr - 3.5%
Global Instability and The Opportunity It Presents:
💸Reformed Millennials - Post of The Week
Fridays Random Thoughts:
Over $3 Trillion in options are set to expire today.
This is called Quad Witching, when stock index futures, stock index options, stock options, and single stock futures all expire on the same day.
It usually increases volume and volatility.
Whatever happens today should be taken with a grain of salt.
Remember, today has nothing to do with corporate fundamentals or the economy. There are major driving forces pushing everything around.
The real stuff starts next week, in my experience.
The market is expecting a 75 bps hike next week with some (20% according to CME) calling for the Fed to drop the hammer (100 bps).
The Fed has a needle to thread: too little and inflation persists, too much and the economy enters a recession.
On Tuesday, the S&P had its worst day since June 2020 and its 9th worst day in the past decade.
Over in the Nasdaq 100, every single stock closed red for the first time since March 2020.
“Hold my beer.”
-Cathie Wood & the retail army, probably
Cathie Wood’s Ark went on its biggest shopping spree (top chart) since February—buying shares in 27 stocks across 8 of its funds—citing deflation “in the pipeline”.
The retail army shared Wood’s BTFD mindset as investors bought over $2 billion (bottom chart) worth of the dip, including the biggest one-day buying of S&P 500 ETF SPY since July 2021.
Professional investors, on the other hand, yanked nearly $6 billion out of SPY which was the largest single-day decrease in 5 months.
🐦 Twitter Thread of The Week 🐦
🎙Podcast Recommendations Of The Week🎙
Ravi Gupta who spent his early career at KKR in private equity, the joined InstaCart as their first CFO and now works as a partner at Sequoia.
The talk at length about the unlocks to investing in great businesses and how to manage your personal journey. Importance of family and concentrated goals
Discusses the different dimensions of entrepreneurship at shop and their role of promoting their users.