July 11, 2023

📰 News Organizations

• Affordable Housing Faces Depletion as Rental Agreements Expire. Over the next five years, the United States risks losing nearly 200,000 affordable housing units as a wave of agreements that supported low-income renters approaches expiration. Landlords will have the option to transition from government programs to charging market rates for their units.
  

• Threads Surpasses 100 Million Users Shortly After Launch. In less than a week, Meta Platforms Inc.'s alternative to Twitter, Threads, has already reached 100 million users, as announced by CEO Mark Zuckerberg. The growth has been primarily organic, with limited promotional efforts implemented so far, indicating a strong demand for the platform.
  

• Midsized Banks Brace for Mergers Amid Regulatory Scrutiny. A seismic shift is anticipated in the US banking landscape as midsized banks face pressure from rising interest rates, losses in commercial real estate, and increased regulatory scrutiny, leading to an expected wave of mergers. Regional banks like Zions and KeyCorp, have already warned of declining revenues.

• TSMC Exceeds Sales Expectations Fueled by AI Demand Surge. TSMC has reported better-than-expected sales driven by the booming demand for artificial intelligence applications, which require greater chipmaking capacity from the industry-leading firm. With second-quarter revenue reaching NT$480.8 billion ($15.3 billion), a 10% decline compared to the previous year but better than feared.

• China Faces Deflation Concerns as Consumer Inflation Remains Flat. Consumer prices in China were flat in June and factory-gate prices fell further, prompting economists to warn of deflation. China’s hugely anticipated post-Covid Zero rebound has largely disappointed. Instead of revving up consumer spending at home and driving demand for overseas goods and services, the world’s second-largest economy appears to have fizzled only months after exiting its pandemic-era hiatus.

• Yellen's China Visit Shows Potential for Improved Relations. U.S. Treasury Secretary Janet Yellen described her visit to China as "constructive" and highlighted the substantial meetings held with Chinese officials, signaling opportunities for enhanced bilateral relations and the potential for more frequent future engagements.

🐦 Twitter

• U.S. rental vacancy rate reached a low of 4.1% in October 2021 and has been on rise since ... now hovering near 7.1%, which is third-highest in index's history. Source.
  
  

• Hedge Funds have flipped to a Short U.S. Dollar position for the first time since March. Source.
  
  

• Taking another look at the 10-Year Treasury Yield. Not only has it broken out of its downward trend that began in October 2022, but a Golden Cross is about to hit with the 50 Day moving average potentially crossing above an upward sloping 200 Day moving average. Source.
  
  

• The US dollar is as strong as it was at the turn of the century. Tons of people locked and loaded US stocks, all-in on Growth stocks too. Just like in the year 2000. That episode gave way to not only Emerging Markets clobbering the US, but Value clobbering Growth. Source.
  
  

• Stocks have rallied even in the face of much higher rates. "If the Fed is trying to solve for tighter financial conditions, it's not being very successful:" Fidelity's Timmer. This "suggests that the Fed is not as restrictive as we may all think" & the neutral rate is above 3-4%. Source.

📓 Online Publications

• Carl Icahn Secures Relief from Lenders Amid Short-Seller Attack. Carl Icahn has reached amended loan agreements with banks, providing him breathing room as his personal loans are no longer tied to the trading price of his company's shares, a risk highlighted by the short-seller. The agreements also include increased collateral and a repayment plan spanning three years.
  

• Used-Car Prices Fall by the Most Since the Start of the Pandemic. Wholesale used-vehicle prices decreased 4.2% in June from May. The 4.2% drop is among the largest declines in MUVVI history and the largest decline since the start of the pandemic in April 2020 when the index plunged 11.4%. Used car prices are expected to stabilize following a major decline in June.

• Rapid Rate Hikes Raise Recession Concerns. Concerns arise as the Fed raises rates at an unprecedented pace, leading to major bank failures and a looming recession. Anthony Pompliano argues that despite claims of a strong consumer and tight labor market, warning signs such as a contraction in households' net worth and a rise in retail money market funds indicate the need for careful observation, especially as credit tightens and labor markets potentially weaken.
  

• Apple Inches to Rumored Apple Car. Apple has submitted a patent application for a seat headrest featuring "user tracking" technology, aiming to improve audio control. The proposed headrest includes one or more speakers embedded within it, enabling occupants to enjoy superior audio output. This innovation leverages spatial audio.

🎧 Podcasts

• Wall Street Braces for Largest Loan Loss Increase Since Pandemic. Big US banks are set to report their second-quarter earnings, expected to reveal the most substantial surge in loan losses since the onset of the pandemic. Additionally, the pandemic cash that came in from the government and other assistance programs has run out. Source(1:20)

• Vietnam Emerges as Key Supply Chain Hub Amid Business Shifts from China. Global manufacturers are redirecting their operations away from China to safeguard supply chains against geopolitical tensions and risks exposed during the Covid-19 lockdowns. Vietnam has become a pivotal destination for many manufacturers, with foreign investment reaching its highest level in a decade last year. Source(5:01)
  
  

• FDA vs Prime Energy Drink. Senate Majority Leader Chuck Schumer asked the FDA to investigate Prime, the hot new energy drink created by YouTube superstars Logan Paul and KSI. The problem Schumer and health experts have with Prime is that it contains an egregious amount of caffeine and it’s incredibly popular among teens and kids, for whom egregious amounts of caffeine can have negative health impacts. Source(12:00)
  
  

• Threads' Success Hinges on Engaging Twitter Users. Facebook's Threads app benefits from a simple one-click sign-up process through Instagram, but the 70 million signups remain relatively low compared to Instagram's billions of users. The ultimate success of Threads will depend on its ability to attract and engage Twitter users that are already addicted to the platform's features and daily usage habits, says David Sacks. Source(13:25)
  
  

• The Fed is Orchestrating a Soft Landing. Brad Gerstner thinks the Federal Reserve is pursuing a soft landing strategy despite initial market resistance and concerns about inflation. The economy has proven resilient, with indicators like job openings and the ADP jobs report suggesting a healthier outlook, supporting the possibility of a more gradual rate hike trajectory. Source(30:50)