July 4, 2023

📰 News Organizations

• Tesla Reports Record Quarter with 83% Delivery Growth. Tesla achieved a remarkable 83% increase in vehicle deliveries during the April-to-June period, surpassing its previous sales record by delivering over 466,000 vehicles worldwide.* With this strong performance, Tesla can sustain a slower growth rate of 24% in the second half of the year and still meet market expectations of 1.82 million deliveries for the full year.

• Saudi Arabia and Russia Extend Oil Supply Cuts to Support Prices. In a move to stabilize oil prices* amid concerns about the global economy, Saudi Arabia will prolong its unilateral oil production cut for an additional month, while Russia announced its own export restrictions by reducing oil exports by 500,000 barrels per day in August.

• Falling Gas Prices Fuel Optimism for Record Holiday Travel. GasBuddy data reveals that the national average for a gallon of regular unleaded gas is $1.34 lower compared to last year, standing at $3.49 per gallon. The decline in gas prices, driven by worries of a global recession impacting demand, has raised expectations for a surge in travel* during the upcoming holiday season.

• World’s Appetite for Solar Panels Is Squeezing Silver Supply. As the solar panel industry develops more efficient cells that require higher amounts of silver paste* for conductive purposes, the growing appetite for solar panels is putting additional pressure on the already-increasing demand for silver.

• EU and Japan Seek Collaboration in A.I. and Chip Technologies. European Commissioner Thierry Breton emphasized the importance of artificial intelligence during his meeting with the Japanese government, expressing the EU's interest in deepening the alliance with Japan and other like-minded nations to mitigate risks associated with China.
  
  

• China Restricts Export of Chipmaking Metals. China imposed restrictions on exporting two metals that are crucial to parts of the semiconductor, telecommunications, and electric-vehicle industries. Gallium and Germanium, along with their chemical compounds, will be subject to export controls starting Aug. 1 in an escalation of the country’s tit-for-tat trade war on technology* with the US and Europe.

• Yellen Set to Visit China This Week in Bid to ‘Deepen Communication’. Treasury Secretary Janet Yellen will travel to Beijing from July 6 to July 9* as part of the Biden administration's strategy to foster improved communication with the Chinese Communist Party on global macroeconomics and financial developments, according to the Treasury Department's statement.

🐦 Twitter

• Markets continue to rapidly reduce rate cut expectations for 2024, now only pricing about 55bps of cuts in the first half of ‘24 (and even that is respecting the possibility of needing to cut 200+bps). Source.
  
  

• The "net" foreign asset position of the PBOC and the big state and policy banks is in fact close to $6 trillion (net of mark to market losses). China is still in fact a big global creditor. It just no longer holds a Treasury and Agency heavy portfolio. Source.
  
  

• Home prices hit smallest decline in nearly four months. The median U.S. home-sale price is down just 0.9% year over year, the smallest decline in nearly four months. That’s due to a lack of homes for sale, with a mismatch between supply and demand. New listings are down 27% from a year ago and pending sales are down 15%. Source.
  
  

• Companies in the S&P 500 that don't pay a dividend were up 18% in the first half of the year vs. a 4% gain for dividend payers. That's the biggest underperformance in dividend stocks since 2009. Source.
  
  

• 22,000 bitcoin taken off Coinbase the last 24 hours. Are BlackRock and Fidelity already starting to accumulate to the spot ETF they know will be approved? Source.

📓 Online Publications

• Twitter Implements Post Limitations, Causing Disruptions for Users. Elon Musk recently announced temporary changes to Twitter, restricting unverified accounts to reading only 600 posts per day, while verified accounts with a monthly subscription can access up to 6,000 posts daily. Afterward, Musk announced further increases to the permitted number of posts, impacting users' engagement on the platform.
  

• Cathie Wood Projects 500% Surge for Tesla. A Monte Carlo simulation conducted by Ark Invest suggests that Tesla could experience an extraordinary 500% increase in the coming years. The implementation of AI-based business models and the expansion of Tesla's energy storage division are anticipated to be key drivers of its future profitability.

• Manufacturing Sector Contracts, ISM Index Drops to 46.0% in June. The manufacturing sector contracted for the eighth consecutive month in June, as indicated by the ISM manufacturing index falling to 46.0%. This decline reflects a contraction in economic activity, with the employment index declining to 48.1% and the new orders index showing a slight improvement to 45.6% compared to the previous month.
  

• Unemployment Numbers Will Spike in Q3. The upcoming third quarter is anticipated to see a notable increase in unemployment as the effects of job cuts from the previous quarters* start to materialize. Rates need to go up again if the Fed really wants to get things under control. With the S&P trading at around 25 times earnings, it means the returns on treasuries are higher.

🎧 Podcasts

• Apple Faces Vision Pro Production Challenges. Sources tell the FT that Apple is making a significant cut to its production forecasts for the Vision Pro. The complexity of the headset design and difficulties in production are behind the scaling back of targets, while plans for a more affordable version of the device have had to be pushed back. Source(0:47)

• Nasdaq Achieves Best Start in 40 Years as Inflation Eases. The Nasdaq index has experienced its most successful beginning to a year in four decades, attributed to an improved macroeconomic landscape. Inflation, although still relatively high, has been declining, and with the Federal Reserve nearing the end of its rate hike program, this positive trend has benefitted the overall stock market. Source(1:25)

• Comcast Options Data Shows a Spike Is Coming. The call buying on June 30 was hotter than usual, says VTM. 95.2% were calls. Options data showed 175,632 contracts traded hands in Comcast. 167,000 of them were calls and only 8,000 were puts. Not only was call buying unusual, but the volume also ballooned on that day. Source(1:14)