July 9, 2023

📰 News Organizations

• Job Growth Slows in June, Falling Short of Expectations. The Bureau of Labor Statistics reports that the U.S. economy added 209,000 new jobs in June, lower than the downwardly revised figure of 306,000 in May, and below the consensus estimate of 225,000. This marks the lowest level of job creation during President Joe Biden's tenure in the White House.

• Apple Plans Exclusive In-Store Rollout for $3,500 Vision Pro Headset. Apple is preparing to launch its Vision Pro headset with a unique retail strategy, featuring appointment-based access and in-store promotion in selected U.S. markets starting early next year. The company will establish dedicated areas within stores, equipped with tools and demo materials.

• Birkenstock Owner Explores IPO at Over $6 Billion Valuation. L Catterton, the private equity firm supported by luxury fashion house LVMH, is considering strategic options, including an initial public offering, for Birkenstock. The renowned German sandal maker could potentially be valued at over $6 billion in an IPO, with LVMH's firm collaborating with Goldman Sachs and JPMorgan on the listing.

• Hyundai Surpasses GM in U.S. EV Sales, While Tesla Maintains Dominance. Hyundai Motor, along with Kia, has overtaken GM in terms of U.S. sales of EVs, but still trails behind industry leader Tesla by a significant margin. According to data from Motor Intelligence, Tesla, led by CEO Elon Musk, maintains a lead of approximately 300,000 all-electric vehicles over legacy automakers.

• Meta's Threads Explodes to 70 Million Signups. The text-based social media product already has 70 million sign-ups, Meta CEO Mark Zuckerberg said on Friday. Company data revealed that users had already generated over 95 million posts and 190 million likes on Threads by Thursday afternoon. Twitter’s new competitor experienced explosive growth within its first full day since its public launch, propelled by its integration with Instagram's extensive user base.

🐦 Twitter

• Small Caps haven't gotten much love this year but is it time to take a look at them? The Russell 2000 to S&P 500 ratio is at its lowest point in more than 20 years. Source.
  
  

• Percentage of S&P 500 members with new 12w highs (orange line) dropped to 9% as of yesterday’s close, down from last month’s peak of 28%. Source.
  
  

• Magic number for home builders on mortgage rate buydowns has been anything at or below 5.5%. As market mortgage rates inch towards 7.25%, builder rate buydowns will cross above that 5.5% 'magic number' threshold. It'll still be a below market rate, but appeal of 6% is untested. Source.
  
  

• S&P 500 still above the Aug '22 peak and equal-weight consumer discretionary vs consumer staples above the Feb peak. As long as both of these hold, any weakness would be perfectly normal. If one, or both, broke then we'd have more warning signs. Source.
  
  

• The Fed's balance sheet hit its lowest level since August 2021 this week, down $667 billion from its peak in April 2022. Some perspective on how much the balance sheet expanded in 2020-21: it's still $4.1 trillion higher than where it ended 2019. Source.

📓 Online Publications

• US Homes Sell Above Asking Price For First Time Since Last Summer. The average sale price nationwide just exceeded 100% of list price for the first time since August of last year, according to a new market report from Redfin released on Thursday. For the first time in years, homes are peaking around 100 percent of list price, instead of, say, 2 percent above list price as in recent years.

• Nvidia's Next $300 Billion Revenue Opportunity is Hiding in Plain Sight. The company has long touted a total addressable market of over $1 trillion. Investors might be surprised to find that $300 billion of that opportunity is tied to the auto industry. Nvidia estimates that there will be in the neighborhood of 100 million vehicles per year that will require hardware for assisted driving and autonomous systems.

• ExxonMobil Is Back on Top in The Energy Space. Exxon has managed to maintain a leading position in the energy space -- or at least most of the time, anyway. Notably, it is back on top when it comes to return on invested capital (ROIC). The company's production is heading higher despite asset divestitures.

• It’s Been Another Positive Quarter for Bitcoin. The cryptocurrency has exhibited strong price performance, outperforming other assets and showing increased market capitalization dominance. The network data indicates growing usage, transactions, and hash rate, while liquidity remains relatively muted, and long-term holders are reluctant to sell at current prices.

• Housing Prices Are Defying Expectations. Housing prices have not only managed to avoid a crash but there is also a possibility that the slight correction in prices has already come to an end. In April, the housing price index for the 20 largest metropolitan areas indicated a 0.9% seasonally adjusted increase compared to March, demonstrating a national rise in housing prices instead of a decline.

🎧 Podcasts

• US Borrowing Costs Soar to 16-Year High As Markets Roiled By Jobs Data. The data showed that the US gained nearly half a million private sector jobs last month. That’s roughly double what economists expected, and it’s the biggest rise in more than a year. Because of those figures, investors are anticipating more interest rate rises from the Federal Reserve and bigger cracks in the economy. Source(1:11)
  
  

• UPS Stock Falls. Union Says Labor Deal Talks Collapse. The possibility of a strike by UPS workers, with their large unionized workforce of 340,000 employees, could have far-reaching economic repercussions, including disruptions in package deliveries and potentially becoming the largest single-employer strike in US history. Source(18:41)
  
  

• Stocks and Bonds are Underestimating the FED. Julian Brigden thinks that the bond market's logical response to the inverted yield curve reflects a hawkish perception of the Federal Reserve (FED), but there is a risk that it may be incorrect, which could have negative implications for the real economy and certain companies in the equity market. Considering this, shorting both bonds and stocks could be a viable trading strategy as one of them is likely to give. Source(8:33)
  
  

• Investing Tactics Has Shifted. According to Dave Meyer, host of Bigger Pockets podcast, the BRRR strategy has lost some of its allure, while flipping properties has become more intriguing. Current data suggests that the housing market correction presents favorable opportunities for flipping, as stable prices are on the rise while properties in need of extensive renovation are experiencing a more significant correction. Source(22:03)
  
  

• Threads Takes the Spotlight with Impressive Downloads. Scott Galloway thinks this is probably the best product launch of 2023 so far because of how easy it is to use and it didn't take years to build who to follow because it lets you follow your list from Instagram. Kara Swisher says that while it's still lacking some features, one of the good things about Threads is it's promoting decentralization. Source(16:40)