October 6, 2023

Dollar Dented by Private Payrolls Report

📰 News Organizations

  • Shipping Giant Maersk to Develop Driverless Trucks. Maersk is experimenting with driverless trucks at its shipping yard in Carson, California, and has partnered with Kodiak Robotics Inc. to test autonomous truck runs from Houston to Oklahoma City.

  • Amazon to Launch Long-Delayed Satellites in Race With SpaceX. Amazon.com Inc. is poised to launch its first two test satellites for Project Kuiper on Friday, to build out a massive internet-from-space constellation to compete with SpaceX’s Starlink.

  • Microsoft and Amazon Face Probe in UK Over Cloud Services. The UK's Competition and Markets Authority is probing major cloud players like Amazon and Microsoft. The inquiry comes after an Ofcom study revealed challenges for customers in using multiple suppliers.

  • LG Energy to Supply EV Batteries to Toyota. LG Energy Solution will invest about $3 billion to establish new production lines for battery cells and modules exclusively for Toyota, with completion slated for 2025.

  • Clorox Sales and Profit Took a Big Hit From Cyberattack. The Pine-Sol and bleach maker said the attack’s aftereffects continue to hurt production and warned that its quarterly sales and profit took a big hit.

  • Dollar Dented by Private Payrolls Report in Reprieve for Yen, Euro. After touching an 11-month high earlier this week, the dollar index, which tracks the greenback against six peers including the euro and yen, flattened at 106.75 after Wednesday's Payrolls report.

🐦 Twitter

  • Bonds maturing in 10 years or more have slumped 46% since peaking in March 2020, just shy of the 49% plunge in US stocks in the aftermath of the dot-com bust. The route in 30-year bonds has been even worse, tumbling 53%. Source.

  • A potential blowout in credit spreads remains one of the most compelling macro trades at the moment. Despite the bloodbath in fixed-income securities worldwide, corporate high-yield spreads appear to be unsustainably suppressed. Source.

  • 10% of consumers were actively searching for a home to purchase in September, unchanged from March. If you do the math, that's about 13 million households actively shopping. There are around 1.5 million new + existing homes for sale nationally. Source.

  • Mortgage purchase applications in the US have fallen to their lowest level since 1995. The average American household simply cannot afford the average home price at current mortgage rates (7.7% for 30-year fixed). Source.

  • The 30-year mortgage rate is settling into range, evidenced by pace of year/year change easing sharply but that still doesn’t take the bite out of 7.35%, which is highest since 2000. Source.

Beware of buildings with apartments at rents exceeding those of single family homes in comparable, nearby neighborhoods. When the “new car smell” fades, there’s a long way for those rents to fall.

Moses Kagan

📓 Online Publications

  • UBS Launches Pilot for Ethereum-Based Money Market Fund. Represented as a smart contract on the Ethereum public blockchain, the pilot allows UBS Asset Management to track various activities, including fund subscriptions and redemptions.

  • ETH Retraces After Futures ETF Launches Fall Flat. Despite the slew of asset managers lining up to launch their own Ethereum ETFs, their Oct. 2 launch manifested as a sell-on-the-news event. Seven debuting Ether ETFs drove just $1.7M worth of volume on Oct. 2.

  • Canadian Exchange to Start Bitcoin Futures Trading. TMX Group, the largest Canadian exchange, said that its derivatives trading platform will soon introduce bitcoin (BTC) futures contracts to meet rising market demand for digital cryptocurrency asset classes.

  • XRP Leads Crypto Rally After SEC's Appeal Bid is Rejected. The uptick came after a U.S. federal judge rejected the Securities and Exchange Commission's bid to appeal a partial loss in an ongoing case against Ripple.

  • Bank of Korea to Start CBDC Infrastructure Pilot. The pilot will include private banks and public institutions, while the Bank for International Settlements (BIS) will provide expert technical support. The BOK is going to test both retail and wholesale CBDCs.

🎧 Podcasts

  • Bankman-Fried’s Fraud Trial Begins. Sam Bankman Fried faces potential life imprisonment if found guilty on all counts. The trial not only focuses on his personal criminal liability but also raises questions about the broader viability of the cryptocurrency sector. Source(3:43)

  • Oil Prices Start to Cool Off. Oil prices saw their biggest one-day drop in over a year, falling to about $85 a barrel from nearly $98 last week, erasing September gains after Russia and Saudi Arabia extended voluntary production cuts. Source(4:36)

  • Stability in Gold, Convexity in Bitcoin. Buying Bitcoin and gold is an active choice to leave the fiat money system. Gold is seen for stability, while Bitcoin offers convexity, creating a metaphorical garage with both a stable SUV and an exhilarating motorcycle. Source(21:18)

  • Small Caps Signal Economic Slowdown. Small caps indicate a probable economic slowdown, but not a crash. The potential stabilization of retail or transportation could lead to economic stagnation rather than a steep decline. Source(15:37)

  • Ozempic to Impact Multiple Industries. Ozempic can help potentially save airlines millions in fuel costs with lighter passengers because of less fuel consumption. Meanwhile, it can also cause a projected 3% decline in snack consumption by 2035. Source(2:14)