August DDD

[qldfrog]

"Sectoral alphas after rate cuts"
Surprised that energy could do bad as a result of rate cuts.
Could it be more: energy rises, inflation rises, when energy is going down, rates can be cut...
So rates are cut when energy goes down.
That was the world before.
Now, if we cut rates because the US is going broke, that might be a bit different

 

[divs4ever]

I am stunned looking at the EU positive view by 2/3 of EU population.
After Ukraine, gas debacle, 20y of immigration and safety nightmare, and their complete relative economic collapse they are still hopeful ? Propaganda works.

Stockholm Syndrome , probably terrified they will be locked out of FaceBook , if they give an honest response

 

[ducati916]

Full: https://www.zerohedge.com/markets/j...iggest-history-25-tax-revenue-go-pay-interest





jog on
duc

 

[ducati916]

Oil News:

Ukraine’s incursion into Russian territory, occupying parts of the Kursk region in and around the key pipeline station in Sudzha, have sent European natural gas prices soaring to their highest this year to date.

- Whilst pipeline flows to Europe via Ukraine continue largely uninterrupted, fears of a potential cut-off lifted TTF prices above €40 per MWh ($14 per mmBtu), despite EU gas inventories being 87.6% full and demand generally lagging pre-COVID levels.

- TTF futures have dropped back below €40 per MWh on Tuesday, seeing there is no immediate disruption as both Austria and Hungary confirmed there have been no pressure fluctuations so far.

- With European prices trending higher and Asia-bound arbitrage being the weakest in two months, US LNG exporters will need to decide whether they prioritize higher prices in the short term or healthier demand in Asia.

Market Movers

- Barrick Gold (NYSE:GOLD), the world’s second-largest producer of gold, declared itself ‘ready’ to partner with the Panamanian government for First Quantum’s Cobre Panama copper mine, closed since November 2023.

- Canada’s upstream firm Tourmaline Oil (TSO:TOU) agreed to purchase peer Canadian producer Crew Energy (TSO:CR) for $950 million in an all-stock deal, boosting its presence in Alberta’s Montney shale play.

- French energy major TotalEnergies (NYSE:TTE) has delivered the first-ever fully biofuels-origin cargo of marine fuel to the Singaporean market, sourced from used cooking oil and sold to a Hyundai car carrier ship.

Tuesday, August 13, 2024

As the global markets bounced back from the all-encompassing panic seen a week ago, oil prices were ideally set for a technical recovery, with both Brent and WTI pulling off a string of five straight days of price gains. OPEC’s belated acknowledgment that 2024 demand growth will not be as stellar as they’ve signaled for months has sapped some of that upward momentum, but Brent futures still sit comfortably above $81 per barrel.

OPEC Finally Cuts 2024 Demand Outlook. The Organization of Petroleum Exporting Countries cut its forecast for global oil demand growth in 2024 on the back of weaker-than-expected H1 data and a slacker outlook for China, predicting 2.11 million b/d year-over-year growth, down 140,000 b/d from the previous forecast.

Oil Investors Lose Hope in Bullish Future. Investors have cut their market positions in crude oil futures and options to the lowest level for at least a decade, selling a whopping 110 million barrels in the six most important contracts in the week ending August 06.

Shell Commits to Joint Gas Project with Venezuela. UK-based energy major Shell (LON:SHEL) has taken an FID on the 2.7 TCf Manatee offshore gas field straddling the border between Venezuela and Trinidad and Tobago, slated to start production in 2027 and feed gas to the 15 mtpa Atlantic LNG plant.

Chevron Starts First Ultra-High-Pressure Oil Field. US oil major Chevron (NYSE:CVX) has reported first oil in the Gulf of Mexico’s first-ever field under extreme subsea pressures, as strong as 20,000 pounds per square inch, with the $5.7 billion Anchor project expected to reach output of 75,000 b/d.

Libya Buoys Oil Bulls with Pipeline Fire. A week after Libya’s largest field El Sharara was forced to shut down amidst military protests, the country’s second-largest crude stream Es Sider is set to be disrupted after a fire along the pipeline connecting the port's storage tanks with oil fields.

Major Chile Strike Lift Copper Sentiment. Workers at BHP’s (NYSE:BHP) Escondida copper mine, the world’s largest producing unit, have rejected the Australian mining giant’s collective offer and after the government’s mediation failed to reach any substantive advances, declared industrial action on Tuesday.

Carlos Slim Sets Sight Firmly on Mexican Gulf. Having already farmed into Mexico’s largest upcoming oil project, the Zama offshore field, Mexican billionaire Carlos Slim is now buying up stocks of Talos Energy (NYSE:TALO), purchasing 1.26 million shares in the first week of August and now owning 21.3% of the firm.

Belgrade Pours Cold Water on Rio Tinto’s Lithium Mine. Less than a month after the Serbian government reinstated Rio Tinto’s (ASX:RIO) license to develop Europe’s largest lithium mine in Serbia, the country’s Energy Minister said permits and approvals could take two years to secure.

US to Restrict Future Leases in North Dakota. The Biden administration is set to restrict oil and coal leasing in more than 210,000 acres of federal land in North Dakota, classifying the territories as low potential as only 2% is currently under lease and there is no active production there.

Electric Cars Gradually Take Over the Chinese Market. For the first time on record, Chinese consumers bought more new energy vehicles (NEVs) than gasoline ones, tallying 878,000 units vs 840,000 units, as buyers benefit from generous government subsidies and traction in the car-hailing market.

Iran President Names Industry Veteran as Oil Minister. Iran’s recently elected President Masoud Pezeshkian nominated Mohsan Paknezhad as his oil minister, formerly deputy minister for the supervision of hydrocarbon resources, in what is seen as a sign of Tehran’s policy continuity.

LME Stocks Abound with Russian Aluminium. Defying the April ban of the London Metal Exchange on Russian-origin metals, the share of available aluminum stocks in warehouses approved by the LME rose to 65% in July compared to 50% in June, as Indian supplies have seen a dip to 33%.

Chinese Demand for Saudi Oil Recovers. Chinese term buyers of Saudi Arabian crude oil have nominated 43 million barrels from the September-loading program, slightly lower than the 46 million barrels this month, despite Saudi Aramco raising the OSP of Arab Light to $2 per barrel above the Oman/Dubai benchmark.



Already out of date, gas getting sold down



NVDA and Yen.

Destination for the carry trade?



Make or break time:



Where is the pain?

Definitely lower. But that pain is not to me or you, that pain is to the US Treasury. Tax receipts are beholden to a high and ever higher stock market. A falling stock market kills tax revenues. Tax revenues are already an issue with the debt.

Yellen and Powell do not like each other.

Powell has been tight, Yellen loose with lots of fiscal spending to offset higher rates.

Earnings are suggesting that cost cutting has been responsible for the higher profits and falling revenues. The next step in cost cutting are layoffs...higher UE. That signal is already coming through.

Anyway, technically, quite an important point in the market. We'll find out over the next few days.

jog on
duc

 

[shivahit]

The next step in cost cutting are layoffs...higher UE

Didn't most corporations already aproached that stratedy, I feel like layoffs has been on the table for a long time already

 

[divs4ever]

Didn't most corporations already aproached that stratedy, I feel like layoffs has been on the table for a long time already

i don't know about 'most ' , but yes several large companies have laid off 10% or more of their workforce , some never recovering from 2020 and others needed to trim/shrink the workforce since

 

[shivahit]

i don't know about 'most ' , but yes several large companies have laid off 10% or more of their workforce , some never recovering from 2020 and others needed to trim/shrink the workforce since

Well I think I thought it was 'most' was because of the mediation of their lay-offs I guess.
But what would be the reason behind lay-offs besides money? Don't they need people to keep expanding their bussines?

 

[divs4ever]

Well I think I thought it was 'most' was because of the mediation of their lay-offs I guess.
But what would be the reason behind lay-offs besides money? Don't they need people to keep expanding their bussines?

well several businesses are shrinking ( or failing ) large retailers are closing stores ( in some areas ) because of rampant theft , other industries just aren't travelling well , rising costs and falling revenues , there has been a steady process and of course some are laying off staff because they are changing the company direction ( say automotive manufacturers switching towards electric vehicles from petrol and diesels )

but it started as a trickle , but is now becoming a noticeable flow especially when stores and industrial sheds ( and offices ) are not being filled with new businesses

money is the motivation for sure , but if rising costs are eating into margins , there are only so many levers you can use ( increase productivity , boost output , no always the same improving productivity per employee , trimming material costs , lease/rental costs etc. etc )

 

[shivahit]

well several businesses are shrinking ( or failing ) large retailers are closing stores ( in some areas ) because of rampant theft , other industries just aren't travelling well , rising costs and falling revenues , there has been a steady process and of course some are laying off staff because they are changing the company direction ( say automotive manufacturers switching towards electric vehicles from petrol and diesels )

but it started as a trickle , but is now becoming a noticeable flow especially when stores and industrial sheds ( and offices ) are not being filled with new businesses

money is the motivation for sure , but if rising costs are eating into margins , there are only so many levers you can use ( increase productivity , boost output , no always the same improving productivity per employee , trimming material costs , lease/rental costs etc. etc )

Reading this felt like a revelation, I always thought "greedy company" and that's it.
Now i know that it might also just be because they're failing at being succesful

 

[divs4ever]

some are very greedy ( and that is being polite ) but others are smarter and aim for the long term , and run on relatively small margins ( after all the outgoings ) and avoid 'growth for growth sake ' ( aggressive acquisitions )

 

[qldfrog]

Reading this felt like a revelation, I always thought "greedy company" and that's it.
Now i know that it might also just be because they're failing at being succesful

Irony? Or young age

 

[ducati916]

We're still doing new CEOs in the consumer discretionary sector today, with Victoria's Secret skyrocketing more than 16% after naming industry vet Hillary Super to the top job. The shake-up follows Tuesday's news that Starbucks snagged CEO Brian Niccol from Chipotle, and comes amid reports that activists could be eyeing Nike next; investment bank UBS ramped up its stake by 11 million shares in Q2, per Dealreporter, indicating a possible swap position on the part of an entity like Elliott. VSCO is pacing for its biggest daily gain in years, but the shares are down about 73% from their 2021 highs.

​

U.S. stocks today are mixed, with the Dow Jones Industrials posting a 1-1/2 week high. Weakness in chip stocks is weighing on the overall market. Also, today’s July CPI report was close to expectations, and dampened speculation that the Fed will cut rates by 50 bps next month instead of 25 bps. The S&P 500 Index ($SPX) (SPY) is down -0.03%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.10%, and the Nasdaq-100 Index ($IUXX) (QQQ) is down -0.31%.

​

Fast-money quants, known as commodity trading advisors (CTAs), are famous for monetizing trends using genius-level statistical models, but even a slight trend reversal can be disastrous. While the Nasdaq-100 tanked, CTAs invested billions of dollars in exchange-traded funds with significant exposure to tech giants like Nvidia. They bet the slump would be short-lived and hoped to ride the recovery for historic gains. However, they’ve recently lost over 90% of their 2024 profits. CTAs were up 12% YTD in April as the U.S. economy strengthened despite high rates, the artificial intelligence buzz lifted stocks higher, and the Bank of Japan’s low interest rate deflated the yen. But now, the Societe Generale CTA Index shows the cohort’s 2024 profit is down to 0.2%. The colossal loss came after the Bank of Japan hiked interest rates, and a slowdown in the U.S. job market rekindled recession fears. More significantly, some analysts point to the yen’s rally, driven by an unwinding of a popular investment strategy called the yen carry trade. This strategy involves borrowing the yen at low interest rates and investing the funds in higher-yielding assets elsewhere. It has been popular recently, but a sudden rate hike by the Bank of Japan sparked a global market panic. Once the panic kicked in, many “yen carry” traders exited their positions to cash in paper profits or prevent more enormous losses. As the pre-existing market trend reverses, and more investors run for cover, it wreaks havoc on the high-risk, high-reward approach many quants use. Some quants have the resources to recoup losses in the months ahead, but the reversal of fortune is a stark reminder of why investors should beware of the inherent risks associated with betting big on market trends. Here's one gold stock in focus as the carry trade unwinds.

Mr FFF




So on the Fed rate cuts:



The reason: https://www.bis.org/publ/arpdf/ar2024e1.pdf

To summarise:

"The environment of higher interest rates further weakens fiscal positions that are already stretched by historically high debt levels. Indeed, the support from the negative gap between real interest rates and growth rates (that is, r–g) has shrunk in recent years, is projected to stay much smaller going forward and could even turn positive.


Curbing fiscal space further is rising public spending in the coming years, given the needs stemming from the green transition, pensions and healthcare, and defence.


Though financial market pricing points to only a small likelihood of public finance stress at present, confidence could quickly crumble if economic momentum weakens and an urgent need for public spending arises on both structural and cyclical fronts. Government bond markets would be hit first, but the strains could spread more broadly, as they have in the past. "

It is true that private financial conditions and economic activity do not need looser Fed policy, but sovereign bond markets DESPERATELY need them, because of the US fiscal situation (which through UST markets impacts the rest of the world) and the JPY carry trade, ”g” not far enough above “r” is the root cause of the volatility of the past week.

A significant amount of GDP 'growth' is nominal growth, ie. pure inflation. As CPI inflation falls (whatever the true number is) so GDP growth falls placing UST's under increasing pressure of default.

So MORE INFLATION.



That inflationary growth was achieved via Yellen spending big on the fiscal side.

Small business optimism: https://www.reuters.com/markets/us/us-small-business-sentiment-near-2-12-year-high-2024-08-13/









William Coulman
4H

The Dallas Cowboys, who last won a Super Bowl in 1996, are now worth $10+ billion​

The Dallas Cowboys have become the first NFL franchise to be valued at more than $10 billion, according to a new report from Sportico released yesterday.

Most Valuable NFL Teams 2024: Cowboys First to Top $10 Billion​

The Cowboys are now worth some $10.3 billion: a 12% increase from last year’s $9.2 billion valuation, and an impressive feat for a team that hasn’t even appeared in a Super Bowl since 1996. Although the Cowboys topped Sportico’s list, the Miami Dolphins saw the biggest increase in the top 10, with their estimated valuation jumping 29%, driven by big-name signings and Miami’s booming real estate market.
At the heart of these sky-high valuations are the NFL’s colossal TV deals. The sport’s structure is tailor-made for modern marketing, with commercials easily inserted between plays. This, plus a huge fanbase that ensures the sport dominates the most watched television broadcasts, has helped the league secure the most lucrative TV sports deal to date — a record ~$110 billion, 11-year contract.





Football season is about to resume.


jog on
duc

 

[ducati916]

Last word to Mr FFF



jog on
duc

 

[ducati916]

So, price controls are set to make a comeback, last seen under the peanut, Jimmy Carter:

Kamala wants price controls

The government meddling in the economy will not drive prices down, it will force firms to go out of business and consumers to experience shortages.

reason.com

Watching that Yen



Of course.



Academic. LOL.



I think he means 'disintegration'.

NVDA: https://finance.yahoo.com/news/nvidias-earnings-could-turn-around-the-ailing-ai-trade-173554788.html

NVIDIA Corporation Common Stock is expected* to report earnings on 08/28/2024 after market close. The report will be for the fiscal Quarter ending Jul 2024.​

NVIDIA Corporation Common Stock is expected* to report earnings on 08/28/2024 after market close. The report will be for the fiscal Quarter ending Jul 2024.

How important for the market as a whole are those earnings?

As for trading, the IV on the Options will continue to rise into the earnings release and I think the stock price will also rise into earnings. What happens then is anybody's guess.

The ATH = $140 +/-. I think we see $140 before the announcement (after market close). Which of course means you need to take a guess whether to hold or sell because if you guess wrong, you can't get out (or in) before taking a hit if the stock gaps against you.

jog on
duc

 

[divs4ever]

Denigration - Definition, Meaning & Synonyms

When you badmouth someone or talk scornfully about them (especially when they don't deserve it), that's denigration. If you practice denigration, shame on you!

www.vocabulary.com

maybe not , but it is an awkward use of the word in my opinion (denigration )
now IF the US Dollar had still been 'a gold backed currency ' ... where there is no need for incessant jaw-boning and devaluation via inflation

.. but in an era of cancellation , for deviating from the narrative , maybe Dr. Fly is just confusing the r*****ds with their shiny college degrees

one might also remember the calculation of GDP now seems rather elastic

https://www.investopedia.com/terms/g/gdp.asp
( especially in an era of rampant debt monetization )

interesting times

trying to make us believe the incredible

 

[ducati916]

The bulls are back out in force...



NVDA up almost 20% in the week...



Tech. was ripping.

From the gold thread:



So gold has the deserved reputation of safety.



4 signals in 127yrs.

Something important?

1930 was a sovereign debt crisis brought on largely by the UK collapsing on trying to return to the original gold peg with Sterling, necessitating massive bailouts from Federal Reserve.

1969 was highly inflationary debt based spending from President Johnson's 'Great Society' and financing the Vietnam war.

2002 was gross overvaluation of stocks that had zero or little earnings.

2024 has a sovereign debt crisis due to destroying the industrial productive base, an overvalued stock market, huge (hidden) inflation due to massive deficit spending, overvalued housing market, crashing commercial real estate market and financing decades of losing wars.

jog on
duc

 

[ducati916]

So some conflicting information. This chart says 'retail' led the buying.



This suggests institutional, based on how thick the 'bid' was on Tuesday, Wednesday and Thursday.

The truth is actually important: institutional buying will mean that it will be a little more sticky should the market sell-off (actually it will prevent any sort of sell-off) rather than retail, who will cut and run.

Volume:



I'd say retail. Retail playing BTD. Sticky? Not so much.



After the big retail number last week, only Target really.



Friday is the big data day and Fed Chair speech.



jog on
duc

 

[ducati916]

Yet CC use is at all time highs. Spending on groceries rather than restaurants.



And this is in a 'strong' economy with low UE.

When UE goes above 5% how will this look then? At 10%?

Mr fff






Leveraged ETF to play MSTR and BTC. LOL.


jog on
duc

 

[ducati916]

Yen moving



jog on
duc

 

[qldfrog]

Yen moving

View attachment 182815

jog on
duc

Do we go for another crash round?