Remember MJ’s famous quote: “Republicans buy sneakers too.” And Charles Barkley saying: “Just because I can dunk a basketball doesn’t mean I should raise your kids.” Today’s athletes and celebrities are more outspoken, but they are still athletes and celebrities. When they’re wrong – we shower them with relentless criticism in exchange for paying them the ‘big bucks’. Which begs the question: “Where are CEOs when they fail and screw up a business?” CEOs get paid ‘big bucks’ too. Where are the difficult interviews with all of those SPAC CEOs or bank CEOs who burned their shareholders? Those are the stories I want to hear. Forget about LeBron or T. Swift – gimme the interviews with the people that made the exact wrong move when the ‘big bucks’ were on the line. Gimme the accountability.
The first thing that a CEO needs to ask themself is… "Would you care about what you’re doing – if you weren’t the CEO?” … Allie Egan.
Inconvenience is just what the doctor ordered. Inconvenience will transform your project into something special. Inconvenience means that most people can’t be bothered. Inconvenience means that it’s scarce. The stuff that matters is almost always inconvenient. If it’s not, you’re probably mistaken about what really matters.
The Market:
Sales is a Lost Art: Most things are bought – not sold. We decide that we’re interested in something, and we go shopping to get it. Sales is special. It’s interactive, generous, dynamic problem-solving, and personal. Selling brings individual focus, connection, and tension to each customer. Selling takes time, effort, and money. Many companies believe that their new product will sell itself from Day 1 – but that’s unlikely. Why do we pretend that we don’t need sales, when the highest paid people in virtually every corporation are the salespeople?
Last week the SEC sued Coinbase… and Chair Gary Gensler said: “Coinbase’s alleged failures deprive investors of critical protections, rulebooks that prevent fraud and manipulation, proper disclosure, and safeguards against conflicts of interest.” Which begs Grant William’s question: “I’m curious, why aren’t the SEC and @GaryGensler suing Jim Cramer to force him to have a giant disclaimer tattooed on his forehead.” C'mon Gary... you're either protecting retail investors or you're not?
Per AK:
- Are we in a winter of despair? High interest rates, debt overhang, money-supply overhang, a commercial real estate time bomb, and pending corporate-earnings blowups. Feel free to add Ukraine, Taiwan, and Biden-Trump part deux.
- OR, Are we in a spring of hope? Maybe inflation and rate increases are nearing the end. The U.S. is a relative haven of stability compared with the rest of the world. White-collar layoffs and blue-collar labor shortages are starting to peter out. Banking has stabilized. A radical restructuring of work is happening right before our eyes – and maybe that triggers a productivity revolution?
- Unfortunately, only one of these can be true.
InfoBits:
- Saudi Arabia will cut oil production by 1m barrels/day in July… taking its production to the lowest level for several years.
- The Treasury will kick off a borrowing spree… that could top $1T by the end of the third quarter. JPM believes the liquidity drain will knock 5% off equity performance this year.
- Morgan Stanley believes that… US corporate earnings will drop 16% this year.
- "I think inflation is still too strong, too sticky, and the FED is not finished. I think they have 2 to 4 more tightenings." – BlackRock CEO Laurence Fink.
- April’s U.S. Global PMI reading… showed the fastest expansion in a year.
- The IMF believes… that there hasn’t been a significant slowdown in lending, and therefore our FED needs to do more tightening.
- Amazon is in talks with major wireless providers… to offer low-cost cell service to U.S. Prime members.
- The first new nuclear reactor built in the US in over 40 years… is going online in Georgia. Nuclear power is growing as concerns over oil-prices and sustainability mount.
- Lionel Messi will join Inter Miami… rejecting a $400m/year deal from Saudi’s Al-Hilal. He’s been offered a profit-sharing deal with Adidas and Apple.
- Volvo unveils one of the least expensive EVs on the market… the EX30 starts at $34,950 and offers a 275-mile range. Unfortunately for U.S. buyers, it’s not eligible for a U.S. federal EV tax credit because it’s assembled in China.
- “So in the same way that Mac introduced us to personal computing and iPhone introduced us to mobile computing, Apple ‘Vision Pro’ will introduce us to spatial computing” – Apple CEO Tim Cook.
- The EV-charging-companies, GM, and Ford all said… that they will make Tesla-compatible charging stations. Sounds like a standard to me.
- While longtime critics of WeWork might cheer its demise… a collapse could be a shock to the weak commercial real estate sectors in San Fran. and N.Y.C.
- Sir Paul McCartney will use AI and John Lennon’s voice… to create a final Beatles record due to be released later this year.
- U.S. retail sales rose 0.3% in May… showing that consumers remain resilient due to the tight labor market.
Crypto-Bytes:
- The SEC vs Binance & Coinbase: Same shirt – different day:
o Crypto is global: If the U.S. continues down the path of becoming more abrasive to this technology, it is highly likely that global adoption will accelerate. I’ve probably heard every argument on both sides about whether these assets are securities or not – and I have no clue. The industry needs clarity and it appears that is what we are going to get.
o Senator Bill Hagerty: “The SEC is weaponizing their role to kill an industry. They allowed a company to list publicly (Coinbase), and then stonewalled their attempts to register. Expect to hear from Congress.”
o Senator Cynthia Lummis: “The SEC’s continued reliance on regulation by enforcement continues to harm consumers.”
o Jim Cramer: “All these crypto assets seem to be fraudulent, and I want you to get out of them.”
o Brian Armstrong (Coinbase CEO): “We came in, hat in hand and said, 'Chair Gensler, you've asked people to come in and register. Respectfully, we're here to register. What would you like us to do? What process would you like us to go through?' And his response was, 'Talk to your lawyer. I'm not here to advise you.’”
- It’s hard to argue with Data:
o BTC has outperformed crypto since the last industry all-time-high.
o BTC holders are unmoved by the recent regulatory shake-ups.
o BTC hashing rates are crossing all-time highs on a weekly basis.
o Major enterprise leaders use BTC as a store of value.
o In 2023, Bitcoin has gone up more than 50%, while gold is +6.2%.
o Taken together = disproving digital cynics is a ‘When’ – not an ‘If’.
- BlackRock submitted a Bitcoin ETF filing this week:
o Their ETF would track Bitcoin’s price more closely and with lower fees.
o To prevent manipulation, BlackRock has partnered with the NASDAQ, and partnered with Coinbase for the custodial duties.
o BlackRock filed while the SEC is taking an enforcement-first approach – which means they feel confident in their due diligence.
o BlackRock (the world’s largest asset manager) has confidence in the Bitcoin asset class.
o OR, maybe they’re just keeping their hat in the ring in case Grayscale wins its lawsuit. So BlackRock could be just covering its bases.
TW3 (That Was - The Week - That Was):
Tuesday: So, the market is putting in 52-week highs all across the board, and the reason for it is because inflation is running at 5.3%. Ok, but everyone knows that inflation isn't at 5.3%. The Federal Reserve's own data shows consumer prices (less food and energy) are not slowing down. Is that a reason for markets to go straight up?
Wednesday = FED NOW – PAY LATER: When the fed statement hit at 2 pm, I had a hunch it was going to be full of hawkish verbiage, and it was. Of course, they skipped doing this hike, 4 of the governors want at least 1 more hike, and the majority want 2 more hikes. They see inflation remaining higher than they expected, and want rates to end at 5.6%. Policymakers see cuts “a couple of years out” as inflation risks remain.
Friday: Thursday’s move higher just wouldn't stop.
- Thursday’s 1-day Call Option buying in the SPX hit an all-time-high.
- The SPX made a 1-month momentum high, and pushed the VIX higher.
- US Industrial Production growth slowed to 0.2% YoY.
- We are in a bubble. Bubbles last longer than you think, never make sense, always end badly, but when they're alive – they’re breath-taking to watch.
AMA (Ask Me Anything…)
Apple is coming for your Eyes: Per HL: Apple has taken what others before have done, added Apple design and software touches, and now the world must pay attention. The Apple ‘Vision Pro’ seamlessly blends the real and digital worlds – making it the first Apple product you look through and not at. Its OS allows users to browse rows of app icons by looking at them. Forget the form factor for a moment because like ski goggles you won’t wear these everywhere. Buy them to wear and zone out on airplanes, trains and ubers while you enjoy great content. The high price is a feature not a bug. Apple is coming for the eyes – they have your ears, wrist, and wallet.
Startup Incinerator: A one-time Silicon Valley darling, Zume sought to automate pizza making by having robots quickly assemble pies that were cooked in mobile kitchens en route to customers. The problem: the cheese kept sliding off the pies in transit. Pizza tech issues caused the company to park its vehicles, and then close the pizza biz. Zume has become a mascot for the exuberant era of venture-capital investing that peaked in 2021. You see, Zume raised nearly $500m from investors like Softbank – and once had a $2.3B valuation.
Next Week: Markets STRESS the SHORTS…
- Gamma Squeeze + Short Squeeze = Last Week: (a) On Thursday, a record number of 1-day SPX Call Options were purchased, (b) When we pierced 4211 on the SPX, a near record number of shorts were prepared for Quad-Witching on Friday, and (c) Our Gov’t was still injecting liquidity into our Banks. Those elements combined to form a parabolic 2-Sigma rally.
- Moves higher are not what they appear: But the AI theme in the NASDAQ (QQQ’s) has legs. You may want to pick up some of the usual suspects: MSFT, NVDA, META – on a pullback.
- Data doesn’t lie:
o Our FED & ECB signaled at least 2 more hikes ahead… nobody cared – yet.
o Our CPI and PPI remained hot, and Jobless Claims rose substantially… nobody cared – yet.
o Next week, 50% of the S&P will have to stop buying back their own stock – due to the stock buyback ‘blackout’ occurring 2 weeks ahead of a new reporting season.
o The indexes are extended and expensive.
o I’m looking for some backing and filling from what’s been a mania market. So, they may try and rush us higher Tuesday, but by the afternoon we get soggy and the balance of the week we fade from these levels. For next week, a bit of caution is warranted.
- Trades:
o #1 = Do NOT Sell PUTS into this market move.
o #2 = ADBE… It broke through the $468 level. If it’s above 468, I like it to touch $600 over the next 3 months.
o #3 = HSBC… I like buying HSBC January $40 calls for $2.00 or less. If the stock can’t hold above $38, then I’ll exit my position following any close below that level.
o #4 = SHOP… I like buying SHOP again over $64.50 with an $82 target. If you wish, buy the January $65 or $82 calls.
o #5 = VTNR… It's an energy company that has gone from $6 to $9, back to $6 and then to $11, and down to $7 and back up to almost $11 – and now back down to $6. It may be on its way back up to $11, but make sure that it can hold this $6 level first.
- SPX Expected Move (EM):
o Last Week EM = $65
o This Week’s EM = $51 (4-day week)
TIPS:
HODL’s: (Hold On for Dear Life)
- PHYSICAL COMMODITIES = Gold @ $1970/oz. & Silver @ $24.3/oz.
- 13 Week Treasuries @ 5.28 to 5.6%
- **Bitcoin (BTC = $26,400 / in at $4,310)
- **Ethereum (ETH = $1,720 / in at $310)
- Apple (AAPL = $185 / in at $177)
- Big Bear Holdings (BBAI = $2.51 / in at $2.90)
o BOT Sept $4 CALLS for $0.35
- DNN – Denison Mines ($1.25 / in at $1.32)
- MESO – Mesoblast Ltd. ($3.99 / in at $3.60)
o SOLD July $5 CALLS for $0.85
- NFGC – Newfound Gold ($4.86 / in at $3.75)
o SOLD July, Oct. & Jan. $5.00 CALLS
Follow me on StockTwits.com to get my daily thoughts and trades – my handle is: taylorpamm.
Please be safe out there!
Disclaimer:
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