Threads vs Twitter:
Twitter has been mismanaged since 2006, but was still ‘crusin’ with a virtual monopoly – until last week. Last week – Threads rocked Twitter’s world to the core. Here are 3 people’s impressions of what happened:
1. Per Fred W.: To me, Threads is about two really important things:
a. Competition for Twitter. Long overdue and badly needed. Competition keeps you honest. Competition makes you hustle. Competition forces you to innovate. Competition makes you better.
b. The emergence of a widely supported social media protocol. Which should produce a vibrant and interoperable social media ecosystem.
I’ve got some questions in my mind about how all of this will work. What will privacy and identity look like in this “vibrant and interoperable social media ecosystem?” But the ability to even ask those questions and ponder the answers is a gift. Thank you Threads.
2. Per Bob L: Every vertical is all about community. Community is the hardest lift, and the biggest climb. It doesn't matter how good your idea is, it comes down to distribution. Most people are overwhelmed by their current lives, don’t like change, and want less clutter – not more. In a world split into narrow niches, I’ll be interested to see how Threads is performing 6 months from now.
3. Per Howard L: I have always been too close to Twitter because the product was so perfect when it began. It was silly, fast, light, fun, open, hard to use, and buggy. The company was born out of a pivot from a podcast product called ‘Odeo’. The open Twitter ecosystem was compelling and even fostered fear ‘n greed as it grew. Twitter was the wild west. If you were interesting and unique, you could share and actually be heard. But, Threads is not the wild west and it won’t stay a happy place for long. And, Twitter is not as bad as the haters would have you believe.
The Market:
The 1st half of 2023 is in the can…
- Despite our FED hiking rates faster than has ever happened, the market simply went higher. Yes, most of the move was 7 stocks doing a lot of heavy-lifting, but this first half was the best since 1983.
- Remember the market adage: “Don’t Fight the FED?”
- The disconnect between the actual economy and the height of the market – is the largest that it’s ever been.
- Market sentiment has gone from 2008 crisis levels to outright bullish, retail inflows are re-surging, and bullish speculation is back.
- Remember Alan Greenspan’s adage: “Markets can remain irrational longer than you can remain solvent.”
Throwing-Shade or Shedding-Light: Shedding-light takes a lot more effort.
- Throwing-shade is probably more fun – but quickly runs out of energy.
- Throwing-shade is designed to end conversations – not to start them.
- Throwing-shade is designed to intimidate – not to encourage.
- The only thing Shedding-light does – is to Help Everyone.
If it’s a skill… then it may be worth learning.
- Teaching is a skill – but knowing a craft doesn’t mean you can teach it.
- Selling is a skill – but owning & caring is not the same as selling.
- Being in the right place and Just showing up – are not skill sets.
InfoBits:
- EV sales are on the rise… reaching 7% of all U.S. car sales in Q1 2023, up from 4.6% a year earlier, and potentially 10% of the US car market by next year.
- Morgan Stanley says: "Only 29% of federal student loan holders will be able to start making payments without adjusting spending, 37% expect to cut back in other areas, and 34% will not be able to make payments at all."
- "Inflation seems pretty sticky and embedded globally. I don't see that getting resolved relatively quickly. So, we might not have a recession, but we could also have a period with 0-1% growth and 4% inflation – that will feel like a recession, even though it's not technically one." … Goldman Sachs CEO David Solomon.
- Tesla Q2 deliveries increased +83% YoY to 466k… can full self-driving (FSD) become Tesla's next barrier-to-entry? Tesla could launch FSD years ahead of its competitors, which would be reason enough to buy a Tesla.
- ISM manufacturing PMI for June was the lowest in three years.
- Apple’s performance is causing headaches for fund managers. Their 49% YTD rally pushed its market cap. over $3T and its weighting in the S&P 500 to 7.6% – the largest of any single stock in the index’s history.
- Russia pledged to reduce crude oil exports by 500k barrels/day… after Saudi Arabia extended its 1m barrels/day cut.
- Markets are pricing in a rate hike of 25 bps on July 26.
- 20% of those who financed a new vehicle in Q2 2023… committed to an all-time high monthly payment of +$1,000. This the same country where 45% of the population can NOT find $400 for an emergency.
- FOMC members expect rates to reach 5.6% by year-end… suggesting the possibility of two more quarter-point rate hikes this year.
- U.S. VC funding is down -13% QoQ and -48% YoY… with ‘down rounds’ continuing to increase.
- The average U.S. 30-Year mortgage is +7.2%... the highest level this year.
Crypto-Bytes:
- Bitcoin / BTC in July:
o 2020: Open: $9,136.04 / Close: $11,334.59 / Net: Bullish +24%,
o 2021: Open: $35,019.70 / Close: $41,700.10 / Net: Bullish +19%, and
o 2022: Open: $19,922.82 / Close: $23,314.43 / Net: Bullish +17%.
- BlackRock refiled paperwork for a Bitcoin ETF… after the SEC said their previous filing was incomplete.
- “Instead of investing in gold as a hedge against inflation and/or currency devaluation – bitcoin is an international asset that can be played as an alternative.” … BlackRock’s CEO Larry Fink (aka Bitcoin’s CMO).
- Crypto-related job openings in major U.S. cities… are down as much as 80% from their highs in 2022, when Miami and NYC sought to become crypto hubs.
- Bitcoin is now up 85% YTD... while Gold is up 5%, the S&P is up 16%, and the Nasdaq is up 40% YTD. The majority of Bitcoin’s performance has occurred during U.S. trading hours – following the Blackrock ETF filing.
- In Q2, the number of Bitcoin addresses with over 1 Bitcoin… breached 1m for the first time.
- Former Chairs: SEC’s J. Clayton and CFTC’s Tim Mossad… are proposing an incremental approach to regulating the crypto market. They suggest that the SEC and CFTC should develop basic investor and market protection standards for trading platforms. This approach would simplify regulation, focus on core issues, address the current market landscape, and avoid the need for extensive legislation.
TW3 (That Was - The Week - That Was):
Monday: Last week gold prices declined, while Treasury yields move higher. U.S. stocks ended the month/quarter/first-half strong with robust gains as the long anticipated economic recession failed to materialize.
Wednesday: China announced a decision to restrict the exports of two metals used in chips and EVs: gallium and germanium. All the while, Pres. Biden plans to curb China’s access to MSFT’s and AMZN’s cloud computing services.
Thursday: The 10-year yield is again eyeing the 4% level – a level not seen since the implosion of Silicon Valley Bank in March. The 2-year bond is just a few basis points shy of 5%, and close to its highest level since 2006. Markets are pricing in an 89% probability that the Fed will raise interest rates by 25 basis points at their July 26 meeting. The ADP jobs report hit. It was expected to show 220k new jobs created, but instead it said that 497k new jobs were created. Instantly the DOW lost another 100 points because it gives Powell more fodder to do more rate hikes.
Friday: The 10-year Treasury yield is at 4.06%, its highest in about 4-months. The 2-year yield is holding just above 5% after yesterday’s ADP report more than doubled job estimates, showing the US economy continues to remain strong. The Gov’t Jobs Report came out at 209K - which was less than half of the ADP number.
AMA (Ask Me Anything…)
Legendary singer and musician Sir Elton John… performed his last concert of his farewell tour, taking the stage in the Swedish capital of Stockholm. The 76-year-old Brit said that he wants to spend more time with his husband and children. Dubbed "Farewell Yellow Brick Road" – homage to his 1973 album – the global series has become the highest grossing concert tour of all time, bringing in close to $925m. Elton has grossed just under $2B on tour during his 60-year career, and also holds the solo artist record for most tickets sold, at more than 20m. FYI: the current tour has surpassed 5.7m attendees at over +330 shows.
Next Week: When Will Good News = Good News?
The S&Ps took a mild hit last week, but the NASDAQ did not: The NASDAQ is still in the driver’s seat with these markets, and they finished the week unchanged. The S&Ps, the financials, and the energy sector all finished the week lower – but not mega-tech.
Markets are taking their direction from Tech… and that’s because we’re still dealing with Good News = Bad News for the markets and vice versa. Tip #1: When Good News = Good News for the markets (and vice versa) is when I will switch back to being a market bull.
ADP, Jobs, and our FED… The ADP report showed that we added +400k new jobs during June. Markets sold off on that news, but our Government’s Jobs Report showed that number to be closer to 209k. This makes a rate hike at the next FED meeting (July 26) to be a foregone conclusion, but remember just 60 days ago when the market was predicting ‘rate cuts’ by now.
Where does the 10-Year rate (TNX) break markets? On Thursday we cracked above 4%, and on Friday we breached 4.1%. I realize people have proclaimed AI the next coming, but if there’s a single bearish signal to these markets – it’s the 10-Year being over 4%. Last October markets panicked when the 10-Year touched 4.3% - let’s see if they have the same reaction? The last time we saw risk-free rates at these levels was 2008 to 2010.
In General… I’m not seeing a correction, but rather a buyers strike. I have little doubt that Powell will raise rates in a few weeks. His job seems to be to crush small business and surround people with debt, and he’s slowly making that happen. Next week, I could see a little more fade before the buyers come back. As an aside, there’s a lot of talk suggesting that the BRIC nations (Brazil, Russia, India & China) have decided to back a percentage of their currencies with gold – in order to equalize valuations across countries. Let’s see if it comes true.
SPX Expected Move (EM):
- Last Week: $54 (3.5-day week)
- Next Week: $59 (5-day week) … Tip #2: Watch for bonds to keep falling and rates to continue rising until Volatility rises and PUT buyers step into this market.
TIPS:
HODL’s: (Hold On for Dear Life)
- PHYSICAL COMMODITIES = Gold @ $1930/oz. & Silver @ $23.3/oz.
- 13 Week Treasuries @ 5.45%
- **Bitcoin (BTC = $30,400 / in at $4,310)
- **Ethereum (ETH = $1,875 / in at $310)
- Apple (AAPL = $190.68 / in at $177)
- Big Bear Holdings (BBAI = $2.11 / in at $2.90)
o BOT Sept $4 CALLS for $0.35
- DNN – Denison Mines ($1.22 / in at $1.32)
- DKNG – DraftKings ($26.65 / in at $25)
o BOT Jan 2024: +25 / -$40 Call Spread for $1.30
- MESO – Mesoblast Ltd. ($3.93 / in at $3.60)
o SOLD July $5 CALLS for $0.85
- NFGC – Newfound Gold ($4.84 / 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!
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