Sunday, June 30, 2024

This Week in Barrons: June 30, 2024

“Are you better off today … than 4 years ago?” If you believe that we’re constantly improving ourselves – then the answer is: Yes. But, are we SMARTER today than we were 4 years ago? That is where things start to get a little dicey. Technology has made us more capable and efficient, and opportunities grow simply due to larger liquidity pools. But, where are with we in terms of Intellectual Firepower? In order to beat what’s coming, we must be smarter (not just better off). Our businesses are definitely getting smarter while our politicians continue to get dumber. We cannot continue to kick-that-can down the road. We can fix this. What would happen if we all refused to dumb-things-down? What if we required everyone to step-up and do-their-homework – before engaging in conversation? Yes, we’d have to choose between: Learning vs ‘Tik-Tok’, and between: Engaging our Brains vs ‘Instagram’. Personally, I’m tired of dumbing s!@# down. Often the truth is just too complex, and in the not-to-distant future you will absolutely be required to be: Smarter than a 5^th Grader.

If you’re arguing for Free-Speech… then I must believe that you have something to say that’s worth listening to. Separately, all rational thought is based upon tests and improvements. Therefore, I assume you’re open to changing your mind based upon data, tests, results, and improvements. Because one without the other is worthless.

Pinocchio got it right? Pinocchio had a hard time having people believe his lies – because his nose got longer every time he didn’t tell the truth. We’re not very good at seeing invisible or gradual clues. If it’s important – Make it Visible. Create signals that shows us how we’re impacting the future. Per Seth G: Businesses gain competitive advantages by measuring & showing-n-telling elements others overlook.

The Market:

We got it all wrong with Inflation? We’re measuring the wrong stuff – on purpose. Past Treasury Sec. Larry Summers recently showed that all of the interest rate increases drastically accelerated the real inflation rate. He blames the increased real inflation on the current (fake) CPI measurement techniques. It seems that the BLS intentionally removed elements from the inflation calculation that became too expensive – like interest expenses. Larry said: “Pre-pandemic, borrowing costs associated with our mortgage and car payments were included in the CPI – and currently they are not. Therefore, when interest rates jumped, official inflation calculations did not fully capture the effects it had on the consumer. By incorporating those borrowing costs, inflation would have peaked last year at 18% - and not the 9% that our BLS told us.” The difference between 9% and 18% is a Big Difference. We can debate why interest payments were removed from the CPI calculation. But, what is not in question is that even with the CPI coming down – those interest payments have no end in sight.

The UBS investment team reported:

If Democrats sweep the Oval Office, House, and Senate – stocks will fall due to the potential for higher corporate tax rates, and regulatory oversight.
If Republicans sweep – stocks will rise due to less regulation, the potential for more M&A, and lower corporate taxes.

In both scenarios, choppier trading will be with us through the end of this year.

Learn more about World Copper here….

( https://worldcopperltd.com/discover-the-zonia-advantage/?utm_campaign=HTPRLE7BU5&utm_source=beehiiv&utm_medium=bh3&_bhiiv=opp_e5616700-fdb8-4d7a-8c12-acdc65c9dc8a_71c6556d )

InfoBits:

Friday was the last trading day of Q2, 2024… and both the S&P500 and Nasdaq100 went out at their highest quarterly closes in history – for the third consecutive quarter.

U.S. home ownership costs have risen 26% since 2020… adding an average of $1,510/mo. due to increased maintenance and property taxes.

Consumers are generally concerned about inflation… and are becoming more concerned about the job market.

Startups that raised money in the 2021-2022 bull run… are likely running out of money around now.

The 2 big EV hurdles are range anxiety and affordability. Americans are keeping their cars, trucks and SUVs for a record 12.6 years.

20 percent is the average rise in YoY car-insurance premiums.

Amazon is working on an AI chatbot to be launched in September.

EV maker Rivian just scored a $5B investment from Volkswagen.

Waymo fully opened its self-driving robotaxis in San Francisco… after the service has been offered in Phoenix since October 2020.

Containerships are backed up… as cargo vessels avoid the Suez Canal because of Houthi rebel attacks and the Panama Canal as it struggles with drought. Freight prices could rise to near pandemic highs.

The Supreme Court ruled that the U.S. Gov’t could… urge social media companies to take down content it believes to be misinformation.

SpaceX has landed an $843m NASA contract… to "de-orbit" the International Space Station in 2030.

Show me ‘da money… Researchers found that Stadium Projects have NOT resulted in any notable returns for taxpayers. The only revenue increase seems to be the increased income taxes being paid by the team’s high-priced players.

Crypto-Bytes:

Bitcoin lies at the bottom end of its trading range… and assuming that the primary trend remains intact, then this is a natural area to anticipate buyers to step in and drive prices higher into the end of the year.

The majority of Japanese Institutional Investors… plan on investing in crypto over the next 3 years.

Mt. Gox will start distributing $9B in Bitcoin in July. Current young holders are getting scared that all of that will be sold immediately. Professionals are just taking it in stride.

Chamath Palihapitiya says Bitcoin will hit $500k by Oct. 2025… and thinks Bitcoin’s post-halving scarcity and its emerging status as a global reserve asset will drive the price.

Analysts say crypto could mark the new “Trump trade”.

Javier Milei, Argentina's president, is doubling down on Bitcoin… pushing for a free market of digital currencies. His pro-BTC stance is a big win for the crypto community and aims to curb the country's addiction to money printing.

On the heels of the Ethereum ETF… VanEck filed for a Solana ETF with the SEC.

TW3 (That Was - The Week - That Was):

Monday: Mt. Gox holds over 140,000 bitcoins in bankruptcy. Bitcoin fell after Mt. Gox said it would start repaying crypto to creditors who lost their assets in a hack of the defunct platform more than a decade ago. Repayments are expected to start in July and be made in bitcoin and bitcoin cash. If bitcoin falls below its $60,000 trading support range, its next support levels is $51,500.

Tuesday: NVDA has a shareholder meeting tomorrow, and tomorrow MU will report earnings. If both do well, the entire AI sector will probably explode. I'm watching HAL here. After a big plunge two weeks back, it's been forming a decent "W" shape, and W's usually resolve to the upside. I'd take a shot at it over yesterday’s high of $34.62.

Wednesday: Take a peek at BROS – the chart looks interesting.

3 Morgan Moments…

Spot Bitcoin ETFs in the US… have suffered net outflows for 8 consecutive trading days.
Crypto-Bears talk about… the upcoming Mt. Gox repayments, miners selling BTC, and the Fed holding interest rates steady – as near-term ‘reasons’ for Bitcoin’s weakness.
Crypto-Bulls say… that they expect Bitcoin to reach a new all-time high above $73,000 in the coming months due to inflationary pressures, a potential FED interest rate cut, and continued institutional adoption.
D-ID (www.d-id.com) is an AI tool… that allows you to create a fully customizable, conversational AI avatar in a few steps – without coding:

Go to the D-ID website – log in/sign up to get free credits.
Click "Create" and select "AI agent" to access the creation tool.
Choose your AI agent's appearance from pre-generated avatars or upload your own, and configure its name, language, voice, and knowledge sources.
Once it’s ready, select “Create Agent” and start a conversation!

Next Week: Q2 is finally in-the-books…

Bkg… Against an ‘interesting’ geo-political backdrop, we have more: same-old / same-old. We have mixed signals and mixed performance within markets and across assets. (a) The Nasdaq faces mixed short-term signals (tailwind vs warning). (b) The top 10 stocks virtually never remain on top. And (c) our capital markets activity continues to remain sluggish vs historical norms.

Q2 went out with a whimper… drifting down 0.26% on Friday. But, don’t let that fool you – the S&Ps will close up a healthy 5.1% for the quarter. Don’t be distracted by the end-of-quarter selling because much of that is being driven by institutions engaged in quarterly rebalancing and corporate window-dressing.

Retail will take 2 steps back… before it takes one step forward. Names such as: Nike (NKE), Walgreens (WBA), and others will need a couple quarters to regroup before investors wander back in their direction.

Don’t give up on tech… because along with Amazon (AMZN), Apple (AAPL) and Google (GOOGL) there are names that I like such as: Crowdstrike (CRWD) and Microsoft (MSFT). We also have some strength in bitcoin miners / up-and-coming data centers such as Marathon Digital (MARA) and Hut 8 (HUT).

I also like Biotech for Q3… because I’d like to see Biotech (BTK) emerge as a market leader as this market cannot keep living according to the will of the tech sector alone. I believe that healthcare (XLV) and biotech (BTK) are more than capable of stepping up to the plate, and helping guide this market higher through the end of the year.

TIPS:

HODL’s: (Hold On for Dear Life)

13 to 17-Week Treasuries @ 5.44%
Physical Commodities = Gold @ $2,336/oz. & Silver @ $29./oz.
**Bitcoin (BTC = $61,300 / in at $4,310)
**Ethereum (ETH = 3,380 / in at $310)
HROW – Harrow Health == $20.9 / in at $12
INDA – India ETF ($55.8 / in at $50) / BOT Nov, +$53 / -$55 Call Sp.
**IBIT – Blackrock’s Spot Bitcoin ETF ($34.1 / in at $24)
**MARA – Marathon Digital = ($19.9 / in at $12) / Sold Sept $30 Cov-Calls
**RIOT – Riot Bitcoin Mining ($9.1 / in at $12.5) / Sold Sept $16 Cov-Calls

** Crypto-Currency aware

Follow me on StockTwits.com to get my daily thoughts and trades – my handle is: taylorpamm.

Please be safe out there!

Disclaimer:

Expressed thoughts offered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, R.F. Culbertson, contributing sources and those he interviews. You can learn more and get your subscription by visiting: <http://rfcfinancialnews.blogspot.com/>.

Please write to Mr. Culbertson at: <rfc@culbertsons.com> to inform him of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference <http://rfcfinancialnews.blogspot.com/>.

If you'd like to view R.F.'s actual stock trades - and see more of his thoughts - please feel free to sign up as a StockTwits follower - "taylorpamm" is the handle.

If you'd like to see R.F. in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing:

https://www.youtube.com/watch?v=K2Z9I_6ciH0

Creativity = https://youtu.be/n2QiPSe_dKk

Investing = https://youtu.be/zIIlk6DlSOM

Marketing = https://youtu.be/p0wWGdOfYXI

Sales = https://youtu.be/blKw0zb6SZk

Startup Incinerator = https://youtu.be/ieR6vzCFldI

To unsubscribe please refer to the bottom of the email.

Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations. Mr. Culbertson and related parties are not registered and licensed brokers. This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document. Please make sure to review important disclosures at the end of each article.

Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.

Remember the Blog: <http://rfcfinancialnews.blogspot.com/>
Until next week – be safe.

R.F. Culbertson

<mailto:rfc@culbertsons.com>

http://rfcfinancialnews.blogspot.com

Sunday, June 23, 2024

This Week in Barrons: June 23, 2024

When’s the last time you heard a GOAT utter those 3 words… as words to live by? Back in the day, there were 2 dominate players: Mickey Mantle in the American League and Willie Mays in the National. Depending upon where you lived – one or the other was your GOAT. Mickey played for the N.Y. Yankees, and was a wild card that could strike out as easily as he would hit a game winning blast. Willie played in San Francisco, and was more down-to-earth. He didn't need to find a spotlight because he was good enough that the spotlight followed him.
I saw Mickey when the Yankees would play the Orioles in Baltimore. And I saw Willie Mays when the Giants would play the Phillies in Philadelphia. I only heard about The Catch from my dad years after it occurred in 1954. Mays had tracked down Cleveland’s Vic Wertz’s deep ball, on a dead run, reaching blindly outward – in front of him, and then immediately threw the ball back to the infield so that the runners would not advance. I grew up with The Catch in my vocabulary. That was a time when the middle class was larger (no billionaires). That was a time when we needed more information – instead of having too much. A time when our heroes had no idea how much they meant to us. It was written that Willie used to play 2 hours of stick ball with the kids in the street, on gameday – before heading to the ballpark for his afternoon game. Willie played with a: smile, grace and humility. All of my friends (myself included) wanted to be Willie Mays. We all just wanted to: ‘Play Ball’. R.I.P. Willie Mays – you truly made-a-difference.

It’s all Perspective… Per Seth G: The person you’re working with won’t know what you know or see what you see. It’s tempting to teach them your ways and starting point. It’s more useful to let them teach you their ways, and begin where they are.

The Market:

Investor & Entrepreneurial Greed… Fisker (FSRN) filed for bankruptcy this week. It was just another example of Investor & Entrepreneurial Greed not allowing a young company the time to grow up and mature. Everyone was fixated on building out a product at the expense of the people and the services required to run the operation. Currently, (a) sub-contractor Magna has stopped production of Fisker’s main vehicle. (b) The engineering firm that was co-developing Fisker’s sub-$30,000 Pear EV and their Alaska pickup is suing Fisker – calling these projects into question. And (c) Fisker (via press release) put itself up for sale while in Chapter 11. There have been 3 other EV startups that recently filed for bankruptcy: Lordstown Motors, Arrival, and Electric Last Mile Solutions. However, the fate of Fisker won’t change the fundamental problems associated with Investor & Entrepreneurial Greed – taking a young company public (via SPAC), before it is ready to grapple with big-company issues – such as bringing a not-ready-for-prime-time product to market.

In a nutshell… We can’t take too much from last week’s action due to the huge amount of rebalancing that was going on throughout the entire marketplace. We had the largest options expiration ever on Friday ($5.5T), and we need to see next week – how risk is repositioned.

Get started with Value Investor Daily for free…

InfoBits:

- Retail sales came in light for May… the headline showed a rise of 0.1% but x-auto's were negative by 0.1% – and that’s in inflated dollars not units.

- Mortgage refinancing rates are +7% for landlords… all while office space values are falling ~37% over the past 2 years. [Not a great look for small ‘n mid-sized banks.]

- The U.S. Surgeon General is asking Congress for a new warning label… “Social Media carries significant mental health risks for adolescents.”

- Snowflake’s hackers… are demanding ransoms ranging from $300,000 to $5m per client company.

- The DOJ is suing Adobe for concealing termination fees… and making it difficult for subscribers to cancel their subscriptions.

- A year ago, over 7% of US adults said they had used crypto… which is a constituency large enough to decide this year’s Presidential Election.

- Meta will split its business and research unit into 2 parts… Metaverse and Wearables – resulting in more layoffs.

- The FTC has referred a case involving TikTok… to the DOJ for potential violations of the Children’s Online Privacy Act.

- Apple says good-bye to… Buy Now – Pay Later.

Crypto-Bytes:

- “Today we’re happy to announce a major win… for Ethereum developers, technology providers, and industry participants. The SEC will no longer be bringing charges alleging that sales of ETH are securities transactions.” This notice from regulators confirms that the SEC (like the CFTC) will classify Ethereum as a commodity moving forward. That will allow ETH’s ETFs to be approved as soon as July 2^nd.

- David Hirsch, the SEC’s top crypto enforcer for ~9 years… has thrown in the towel and announced his immediate departure.

- Tether launched aUSDT… the first decentralized stablecoin backed by gold (XAUT). It’s more sustainable than ETH-backed stablecoins, as gold’s price is more consistent and its depositors do not expect massive yields.

- “Crypt-NO” said Biden to last month’s bipartisan crypto bill… that would have made it easier for banks to custody customers’ crypto.

- Bitcoin's volatility is hitting all-time lows… signaling a new level of market maturity. In contrast to the wild swings of previous years, BTC’s 60-day volatility remains under 50%.

- A large part of the crypto universe is in oversold territory… aka registering an RSI value of less than 30. Altcoins have received significant haircuts, but spikes like these often coincide with previous market lows.

- The Ethereum / Bitcoin ratio shows us that… ETH is beginning to outperform BTC. It’s NOT an uptrend until we see the ratio make a higher high, but it could suggest that altcoins are setting up to outperform Bitcoin.

- Standard Chartered is diving headfirst into crypto… with a new spot trading desk for BTC and ETH. Standard Chartered is one of the first global banks to offer direct trading for cryptocurrencies.

TW3 (That Was - The Week - That Was):

Tuesday: Tip #1: Buy RKLB over $4.90. The economy is creaking and groaning, and the market is happy about that, because it means that we are closer to FED rate cuts. Today, the Retail Sales report came in after a monumental plunge in consumer sentiment that produced the lowest reading in over 7 months. It showed that rising prices, and higher rates are exhausting people's personal savings. The headline number came in with a rise of 0.1%, and without autos it FELL 0.1%. But retail sales are reported on gross numbers, not unit sales. In other words, while sales totals may show that people are spending slightly more – the actual increase is due to price increases and not increases in the actual number of units that went out the door – they have declined. This ripples down the supply chain: with less units being sold you need less employees, truck drivers, and warehouse workers. And as inventories climb, you will stop suppliers from sending product.

Friday:

- Tip #2: Buy SIRI over that $2.93… just buy the stock.

- Tip #3: Buy GE above its 50-day… buy the Dec. ‘24 $170 Calls.

Morgan’s Moments…

- Top Line… LinkedIn is rapidly becoming the professional social media. To circulate new and engaging LNKD posts – try:

o Signing up to Taplio for free

o Try exploring viral content from their library of 5m+ posts.

o Craft your post, and write your draft with the help of their AI assistant.

o Schedule and have Taplio publish your new post on LinkedIn.

- Bottom Line… the economy is contracting much faster than the official numbers tell us. That is why politicians are so desperate to keep the market moving higher. So, job one at the FED & the White House, is to keep this market up at all costs. Ignore the Leading Economic Indicators – that fall every month. Forget falling consumer confidence, retail sales, fading home sales, and all the other ugly reports. All that matters is the illusionthat the economy is doing well. Can they keep up the charade all the way into the election? Yes, it's very possible. All our FED / Treasury need to do is: (a) print a lot more money to (b) continue buying our debt in order to (c) drop our Treasury yields, so that (d) investment dollars continue to flow into equities.

Next Week: “We had $5.5T in options Expire”

Bkg: Friday was the largest options expiration ever – when $5.5T worth of derivatives expired. Massive positions (and risk) came off the books. That amount of risk expiration ($5.5T) is bigger than Japan, France, and all but 2 world economies.

Massive positions came off the books… because many of the June 21 settlements had been on the books for over a year. Nvidia (for example) had 100,000+ options (Puts + Calls) on hundreds of strike prices – expire both due to rebalancing and risk relief. The gamma squeeze in NVDA had almost become self-fulfilling – and last Friday’s expiration broke that momentum. Tip #4: Watch early this week for any increased volatility resulting from last Friday’s options expiration.

That Capital moved from NVDA & META… directly into AMZN, GOOGL, and MSFT. The tech sector remained virtually unchanged – just the names have been slightly modified. Capital also rotated into Energy (XLE) and into the Financials (XLF). One way to see if this move continues is to watch the Advance / Decline line. Tip #5: If a move away from NVDA is going to stick, we should see +80% correlation across the A/D line early next week.

Opportunities in Gold (GLD) and Treasuries (TLT)…

- With our dollar showing incredible strength: Tip #6: BUY the GLD: +$125 / -$127.5 Call Spread, July 26 expiration.

- Lately, the direction of TLT has been to the upside: I believe that bonds will resume their downward slide (rates will move higher): therefore: Tip #7: BUY a TLT: At-the-Money PUT Spread, July 26 expiration.

SPX Expected Move (EM):

- Last Week’s EM: $65 and we finished +$40

- Next Week’s EM: $62 even with GDP, PCE, and Jobless Claims data being released. Also, look for Volatility (VIX) to pick-up in the trading week.

TIPS:

HODL’s: (Hold On for Dear Life)

- 13 to 17-Week Treasuries @ 5.44%

- Physical Commodities = Gold @ $2,334/oz. & Silver @ $29.5/oz.

- **Bitcoin (BTC = $64,350 / in at $4,310)

- **Ethereum (ETH = 3,500 / in at $310)

- **ChainLink (LINK = $13.6 / in at $7.78)

- HROW – Harrow Health == $21 / in at $12

- INDA – India ETF ($54.6 / in at $50) / BOT Nov, +$53 / -$55 Call Sp.

- **IBIT – Blackrock’s Spot Bitcoin ETF ($36.5 / in at $24)

- **MARA – Marathon Digital = ($19.2 / in at $12) / Sold Sept $30 Cov-Calls

- **RIOT – Riot Bitcoin Mining ($9.5 / in at $12.5) / Sold Sept $16 Cov-Calls

- TGB – Gold Miner == $2.5 / in at $2.7