DHUnplugged #688: Big BIG Week

HUGE Earnings – Most impactful week of quarter.

China continues to try to save markets

Push Back? Powell Meets Markets Wednesday.

PCE – FED FAV – The Latest.

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Warm Up
-  Jury Duty?

- Big Week for ECO - Jobs Report Friday
- Penmanship - making a comeback?
- Is this a Capitulation Moment - China?
-- War Brewing - Dragging US into Mid-East Conflict?

Market Update
- HUGE Earnings - Most impactful week of quarter
- China continues to try to save markets
- Push Back? Powell Meets Markets Wednesday
- PCE - FED FAV - The Latest

- Sirius XM Holdings Inc. has acquired certain exclusive rights to SmartLess, the hit podcast hosted by actors Will Arnett, Jason Bateman and Sean Hayes, as part of a larger deal between the satellite radio company and SmartLess Media.
- The three-year accord is worth more than $100 million, according to people familiar with the matter who asked not to be identified.

- Tickets to attend the Super Bowl in Las Vegas — a rematch between the 2020 contenders — are the most expensive ever for the event, going for an average $9,815 each so far, according to reseller TickPick.
- The price is 70% more than last year’s game, which was held in Arizona. The previous record of $7,046 was set in 2021 in Tampa, Florida, when the game was played at sharply reduced capacity

Rate Hike Probabilities
- First move for markets from Oct '23 was the HOPE and LOVE of Fed Rate Cuts to come - As soon as March
- (The we got the AI 'rager' that helped support Bull markets)
- - NOW, Rate CUT hopes fading - markets ignoring facts
--- Rate Cut Chart Odds - Fading

Rate Cut Odds

Reporting this week:
- Alphabet, Amazon, Apple, Meta, and Microsoft
--- Huge components for NAZ100 and S&P500

- Microsoft was expected to report a 15.8% jump in quarterly revenue, its best growth in nearly two years, as rising adoption of its products infused with generative AI fuels demand for its cloud services.
---- Microsoft's Q2 revenue was $62.02 billion, a 16% increase, surpassing the estimate of $61.14 billion.
----- Earnings per share (EPS) were reported at $2.93, beating the consensus by $0.16.
-- Stock even A/H

- GOOGL company achieved a YoY revenue increase of 13.5%, reaching $86.31 billion, surpassing expectations.
- Google Advertising reported $65.52 billion in revenue, showing an 11.0% YoY growth but falling short of expecations.
-- Stock Down 4% AH

More Earnings - TSLA
- Horrible!
- Earnings per share: 71 cents, adjusted vs. 74 cents expected.
- Revenue: $25.17 billion vs. $25.6 billion expected.
- Operating margin for the quarter came in at 8.2%, down from the year-ago quarter's figure of 16%
- Tesla said in its investor presentation that vehicle volume growth in 2024 "may be notably lower" than last year's growth rate as the company works toward launching its "next-generation vehicle" in Texas.
- Stock down 14% on the news
---- Stock market cap still down 40% since purchase of Twitter in 2022

- Met expectations but guided DOWN
- So much for the big rise based on NOTHING!
- Stocks DOWN 10%

Tech Layoffs
- Silicon Valley’s tech companies are slashing headcount at a rapid pace.
- Since the start of January, some 23,670 workers have been laid off from 85 tech companies, according to the website Layoffs.fyi.
- Some are laying off staff in parts of the business to invest more heavily in developing AI products.

- The China Securities Regulatory Commission has said that investors will no longer be able to lend out shares for trading purposes for a set period of time. (AKA Short Selling Ban)
- Regulators said the change, which comes into force from Monday, is about “creating a fairer market order”.
- More restrictions on securities lending in the refinancing market are expected to be introduced in March.
- China’s $1.24 trillion (£1 trillion) sovereign wealth fund has purchased exchange traded funds (ETFs) and bank shares, while the country’s largest stockbroker has suspended short selling for some clients. (DIRECT INVESTMENT BY GOVERNMENT)

- Some big news in property sector
- A court in Hong Kong has ordered the winding up of Evergrande Group, the world’s most indebted property developer, dealing another blow to investor confidence as China’s ailing real estate sector continues to weigh on its economy.
- The liquidation order, made by the city’s High Court on Monday, comes after the embattled Chinese real estate giant and its overseas creditors failed to agree on how to restructure the company’s massive debt during talks that lasted for 19 months.
- Is this a capitulation moment?

Asia - Some Good News
- Could be China's Pain is Other's Gain?
- Vietnam’s exports climbed at the fastest pace in more than two years in January, a performance attributable largely to a weaker year-ago showing than a return of global demand.
- The value of overseas shipments increased 42% from a year earlier, official data showed, compared with the median estimate for a 31% increase in a Bloomberg survey of economists.
- Imports rose 33.3%, while the trade surplus widened to $2.92 billion.

- Starting this year, California grade school students are required to learn cursive handwriting, after the skill had fallen out of fashion in the computer age.
- Assembly Bill 446, sponsored by former elementary school teacher Sharon Quirk-Silva and signed into law in October, requires handwriting instruction for the 2.6 million Californians in grades one to six, roughly ages 6 to 12
-Cursive lessons for the "appropriate" grade levels - generally considered to be third grade and above.

PCE - Personal Consumption Expenditures
- PCE - The Fed's Preferred Measure or The Fed's Favorite Gauge (of Inflation)
- The core personal consumption expenditures price index for December, an important gauge for the Federal Reserve, increased 0.2% on the month and was up 2.9% on a yearly basis.
- Including volatile food and energy costs, headline inflation also rose 0.2% for the month and held steady at 2.6% annually.
- Consumer spending increased 0.7%, stronger than the 0.5% estimate. Personal income growth edged lower to 0.3%, in line with the forecast.
----- GDP coming in strong, Employment Strong, PCE still will above 2% = What's wrong with this picture?

Nothing Compared to..
- Inflation running at 65% YoY
- Lira hit a new record LOW against the USD
- Last week, Turkey's central bank on hiked its key interest rate by another 250 basis points to 45%.

Why are stocks going up?
- Norway’s $1.6 trillion wealth fund added to its bets in the biggest technology companies last year after interest in artificial intelligence drove a surge in the sector.
- The fund, the world’s single-biggest owner of publicly listed stocks, raised its holdings in Apple Inc, Microsoft Corp, Alphabet Inc., Amazon.com Inc., according to a list of holdings Norges Bank Investment Management publishes once a year on its website.
- It also upped its stakes in the world’s two most valuable chip firms, Nvidia Corp. and Taiwan Semiconductor Manufacturing Co., as well as chip

Middle East
- The killing of three U.S. troops and wounding of dozens more on Sunday by Iran-backed militants is piling political pressure on President Joe Biden to deal a blow directly against Iran, - BUT WILL HE?
- Biden's response options could range anywhere from targeting Iranian forces outside to even inside Iran, or opting for a more cautious retaliatory attack solely against the Iran-backed militants responsible, experts say.
- But Will HE?
- American forces in the Middle East have been attacked more than 150 times by Iran-backed forces in Iraq, Syria, Jordan and off the coast of Yemen since the Israel-Hamas war erupted in October.

China - Medical Funding?
- A congressional committee focused on China has introduced a bill that would restrict federally funded medical providers from allowing China's BGI Group, WuXi Apptec and other biotech companies from getting genetic information about Americans.
- The House select committee on China, led by Republican congressman Mike Gallagher, said the legislation unveiled on Thursday is aimed at BGI Group and its subsidiaries MGI and Complete Genomics, along with WuXi Apptec, according to a statement.
- It would restrict the government's Medicare and Medicaid health programs from using BGI, which would slash its market in the U.S., a person briefed on the bill said.

Boeing Update
- Bad press all around
- Stock moved from $262 to $205 since December
- A door plug that broke off midair from an Alaska Airlines passenger plane during a flight earlier this month may have been missing bolts meant to secure it in place when the aircraft left Boeing’s factory, according to a report. (BAD)
- United Airlines looking at Airbus for next round of orders
- Going to take a lot to bring back confidence

- iROBOT deal scrapped
- In November, EU regulators said they feared a deal with Amazon would restrict competition in the robot vacuum market because the e-commerce giant could potentially block other firms from selling on its website. (What does this mean?)
- Roomba-maker iRobot announces it's laying off 31% of employees after Amazon deal falls through
- Stock down sharply

Alzheimer’s disease, the most common form of dementia, can be broken down into two types.
--- “Sporadic” cases usually occur in people over 65.
---- Rarer “familial” ones are associated with a handful of mutations that run in families. Symptoms can begin in a patient’s 30s.
-------- But evidence is mounting that a third, much rarer type exists as well.
---------- A paper published on January 29th in Nature Medicine describes five people with early-onset Alzheimer’s who may have contracted it from treatment with human growth hormone (HGH) given when they were children. If that is indeed what has happened, it would establish a third “iatrogenic” form of the disease—one that is transmitted by medical procedures.

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