DHUnplugged #691: Lying Flat

Japan makes surprise crypto move.

AI dating coaches are coming
– Markets plunge – then rebound nicely
– AI Buying AI stuff
– Cure for Frostbite?

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Warm Up
- AI dating coaches are coming
- Markets plunge - then rebound nicely
- AI Buying AI stuff
- Cure for Frostbite?

Market Update
- Japan - really pumping the risk assets
- China government making $$ moves
- China: Latest Problem: Lying Flat
- Whoops - What is an extra ZERO anyway?

 Follow Up----
- USA CPI came out HOT!
- January PPI increased by 0.3% (Briefing.com consensus 0.1%), with the previous figure revised to -0.1% from -0.2%. Meanwhile, January Core PPI rose by 0.5% (Briefing.com consensus 0.1%), and the prior number was revised to -0.1% from 0.0%.
- The significant message from the report aligns with the conclusion drawn from the unexpectedly high January CPI report: whether the market opts to overlook this data due to seasonal adjustments, the Federal Reserve is unlikely to dismiss it.
- The Fed is likely to perceive it as a reason to maintain a patient approach in terms of potential rate cuts.

Market Hysteria
- The Russell 2000, sank 4% on Tuesday, but ultimately settled 1.1% higher on the week. The market-cap weighted S&P 500 declined 0.4% this week, but the equal-weighted S&P 500 jumped 0.7%.
- The Russell was DOWN 4% on Tuesday after the hotter than expected CPI report.
- In addition to the hot CPI reading, market participants also digested a below-consensus Retail Sales report for January, an unexpected drop in jobless claims to 212,000, and a hotter-than-expected PPI report for January.
-The 2-yr note yield settled 15 basis points higher this week to 4.65% in response to this week's data and the 10-yr note yield rose 11 basis points this week to 4.30%. (Briefing.com)

Japan Crypto News
- Japan inched closer to allowing venture capital firms and other investment funds to hold digital assets directly, after Prime Minister Fumio Kishida’s administration agreed to submit a revised bill to implement the change.
- His cabinet approved the text of a bill on Feb. 16 that seeks to partially amend the country’s industrial competitiveness enhancement act, according to a statement published on the Ministry of Economy, Trade and Industry’s website. The bill states that “measures will be taken to add cryptoassets to the list of assets that can be acquired and held by investment limited partnerships,” referring to a vehicle used by venture capital firms to secure capital for investments.

- China’s southern province of Hainan moved to cut down-payment ratio for first-time homebuyers, the latest region in the country to ease mortgage policies to boost slumping home sales.
- Minimum down payment for first homes was cut to 20% from 25%, according to a Monday report by Hainan Daily. The ratio for second homes remains unchanged at 30%, the outlet reported, citing a government notice without saying when the measure would go into effect.

More China
- China's market opened after the long Lunar New Year break with a thud.
- China looks to be still buying directly into markets to prop up
- Reports about pre-pandemic level spending on goods and travel, especially during the Lunar New Year did not lift the mood much

China's Newest Concern: Lie Flat
- "lie flat", a Chinese term used to describe people who work just enough to afford to spend their time on what they enjoy.
---- Not like Japan Inc of the 1980's
- Although there is no data on how many young Chinese are opting out of corporate jobs that they traditionally would have taken, the youth jobless rate rose to a record high of 21.3% in June 2023 amid an economy still struggling to return to pre-pandemic growth levels,

- As markets hit or move closet to all-time-highs
-The UK and Japan both fell into recession at the end of last year, marked by two consecutive quarters of contracting activity.
--- Now Germany is #3 biggest economy (Moves ahed of Japan)
- While the euro area is expected to avoid a downturn, the European Commission still sees the bloc growing slower than initially forecast this year. And in Australia, the unemployment rate climbed to the highest level in two years, consistent with expectations for its
- US still has a pretty economic story it is telling

With that...
- Goldman Sachs lifting their year end target for the S&P 500 to 5,200 (5% upside)
- Previously projected 5,100 in January
- Before that projected 4,700 in December
----- SO, they have no idea what is going on, no ability to project out more than a month or so, just keeping tight to current levels
------ THEREFORE, why would anyone believe these predictions?

New SEC Rules
- US regulators will begin requiring hedge funds to confidentially share more information about their investment strategies.
- New rules approved on Thursday will require firms to provide more details to watchdogs, including on investments, borrowing and counter-party exposure. The Securities and Exchange Commission and Commodity Futures Trading Commission described the new regulations, which were proposed in 2022, as a way to better keep

Shall We? AI News
- AI dating services are already making their way into the hand of millions of single people
- OpenAI and other apps helping people write/craft their conversations with - so I asked ChatGPT:

Input: Write a text message to someone named John to let them know that I am really interested in getting to know them more and maybe a casual date.

Example: Hey John! ? I've enjoyed our chats and would love to get to know you better. How about grabbing coffee or doing something casual together? Let me know! ?

More AI Dating
- YourMove.AI, an AI dating tool that offers a range of services such as drafting messages, analyzing conversations and evaluating users' dating app profiles
- Rizz, an AI dating assistant
- Amori uses AI to analyze a user's entire WhatsApp or iMessage chat history with any person in their contacts list, Weitzman said. The chatbot, which is built atop OpenAI's models, uses the chat logs to rank the relationship in areas like compatibility, communication, "sexiness" and more, even going so far as to guess each person's attachment style.
- The problem with these AI messages or conversations is: What happens when you actually meet?

Airlines - Late Friday Announcement
- Carl Ichan - won seats on Jetblue Board of directors
- 88 years old and still kicking it!
- TWO directors
- Icahn Enterprises bought 10% of company
- Icahn said in disclosing his JetBlue stake that he believes the shares are undervalued.
- Stock up 5% A/H Friday

- Bezos selling lots of stock lately
- Now that he moved to Florida - no state tax on the sales
- In 2022 Washington state imposed a new, 7% capital gains tax on sales of stocks or bonds of more than $250,000.
- In 2022, when the tax took effect, Bezos stopped selling. He didn't sell any Amazon shares in 2022 or 2023, gifting only $200 million of shares at the end of last year.
- On the $2 billion sale last week, he saved $140 million that he would have paid to Washington state. On the entire sale of 50 million shares over the next year, he will save at least $610 million. (Reuters)

More Amazon
- Amazon will replace Walgreens Boots Alliance in the Dow Jones Industrial Average, S&P Dow Jones Indices, which manages the 30-stock index, said on Tuesday. Amazon shares moved up 1% in extended trading.
- The move will result in more exposure for investors who bet on the index, which is far smaller than the S&P 500.
- The change goes into effect prior to market open on Feb. 26.
- "Reflecting the evolving nature of the American economy, this change will increase consumer retail exposure as well as other business areas in the DJIA," S&P Dow Jones Indices said in a statement.

- Attended premier of Disney's LOLA with Nelson Peltz
- Pelz is trying to get on board (activist)
- Musk makes flippant remark about potentially wanting to buy Disney

Putin on US Politics
- Russian President Vladimir Putin said in an interview broadcast on Wednesday that he preferred Joe Biden to Donald Trump but was willing to work with any U.S. president.
- Putin was asked by interviewer Pavel Zarubin who was "better for us" out of Biden, a Democrat, and Trump, a Republican.
- Putin replied without hesitation: "Biden. He is a more experienced, predictable person, a politician of the old school."

Lyft Earnings - OOOPS
- Stock finally make a move after an upbeat call - BUT
- Press release showed that margin expansion was expected to be 500 basis points (5%) in 2024.
----- Stock skyrocketed on the news 60%
- BUT - on the call, Lyft CFO Erin Brewer said the figure was incorrect and that the the actual increase will be 50 basis points
- Stock did move up during the day by 30% as earnings were better and outlook was better.
- Stock is still down 70% below its IPO Price.

AI Buying Stuff - Investing
- Nvidia Corp., the chipmaker at the heart of an artificial intelligence spending boom, disclosed investments in Arm Holdings Plc, SoundHound AI Inc. and the biotech company Recursion Pharmaceuticals Inc.
p- All companies went nuts after the news broke
- Generally all related to AI something
- However, Recursion Pharmaceuticals seems to be small investment part of a payment or investment from commentary.

Frostbite Cure?
- The U.S. Food and Drug Administration on Wednesday approved Eicos Sciences' injection, making it the first-ever treatment to treat severe frostbite in adults.
- The treatment, which will help reduce the risk of amputation, will be sold under the brand name Aurlumyn and is expected to be available in Spring 2024, although its pricing has not yet been determined, the company said in an e-mailed statement.
- Iloprost, the active ingredient in Aurlumyn, opens blood vessels and prevents clotting. It was originally approved in 2004 for the treatment of pulmonary arterial hypertension.

- Oil restocking is seen as keeping prices stable to up for the near term
- Traders say they have so far seen strong buying from China, Europe and the United States.
- The Chinese are buying heavily oil arriving this spring to replenish stocks while the United States is gradually topping up its Strategic Petroleum Reserve after selling a record amount from the government oil stores in 2022.

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