DHUnplugged #709: Blubber Gorging

Shark Week (Market Style) – Whale Gorging – Big Teeth – Big Appetites

Earnings season coming up

Biden staying in the race (for now)

Complacency nearing a tipping point.

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Warm Up
- Shark Week - Whale Gorging - Big Teeth - Big Appetites
- Earnings season coming up
- Biden staying in the race
- Market Moves - the inside track

Market Update
- Big Swings - Massive Rotation
- Employment Report for June
- Market Moves - the inside track
- Big Box - down to a few

Fed First
- Fed Chairman Jerome Powell Q&A with Senate Banking Committee: The "likely next direction" of policy will be a loosening of policy; rate hike not likely

Employment Reports
- Private payroll growth edged lower in June, according to a report Wednesday from ADP that indicates a potential slowdown in the U.S. labor market.
- Companies added 150,000 jobs for the month, below the upwardly revised 157,000 in May and the Dow Jones consensus estimate for 160,000. The total was the lowest monthly gain since January.
- BLS Official saw Unemp rate tick up to 4.1%
-Total nonfarm payroll employment increased by 206,000 in June
- Job gains occurred in government, health care, social assistance, and construction.

The Inside Track Lowdown
-- People asking  me "When will this end? It is crazy!"

- This week we will be treated to CPI and PPI.
- As it stands, Powell made comments after the close on July 3rd that they  were not satisfied with the rate of change related to inflation.  There is more work to be done he said. But, the markets don't really care about that - they see a cut in September and December.
- The general direction of the markets - or path of least resistance appears to be up.
- Investors are gorging themselves on AI related names.
- The big boys (and girls) of the market are taking in big money - helping to keep markets buoyed.
- - It has the look and feel of great white sharks in a ravenous feeding frenzy over a rotting whale corpse.
- Full Disclosure - we hold a good number of these names in our core equity allocation. Microsoft, Nvidia, SMCI, Google (Alphabet), Meta (Facebook) and several more.
- Monday moves - the DJIA was up big to start the day and at the lunchtime break was in the red. The money clearly flowed out of DJIA and into the NASDAQ100 again. So, this is how it will be for a while, or until something changes. And, that may very well be the next batch of earnings through the season that begins on this coming Friday with the major financial names.

- Ford truck sales, which includes pickups and vans, totaled 308,920 vehicles during the period, the company's best second-quarter performance for the category since 2019, Ford said. Sales in its F-Series totaled 199,463 vehicles.
- Sales of Ford electric vehicles totaled 23,957 during the second quarter, up 61%.
- The automaker said its EVs, in particular the Mustang Mach-E and F-150 Lightning, are drawing new customers to the company.
- Stock is stuck in a range

- Boeing has agreed to plead guilty to a criminal fraud conspiracy charge and pay a fine of $243.6 million to resolve a U.S. Justice Department investigation into two 737 MAX fatal crashes, the government said in a court filing on Sunday.
- The plea deal, which requires a judge's approval, would brand the planemaker a convicted felon in connection with crashes in Indonesia and Ethiopia over a five-month period in 2018 and 2019 that killed 346 people.
- Smart - quick slap on the wrist and get it over with (for publicity sake)
- As part of the deal, the planemaker agreed to spend at least $455 million over the next three years to boost safety and compliance programs. Boeing's board will have to meet with relatives of those killed in the MAX crashes, the filing said.
- The deal also imposes an independent monitor, who will have to publicly file annual progress reports, to oversee the firm's compliance. Boeing will be on probation during the monitor's three-year term.

- Tesla shareholders will appear in court on Monday to argue that an unprecedented request for more than $7 billion in attorneys' fees to be paid by the company is "outlandish," the latest twist in a legal showdown over Musk's $56 billion pay package.
- The record fee request was made by investor Richard Tornetta on behalf of three law firms that represented him, including Bernstein Litowitz Berger & Grossmann. Tornetta owned nine shares of Tesla when he sued over Musk's pay package of stock options in 2018, a legal battle he ultimately won in January when the package was voided.
- The fee equals around $7.2 billion at Tesla's Friday's stock price and amounts to a rate of roughly $370,000 for every hour worked by the 37 lawyers, associates and paralegals, some of whom normally bill as little as $275 an hour, according to court documents submitted Tornetta's lawyers.

More Musk
- Elon Musk wants to dismiss a lawsuit by former Twitter shareholders who said he waited too long in early 2022 to reveal his large ownership stake in the social media company, saying "all indications" show his delay was a mistake.
- In a late Wednesday night filing in Manhattan federal court, Musk called it implausible to believe he wanted to defraud shareholders who didn't know he had taken a 9.2% Twitter stake, and missed out on big gains because they sold their own stock.

Say What?
- Greece has controversially introduced a six-day working week for some businesses in a bid to boost productivity and employment in the southern European country.
- Under the new legislation, which was passed as part of a broader set of labor laws last year, employees of private businesses that provide round-the-clock services will reportedly have the option of working an additional two hours per day or an extra eight-hour shift.
- The change means a traditional 40-hour workweek could be extended to 48 hours per week for some businesses. Food service and tourism workers are not included in the six-day working week initiative.

Needless markup
- Saks Fifth Avenue parent HBC said on Thursday it will acquire Neiman Marcus Group in a $2.65 billion deal combining the storied retailers.
- The combination will establish Saks Global, which will include Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus' namesake department store chain and Bergdorf Goodman.

Europe - Coming after Tech
- Anti Trust for MSFT, META, ..... the whole list of big names
--- Tax on tech as they don't have any - need their fare share
-  NVDA is set to be charged by the French antitrust regulator for allegedly anti-competitive practices, people with direct knowledge of the matter said, making it the first enforcer to act against the computer chip maker.

- Stock split - everyone piled in - now they are running away
- Stock was as high as $69 post split (a few days ago)
- Now trading at $59.50

Is this something?
- Consumer credit increased by $11.3 bln in May (Briefing.com consensus $9.5 bln) after increasing an upwardly revised $6.5 bln (from $6.4 bln) in April.
- The key takeaway from the report is that revolving credit growth accelerated strongly after a slight contraction in May, so the question is whether consumers are turning to revolving credit because of need or increased optimism about economic prospects.
- Revolving credit increased by $7.0 bln to $1.345 trln.
- Nonrevolving credit increased by $4.4 bln to $3.720 trln.
- Consumer credit increased at a seasonally adjusted annual rate of 2.7% in May. Revolving credit increased at an annual rate of 6.3%.
- Nonrevolving credit increased at an annual rate of 1.4%.

San Fran Real Estate
- The vacancy rate for San Francisco office space reached a fresh record of 34.5% in the second quarter, according to a report on Monday from commercial real estate firm Cushman & Wakefield. That's up from 33.9% in the first quarter, 28.1% in the same period a year ago and 5% before the pandemic.
- AI boon not able to help so much
- Meanwhile, the average asking rent dropped to $68.27 per square foot in the quarter, the lowest since late 2015, down from $72.90 a year earlier and a peak of $84.70 in 2020.

- Starting July 14, a first-class mail "Forever" stamp will reportedly cost 73 cents each — a 5% jump from its current price of 68 cents.
- On January 22, 2023, the price of stamps was 63 cents each. That increased to 66 cents in July of the same year, and then 68 cents in January 2024.

Rebrand Car Rentals?
- Drive the BMW i4 with SIXT+ in a monthly cancelable subscription and feel what electric power is all about!
- The BMW i4 delivers a range estimate of 301 miles and is able to add 93 miles in just 10 minutes (utilizing a DC fast charger).
- $775 per month - SIXT Car Rentals


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