Burry In Q1: "Sell", Also Burry In Q1:
Institutional investors have been dumping stocks for the last 12 months. You have to ask yourself some serious questions when you see this.
Market
Prices as of 4 pm EST, 5/15/23
Macro
According to CME Group’s FedWatch Tool, markets give virtually zero (0.4%) chance that interest will remain at their current level of 5-5.25bps by the end of the year.
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Yesterday, however, Fed officials pushed back on those odds.
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Atlanta President Raphael Bostic said he doesn’t predict any rate cuts until “well into 2024”.
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Minneapolis Fed President Neel Kashkari (who is a voting member this year), meanwhile, said the Fed still has “more work to do…to bring down inflation”.
Total consumer debt has hit a new record at over $17 trillion.
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The fresh highs come despite the lowest level of mortgage originations since 2014.
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For the first time in 20 years, consumers failed to pay down their credit card balances in Q1.
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This suggests households are struggling under the pressure of higher prices.
Manufacturing activity in New York collapsed to its lowest level in 4 months, falling to -31.8 in May.
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Excluding the pandemic, the 42.6 drop was the largest ever.
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Relative to expectations, it was the 3rd largest drop on record.
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The biggest drops were seen in new orders (-53.1), shipments (-40.3), and inventories (-20.5).
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Was April’s 10.8 reading a headfake?
Zero Hedge
Stocks
Mark Kolanovic has reiterated his underweight call for US and EU equities.
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As the X-date approaches, the top JPMorgan strategist points to the debt ceiling impasse as a catalyst for stock market volatility ahead.
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He cites 2011’s debt event as a roadmap for investors if the “issue goes down to the wire”, as it appears likely to do so.
Activist investor Nelson Peltz has upped his stake in Walt Disney.
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After cutting its position by 34% by the end of March, his firm (Trian Partners) has purchased another 500k shares, bringing its total share count to 6.4 million.
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Peltz had backed off his push for a board seat in February after the company announced a $5.5 billion cost-cutting plan.
Here’s what a couple of Wall Street’s biggest names were buying/selling in Q1:
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Warren Buffett:
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Michael Burry:
Energy
The US is planning to buy up to 3 million barrels of sour crude oil in August to restock its Strategic Petroleum Reserve (SPR).
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The government drained the SPR by 2.9 million barrels last week.
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At ~372 million barrels, reserves are currently at the lowest level since 1983.
Earnings
Yesterday’s highlights:
Nu Holdings (NYSE: NU): $0.04 EPS (vs. $0.03 expected), $1.62 billion in sales (vs. $1.39B expected).
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Net income reached $142 million on revenue which nearly doubled YoY.
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The company added 4.5 million customers in Q1, bringing its global total to 79.1 million.
Monday.com (NASDAQ: MNDY): $0.14 EPS (vs. -$0.28 expected), $162.3 million in sales (vs. $155.3M expected).
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The company revealed plans to open its platform to third-party developers to build AI apps.
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It also posted stronger-than-expected billings and raised its full-year revenue outlook.
What we’re watching today:
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Home Depot (NYSE: HD)
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Sea Limited (NYSE: SE)
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Baidu (NASDAQ: BIDU)
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Vodafone (NASDAQ: VOD)
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Keysight Technologies (NYSE: KEYS)
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Tencent Music (NYSE: TME)
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On Holding (NYSE: ONON)
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Doximity (NYSE: DOCS)
Top Headlines
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Icahn probe: Federal prosecutors in New York are investigating allegations made by Hindenburg Research against Icahn Enterprises.
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El Niño: The periodic weather phenomenon has the potential to disrupt global commodity markets.
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Russian oil: Exports of Russian oil hit their highest level since the invasion of Ukraine in April.
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Survey says: BofA’s latest global fund managers’ survey revealed investors are the most pessimistic they’ve been all year.
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Fed is done: Billionaire Paul Tudor Jones thinks the Fed is done raising rates and predicts stocks end the year higher from here.
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Settlement: Wells Fargo will pay $1 billion to settle a lawsuit accusing it of making misleading compliance statements.
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Super-app moves: Elon Musk’s Twitter made its first acquisition in job-matching tech startup Laskie.
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Musk subpoena: Elon Musk has been subpoenaed in a lawsuit against JPMorgan over its relationship with Jeffrey Epstein.
Crypto
Prices as of 4 pm EST, 5/15/23
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Secret deal: The SEC says Jump Trading engaged in a secret deal to prop up stablecoin TerraUSD.
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Feet dragging: The SEC has rejected Coinbase’s request for regulatory clarity saying it has no requirement to do so.
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Asset flows: Digital investment products saw their 4th straight week of outflows totaling $54 million.
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Correlation: The correlation between Bitcoin (CRYPTO: BTC) and Ether (CRYPTO: ETH) has dropped to its weakest since 2021.
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Active users: Despite rising transactions, the number of active addresses on the Bitcoin network is falling.
Deals
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Approved: Despite UK and US opposition, the EU has approved Microsoft’s $69 billion takeover of Activision Blizzard.
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Blocked: The FTC plans to block Amgen’s $27.8 billion acquisition of Horizon Therapeutics.
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Burger battle: Activist investor Engaged Capital is preparing to launch a proxy fight for 3 board seats at Shake Shack.
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Credit investing: Private equity group TPG will buy debt and real estate manager Angelo Gordon for $2.7 billion.
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VW sale: Russia’s government has approved the sale of Volkswagen’s Russian assets to auto dealer Avilon for ~$140 million.
Meme Of The Day
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