BUBBLES = Super-short-term gambling (zero days to expiration options)... is now running at 50% of the daily flow
Source: Keith McCullough, Bloomberg
Saudi Arabia has announced that it will stop pursuing the expansion of its oil production capacity, reversing a key goal in the oil's superpower strategy
Supporters of the energy transition are celebrating, but geopolitics may be more important than what meets the eye. In a nutshell, Saudi Arabia manages together with Russia a very complex political and economic arrangement within the OPEC+ alliance. Riyad and Moscow are coordinating with other producers around the world in order to revive the global oil market, prevent production surplus and keep oil prices higher than non-OPEC producers' policies would. Source: Francesco Sassi
Egypt: The currency is in free-fall
Black market rate: 1 dollar = 70 pounds Official rate: 1 dollar = 30.9 pounds The pounds has weakened by nearly 24% in the market in 2024. Egyptian billionaire Naguib Sawiris criticized delays in enacting a long-awaited devaluation of the pound, suggesting authorities match the spiraling black market rate to end the nation’s chronic foreign-currency shortage. Postponing reforms is “a disaster that will increase the extent of the critical situation we are in,” Sawiris said in an Arabic-language post on social media platform X. Egypt’s pound has plunged on the parallel market to 68-70 per dollar in recent days, leaving it more than 50% weaker than the official rate of about 30.9. Source: Bloomberg, Ziad M Daoud
BREAKING: UPS, $UPS, to cut 12,000 jobs after what its CEO called a "difficult and disappointing" year
The company has stated that they are looking to cut $1 billion of annual costs. UPS stock was down 6% after the announcement. Over the last 3 months, layoffs have quickly spread from technology companies to just about every industry. Shipping is now the latest industry to feel the pain. Note that UPS announcement takes place 6 months after the famous 170k salary package announcement by UPS who was at the time desperate to find new drivers. Time flies... Source: The New York Times, The Kobeissi Letter
As we are less than 24 hours away from the first Fed meeting of 2024, odds of rate cuts are pulling back
Odds of a rate cut this week are down to 2% and odds of a rate cut in March are down to ~40%. This is the lowest probability of a March rate cut since November 2023. Still, futures are pricing-in a base case of 6 rate cuts for a total of 150 bps in 2024. - All eyes will be on Fed guidance on June 30zh Source: The Kobeissi Letter
US government spending (inflation-adjusted) since 2020 has exceeded the combined spending of:
- World War I - World War II - 1970 to 1990 Is this sustainable?
The week is THE week of BIG TECH earnings and it is time for a reality check: NVDA is the only Magnificent 7 stock seeing an increase in earnings revisions.
The company is almost the sole beneficiary of the recent AI advancements, contrasting sharply with others that have only experienced hype without any fundamental improvement. Is the Mag7 acronym already blowing out? Source: Bloomberg, Tavi Costa
Microsoft $MSFT hitting all-time highs in extended hours trading after blowing out EPS and Revenue expectations
• Revenue +18% Y/Y to $62.0B ($0.9B beat). • Gross margin 68% (+2pp Y/Y) • Operating margin 44% (+5pp Y/Y). • EPS $2.93 ($0.16 beat). Source: App Economy Insights
