US National debt. A bit of maths...
The current level is almost $35 trillion. And the government has baked in minimum $2 trillion deficits going forward. There are $5 trillion in government revenues per year. 100% of government revenue is consumed by Social Security, Medicare, Medicaid and interest on the debt. Interest on the debt is WAY over $1 trillion per year, more than 20% of government revenue. It takes another $2 trillion minimum per year to fund defense and all of the other departments of the government that they are unwilling to cut. There are also extra items like Ukraine and whatever the wars going on that get additional off budget funding. It should thus keep rising. Source: Wall Street Silver, ABC News
Equal weight S&P 500 (ETF $RSP) is considerably cheaper than the market cap weighted ETF, just as we may see earnings growth broaden out to a wider swath of companies.
Does that spell opportunity? Source: Markets & Mayhem, GS
Interesting point of view by BofA:
"Fewer investors have focused on the inflationary effects of higher income. No other Fed hiking cycle in history occurred while government debt was so large ... interest payments flow to holders of Treasury securities and some portion will be spent." Source: BofA, Octavian Adrian Tanase
BREAKING: Nancy Pelosi has told US House Democrats that President Biden can be "persuaded fairly soon" to exit the 2024 presidential race.
New reports from Fox Business state that President Biden may drop out as soon as tomorrow. Source: Politico, The Kobeissi Letter
JUST IN 🚨: China dumped an ALL-TIME HIGH $42.6 billion worth of U.S. Securities in May
Source: Barchart
Meanwhile: The tech sector now represents 44% of the S&P 500 index when including Amazon, Alphabet, and Meta.
The pendulum has probably swung too far in one direction, and investors are running out of ideas to justify these historical distortions. Source: Tavi Costa, Bloomberg
BREAKING 🚨: Hedge Funds
Long/Short Hedge Funds suffered their worst day yesterday since the 4th quarter of 2022. Source: Barchart
Netflix, $NFLX, officially kicks off big tech earnings season with a MASSIVE swing in price.
The stock just swung over 10% in a matter of minutes after reporting results. The company reported Q2 2024 EPS of $4.88, above expectations of $4.76. They also added 8.05 million subscribers, crushing expectations of 4.5 million. Big tech earnings season has officially begun. Source: The Kobeissi Letter
