US Bolsters European Troop Count
165: Markets dump on PCE news, Ukraine Escalating
Hope everyone is having a good week. Today we’ll cover major updates for financial markets and global news ahead of the weekend with another post set to drop on Monday.
We wanted to run a poll on what we cover for Monday’s post. Let us know below:
Markets
Unfortunately markets have shed some of their gains we saw over the last several weeks with fears of longer duration rate hikes and the lack of progress made with unemployment (ironic given progress is MORE unemployment).
Thankfully we bought more Nvidia (NVDA) a few weeks ago along with Microsoft and Amazon after we determined they had fallen just a bit too steeply. Not enough to offset some of our other losses in the last several days but feels good to accumulate something that is showing relative strength.
Lots of institutional investors and economists are now focusing on the Bond Market for clues about what is going to happen next.
PCE came out today with Core PCE MoM: at 0.6% vs. an Est. 0.4%. It’s clear that traders and large institutions are weary to gobble up the bid with the prospect of a global war looming with every news update.
Remember PCE is the preferred inflation measure by the Fed despite the fact most retail traders and people never knew what this was prior to the retail trading bubble of the last several years. All you really need to understand from a sentiment standpoint is that this print keeps pressure on the Fed to raise interest rates higher which is causing folks to sell and have a negative outlook.
Sam Bankman Fried was charged with conspiracy to make unlawful political donations and defraud the Federal Election Commission this week - SBF indictment says he made over 300 illegal political donations worth more than $10 million.
Billionaire Thomas H. Lee was found dead in his New York Office of an apparent suicide
Coinbase has announces base, an Ethereum L2 Network Powered by Optimism
Rolls-Royce posted a profit of about $786 million, way above analyst projections of around $576 million (Reuters)
Lucid Group stock dumped over 12% on Thursday, on track to mark its biggest drop in more than a year
Markets are dumping off this hot print Domino’s (DPZ) Pizza closed down over 12% yesterday, the largest daily drop since 2010
According to a recent data from Edmunds.Com 16% of Americans have a 4 digit car bill (at least $1,000). This is sheer insanity. Yahoo Finance elaborates that the percentage of borrowers at least 60 days late on their car payments is higher today than it was during the peak of the Great Recession in 2009. According to the Wall Street Journal auto loans that are delinquent are higher than pre-pandemic levels.
U.S. consumer spending increased by the most in nearly two years in January 2023 amid a surge in wage gains and relatively low unemployment. Seems people are spending without a care, likely adding to the insurmountable amount of credit card debt in the country. The chickens will come home to roost on this front, it will just take some time to play out
Speaking of relative strength crypto bros are probably feeling pretty good with the recent resiliency and slight decoupling of BTC from equities and other markets.
Bitcoin has surged over 50% in 2023 and Ethereum isn’t far behind having pumped over 37.91%.
Crypto bears were counting on more aggressive fed policy and options expirations to drive the price of Bitcoin and other major cryptos lower but so far there has been some seriously impressive strength despite worsening macro conditions and a bleak outlook for the next several months.
Our long term favorite oracle pick Chainlink has been trending on Twitter virtually all week and there have been some promising developments in the space including the fact it has has gone live on more than 10 social media platforms — fueling sentiment and expanding awareness of the oracle protocol to new users and investors in the space.
Altcoin Sherpa, a large and influential crypto twitter account laid out his views on Chainlink and other major alts to his close to 200,000 followers this week. It’s worth noting overall he is in fact bearish.
He says Chainlink did not perform as strongly as other altcoins during the rally to start the year, but they also say that means LINK is likely to hold up better if the markets start to decline.
“LINK: Coins like this underperformed many other alts BUT it’s typically going to be safer than those same altcoins in shaky market conditions. So rn it’s actually a pretty decent coin to have if you want long exposure (relative to some alts that already pumped).”
We remain bullish on crypto in 2023 even if short term we see more volatility and moves down to retest local lows. Remember - many holders of Bitcoin specifically are long term holders with no motivation to sell, and it’s not like they didn’t have months to sell into healthy profit.
Over 67% has not moved in over one year, almost 50% has not moved in over two years when so far this year most of that cohort could have sold at a profit. Even being conservative and removing all coins dormant for more than 10 years because they could be considered “lost,” over half of outstanding BTC has been stationary for over a year (Coindesk).
At the moment Bitcoin seems to be shirking the dumping that is plaguing equities this morning (as of 10:00 am ET).
Right now with traditional and equity markets we are sitting on our hands besides adding oversold tech and dividend names.
Global News
While it’s dominated headlines for nearly a year now the War in Ukraine may be entering it’s most volatile period as different countries make strategic moves to anticipate what comes next from Russia.
US Defense Secretary Lloyd Austin announced on Friday morning that the U.S. will deploy 20 thousand additional troops to NATO’s eastern flank. The US isn’t the only country boosting it’s presence near Ukraine.
Belarusian units armed with Iskander-M missile systems moved into position near the Ukrainian border this week (@WhereisRussia). Putin’s ally Dmitry Medvedev said this week that Russia will win in Ukraine, is ready to go 'up to Polish borders'
If you haven’t — make sure to check out our post from last week Are You Prepared for The Worst? In it, we run through a variety of domestic and foreign situations that could play out and how you should be prepared for them. We suspect that the US won’t be indirectly involved in this conflict for much longer. Also worth peeping our How to Trade World War III post.
The UN General Assembly has again demanded Russia withdraw troops from Ukraine, calling for a "comprehensive and lasting" peace in the country and region
Polish Prime Minster Mateusz Morawiecki arrived in Kyiv today
Russia will be joining China & South Africa for naval drills in Indian Ocean
A snowstorm has disrupted internet connectivity in Michigan, knocking out power and telecommunications lines and disconnecting hundreds of thousands of subscribers according to NetBlocks
The U.S. has announced plans to deploy an additional 100 and 200 troops to Taiwan in the next several months - up from roughly 30 there a year ago. The planned increase would be the largest deployment of forces in decades by the U.S. on Taiwan, according to US officials (WSJ)
France has confirmed that AMX-10RC armored vehicles will arrive in Ukraine this week
China's gold imports in 2022 hit the highest level since 2018
North Korea has warned yet again that ‘if the U.S. continues its hostile and provocative actions against North Korea despite our repeated protests and warnings, it will and can be regarded as a declaration of war"
Russian Foreign Minister, Sergey Lavrov has recently stated that ‘over a dozen’ countries have formally applied to join the BRICS grouping following the decision to allow new member applications earlier in 2023
The Biden administration is expected to announce another $2 billion in Ukraine Security Assistance Initiative tomorrow, US official says - CNN/Faytuks News
Europe seems to be anticipating a larger conflict based on the actions of several high profile countries and leaders amid a potential Russia Spring Offensive.
Poland's minister of national defence announced: We have started a preventive expansion of security measures on the border with Russia & Belarus. This is part of our defense and deterrence strategy. The first fortifications are already being placed on the border with Kaliningrad.
According to Reuters the Polish Prime Minister has announced Poland will deliver 60 PT-91 tanks to Ukraine in the coming days.
Moldova has also proven to be a central piece in the tensions growing in Europe - Russia's foreign ministry said recently that any actions threatening Russian peacekeepers in Moldova's breakaway region of Transnistria will be seen as an attack on Russia according to the Russian news agency TASS.
So we will be monitoring the appropriate channels to see if anything goes on in this country as chances are high it could lead to another major conflict that could drag in other nations.
In recent weeks China has announced plans to support Russia in the War in Ukraine which is a large development considering so far their participation and side picking has been limited.
China's Foreign Ministry Wang Wenbi, called the US the largest instigator of conflicts and stressed that after the end of World War II, Washington has initiated about 80% of armed conflicts along with trying to overthrow more than 50 foreign governments including Iraq, Afghanistan, and others.
Top Chinese diplomat Wang Yi met Wednesday with Putin and Russia’s foreign minister, Sergei Lavrov, in Moscow. A readout following the meeting published by Chinese state news agency Xinhua quoted Wang saying China was willing to “deepen political trust” and “strengthen strategic coordination” with Russia (Insider Paper).
Within the last 48 hours President Xi has also called for peace and the avoidance of a nuclear exchange contributing to mixed signals from the superpower. We remain skeptical.
Hopefully people can recognize the severity of how this conflict is escalating. We’ve been blaring the trumpets for some time on how risky and dangerous this conflict is becoming, despite it being just a central proxy war for the world’s superpowers.
What’s important to recognize here from a geopolitical standpoint is that the US has clearly lost some of it’s gusto and presence as the global hegemon — large nuclear and economic power house countries are actively challenging us for the leading nation spot globally.
One year ago today, Russia launched an unprovoked and indefensible invasion of its peaceful and democratic neighbor Ukraine—a cruel war of choice that has killed thousands of innocent Ukrainians, forced millions more from their homes, left countless Ukrainians wounded or traumatized, and inflicted tragedy and terror on a sovereign U.N. member state.
Today's solemn anniversary is an opportunity for all who believe in freedom, rules, and sovereignty to recommit ourselves to supporting Ukraine's brave defenders for the long haul—and to recall that the stakes of Russia's war stretch far beyond Ukraine.
— US Defense Secretary Lloyd Austin in a WH statement
Ukraine has surprised the world. Ukraine has inspired the world. Ukraine has united the world. There are thousands of words to prove it, but a few will be enough: HIMARS, Patriot, Abrams, IRIS-T, Challenger, NASAMS, Leopard
—Zelensky
Back home the US continues to deal with a wide range of ecological disasters, factory explosions, and unexplainable crises, including the chemical spill and subsequent toxic fire in East Palestine Ohio.
Secretary of Transportation Pete Buttigieg showed up to East Palestine on the heels of Donald Trump to a whirlwind of reporters and news teams all asking him hard questions like why he didn’t show up earlier.
The narrative from him and his team is mostly that Trump is to blame for deregulation. And it’s not only Pete, the White House has blamed Republican lawmakers and the Trump administration for lax railway and environmental regulations in the aftermath of the derailment (The Hill).
As we mentioned there have been some unexplainable and completely bizzare other disasters in the US in the last several weeks including when five people who worked for an environmental response consulting firm were killed in a plane crash Wednesday in Little Rock, Arkansas, while on their way to a metal factory explosion site in Ohio.
The plane was carrying some employees of the Center for Toxicology and Environmental Health and initially it took off from Bill and Hillary Clinton National Airport in Little Rock around noon Wednesday(CNN).
Beyond that there was a massive explosion at an Ohio metals plant.
The deadly explosion at the metal manufacturing plant killed one and left 12 others injured.
Question is, is something actually going on? Or is the media hyper focused on these instances. We don’t know the answer but our gut feeling is its a mix of the two.
Just a quick and short review today folks — I will see you Monday for out next deep dive. Make sure to vote up top so we can put out some fire guides for all.
Couple major announcements next week as well.
Have a great weekend and stay hard.
Disclaimer - I am a 30 year online business owner, former trader and salesmen, and financial meme account brand. None of this should be considered formal financial or life advice — all views are my own opinion. You should thoroughly research financial decisions you make and know the risks involved.
We strive to synthesize and distill the best information on various topics out there combined with our no nonsense commentary on markets, politics, and life.
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Boss, where did the deal sled review go? Can’t find it.