DHUnplugged #708: Let Them Eat Tech!

DHUnplugged Podcast

Let them eat tech!

Meme stock mania may be dying down

Short week – July 3rd 1/2 day, July 4 – closed – July 5?

How About those Florida Panthers?

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Warm Up
- Let them eat tech!
- Meme stock mania may be dying down
- Short week - July 3rd 1/2 day, July 4 - closed - July 5?
- How About those Florida Panthers?

Market Update
- Heavily weighted toward 10 stocks - breath sucks
- Seeing slowdown in consumer confidence and holding steady on most economic reports
- Some concerns mounting about Russia
- Stress Tests - Anyone Surprised?

Russia Issues
- NATO wants to put a senior civilian official in Kyiv, Ukraine
- Market was a little concerned about this - as new broke, selling occurred (for about 5 minutes)

HA! Play with Fire
- Keith Gill, the investor known as "Roaring Kitty" who helped spur the meme stock mania of 2021, was sued by GameStop investors who said they lost money through his "pump-and-dump" scheme for the videogame retailer.
- A proposed class action accusing Gill of securities fraud was filed on Friday in the Brooklyn, New York federal court.
- Investors led by Martin Radev, who lives in the Las Vegas area, said Gill manipulated GameStop securities between May 13 and June 13 by quietly accumulating large quantities of stock and call options, and then dumping some holdings after emerging from a three-year social media hiatus.

More Kitty Hoo-Haa
- Shares of Chewy popped in the premarket trading Monday after a Securities and Exchange Commission filing showed meme stock trader "Roaring Kitty" took a stake in the pet food e-commerce retailer.
- The filing showed Keith Gill bought just over 9 million shares — amounting to a 6.6% stake in the company. That makes him the third-biggest Chewy shareholder, according to FactSet. Based on Friday's close, that stake is valued at more than $245 million.
- Stock was initially p 16% in premarket (that is after some wild swings last week)
---- Close DOWN 6% on the day after that initial pop
- This guy is up Ryan Cohen's butt pretty far..

Chipotle Split Update
- Trading near a post-split low
- Stock initially moved higher toward $68 then reverses hard over the past few sessions, trading near $60
- This is important as investors may not just run into split announcements after this performance.
---- Or people are finally agreeing with JCD on the lack of taste?

Boeing
- Boeing said Monday that it will buy back its struggling fuselage maker Spirit AeroSystems in an all-stock deal that the plane maker has said will improve safety and quality control.
- It said it agreed to pay $37.25 a share in Boeing stock for Spirit, giving the aerospace company an equity value of $4.7 billion. Including Spirit’s debt the deal has a transaction value of $8.3 billion Boeing said. Spirit’s shares closed Friday at $32.87 a share, giving it a market capitalization of about $3.8 billion.
---- MORE: U.S. prosecutors plan to seek a guilty plea from Boeing over a charge tied to two fatal crashes of 737 Max planes, attorneys for the victims' family members said Sunday, blasting a potential agreement as a "sweetheart deal."
- The DOJ said in May that it was reviewing whether Boeing violated a 2021 settlement that protected Boeing from federal charges. The company agreed to pay a $2.5 billion penalty for a conspiracy charge tied to the 2018 and 2019 crashes of its best-selling 737 Max planes, which killed all 346 people on the two flights.

OIL!
- Breaking out
-- Concerns over supply issues due to Houthi rebels droning Suez Canal
--- Hurricane season hitting early - EARLIEST Cat4 on record happening now!
- Also some speculation that China is ramping up and needing more oil for summer etc.

Crude Chart

Inter-market Correlations - Busted
- Generally speaking higher USD and higher rates are not good for markets (pricing models etc)
- However, none of that matters for the major indices as they are fully in 10 stock mode
- Monday there was a 1% differential in S&P 500 and the S&P 500 equal weight

10-Yr Yield

It is like: Let them Eat Cake
- Let them eat tech?
----- Big divergence in names continues
------- Just throw your money into any tech at this point

Energy Scare (We called this a while ago)
- The largest utility companies in the U.S. are warning that the nation is facing a surge of electricity demand unlike anything seen in decades, and failure to rapidly increase power generation could jeopardize the nation's economy.
- After a more than decade-long period of largely flat growth, electricity demand is poised to skyrocket by 2030 as the artificial intelligence revolution, the expansion of chip manufacturing, and the electrification of the vehicle fleet all coincide as the U.S. is trying to address climate change.
- NEE, SO, CMS, EXC

More Money
- Amazon will double the value of credits it offers some startups to use its cloud infrastructure as the company faces heightened competition from Microsoft in artificial intelligence services.
- Starting July 1, startups that have raised a Series A round of funding in the past year will be eligible for $200,000 in credits through AWS' Activate program, up from $100,000 before
- In addition to its Activate offering, Amazon has a new 10-week generative AI accelerator program. Participants will be able to access up to $1 million in cloud credits
- Essentially they are hooking you, teaching you - rehooking you and making it easy for you to consumer their server power for $$$$

SHOES!
- Nike had a decent quarter but an awful terrible outlook
- Stock down 20% on earnings report
- It was the worst day ever for the stock, and the losses wiped out $28.41 billion from the company's market valuation.
- The company's U.S. market share in the sports footwear category fell to 34.97% in 2023 from 35.37% in 2022, and 35.40% in 2021, according to GlobalData.
- Meanwhile, other sporting goods brands such as Hoka, Asics, New Balance and On accounted for 35% of the global market share in 2023 compared to the 20% held over the 2013-2020 period, according to an RBC research report released in June.

Bank Stress tests
- Everyone passed (is that even something of a concern by anyone?)
- U.S. banking giants announced plans to raise their third-quarter dividends on Friday after proving that they have enough capital to withstand severe economic and market turmoil in the Federal Reserve's annual health check.
- JPM upping dividend and goosing its buyback by $30 billion
- BAC increasing its dividend
- Morgan Stanley boosted it dividend

Fuji Cameras HOT
- Remember the 1st digital SLR - Fuji S1, S2? (Just sold mine)
- Then it died off and Cannon and Sony, Nikon took over for years and Fuji appeared to be getting out of the business
- Now, the reto themed X100V has gotten popular with solcial media types (TikTok creators)
- The Fuji X100V model was so popular that in the fiscal year ended in March, it was the imaging division, which includes cameras, that was the biggest contributor to the company's record-high profit - the unit accounted for 37% of operating profit in fiscal 2023, versus 27% the year before.

YEN
- Supposedly the BOJ is on alert for the Yen passing 150 (1$ buys 150 Yen)
- It is not called the WIDOWMAKER trade for nothing
- Currently at 160 per USD
- Since 2012, the Yen has been cut in half

SO - Is Japan Cheap?
- Randomly looked up restaurant in Tokyo
- All you can drink at Gyoza Samari $20
- 2 Michelin Star Restaurant - 7 course dinner $80
- Fukushima/Hiroshima restaurants - All food pre-cooked and no need for lights as food has ambient glow - 4 course dinner plus unlimited Potassium iodide -- Priceless

More Japan
- American tourists headed for Japan have surged this year, lured by a slump in the value of the yen, which is also driving a massive jump in foreign investor interest in the country's lodgings market.
- The number of Americans arriving in Japan by air crossed more than 900,000 in the first five months of 2024, climbing 17.4% year-over-year and vaulting 35.5% from 2019 before the pandemic, the International Trade Administration data showed.

Japan Trends

San Fran - Tech Workers
- Laid-off tech workers advised to sell plasma, personal belongings to survive
----- Has to be extreme situation...
---- Tech workers - can they be retrained to be bricklayer? Is that a thing even?

Tesla
- Tesla just posted its second-quarter vehicle production and deliveries report for 2024, reporting that it produced 410,831 vehicles and delivered 443,956.
- The total number of deliveries in the second quarter fell 4.8% from 466,140 a year earlier but rose 14.8% from the first quarter.
- China made Tesla EV sales down 24% YoY
- Stock been hot - up 9% on this news today

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JCD Score ()

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