Before the Open (Jul 1-5)

Good morning. Happy Friday.

The Asian/Pacific markets leaned were split. South Korea, Indonesia and Thailand did well; Hong Kong and Singapore were weak. Europe, Africa and the Middle East are currently mostly up but little changed. Germany, Denmark and the Netherlands are leading. Futures in the States point towards a positive open for the cash market.

————— VIDEO: State of the Market —————

The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are up.

Stories/News from Seeking Alpha…

The ballot box

14 years of Conservative rule have ended in the U.K. after the Labour Party won the U.K. general election by a landslide, with Keir Starmer becoming the new prime minister. He’s been given a major mandate with 411 seats out of 650 in parliament, picking up 211 seats in the latest vote, according to the last exit polls. It’s a big shift for Britain’s political landscape, which has dealt with a tumultuous decade that has included Brexit, a cost-of-living crisis following COVID and the war in Ukraine, as well as four Tory prime ministers over the past five years.

Major turnaround: Labour suffered its worst election result in nearly a century in 2019, but it has since made inroads with the general public dealing with a sluggish economy and strained public services. The loss also reflects diminishing confidence in the Conservative Party, which has seen its fair share of troubles ranging from the failed mini-budget of Liz Truss to scandals under Boris Johnson. In fact, disenchanted Tory members helped boost Nigel Farage’s Reform UK, which became the fourth-largest party in parliament and intends to build a mass national movement before the next general election in 2029.

“The British people have delivered a sobering verdict tonight. There is much to learn and reflect on, and I take responsibility for the loss,” outgoing Prime Minister Rishi Sunak declared before stepping down as Conservative Party leader. “Change begins now,” responded Labour’s Keir Starmer, who was handed the keys to 10 Downing Street. “We said we would end the chaos… and today, we start the next chapter.” The FTSE 100 (UKX) edged higher following the long-predicted results and note that there is another big European election taking place in France this weekend.

On the agenda: With net debt nearly equivalent to annual economic output, the U.K. Labour Party has pledged to plug a shortfall in public spending, but will need to find new funds to turbocharge the economy and the National Healthcare Service. It has also outlined supply-side reforms like making infrastructure easier and cheaper to build, as well as investing in green energy and a New Deal for Working People. In terms of trade, Starmer has ruled out rejoining the EU single market or customs union, though he will seek ways to remove some of the trade barriers with bloc. (20 comments)

Bitcoin pileup

Crypto-related stocks are under pressure in premarket trading after Bitcoin (BTC-USD) extended its losses for the fourth consecutive session. The largest cryptocurrency has fallen from the $63,000 level to around $54,000 in recent days, with collapsed exchange Mt. Gox set to distribute a large amount of BTC to its creditors. A heist in 2011 nabbed up to 950K Bitcoins, but repayments will be made this week to many creditors, prompting dilution fears or many to cash out on their recovered investments. The German government also just sold thousands of bitcoins, which were said to have been seized in connection to defunct piracy website Movie2k. (79 comments)

Meet Saks Global

Stronger together might be the name of the game in the luxury business as brick-and-mortar outlets continue to get hammered by e-commerce trends and inflation takes a toll on aspirational buyers. Hudson’s Bay Co. has confirmed the $2.65B purchase of Neiman Marcus Group, creating a powerhouse with $10B in annual sales and over 150 store locations, including Saks Fifth Avenue, Saks OFF 5th, Neiman Marcus and Bergdorf Goodman. As mentioned previously, Amazon (AMZN) will take a minority stake in the combined company, which will be called Saks Global. Salesforce (CRM) is another minority investor and is expected to help with artificial intelligence.

Current conditions

Today’s closely-watched jobs report, which will be published at 8:30 AM ET, is likely to be a mixed bag, with growth expected to continue but at a slower pace than in prior months. Economists estimate 191K non-farm payrolls were added in June, while the unemployment rate held steady at 4%. With inflation being the Federal Reserve’s main focus, average hourly earnings data will also be important in the upcoming report. That’s expected to rise 0.3% M/M and 3.9% on a Y/Y basis, vs. 0.4% M/M and 4.1% Y/Y in May, with the labor force participation rate increasing slightly to 62.6%.

Today’s Economic Calendar
05:40 AM Fed’s Williams Speech
08:30 AM Employment Situation
01:00 PM Baker-Hughes Rig Count
04:30 PM Fed Balance Sheet

What else is happening…

Founder Jeff Bezos unloads nearly $5B in Amazon (AMZN) shares.

Beryl strengthens back into Category 3 Hurricane as it nears Mexico.

JPMorgan’s Kolanovic said to leave bank after string of bad calls.

Fed minutes: More favorable data needed for inflation confidence.

Trump Media (DJT) buying assets to power TV streaming service.

Honda (HMC)-Nissan (OTCPK:NSANF) collaboration on software and EVs?

Blocked! Volkswagen’s (OTCPK:VWAGY) gas turbine business to China.

GM (GM) agrees to carbon credit retirement to settle emission violations.

Teck Resources (TECK) gets the green light to offload coal assets.

Lots of change taking shape in Amazon’s (AMZN) robot business.


Good morning. Happy Wednesday.

The Asian/Pacific markets did great. Japan, Hong Kong, South Korea, India, Taiwan, Malaysia, Indonesia, Singapore and the Philippines all posted solid gains. China was weak. Europe, Africa and the Middle East are currently mostly up. France, Turkey, Germany, Greece, South Africa, Spain, the Netherlands, Italy, Sweden and the Czech Republic are doing well; Denmark is down. Futures in the States point towards a down open for the cash market.

————— VIDEO: State of the Market —————

The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are up.

Stories/News from Seeking Alpha…

Sooner than later

Debt levels are a big worry, with both presidential candidates adding trillions to the national deficit during their first terms in office. It’s a problem because measures like tax increases and spending cuts are not popular with contenders who only consider four years at a time, while it can take a while to feel the higher costs related to debt servicing. In fact, the U.S. is set to spend $892B on interest payments in the current fiscal year, more than the figure earmarked for defense spending, and that number is set to top $1T in 2025, which is close to the total budget for Medicare.

Quote: “Fiscal policy is a job for elected people. We’re not elected people, so we don’t comment on it – particularly in advance of a presidential election,” Powell said at an ECB conference in Portugal. “I will say more broadly, though, the United States is running a very large deficit at a time when we’re at full employment. The level of debt that we have is not unsustainable, [but] the path that we’re on is unsustainable – that’s completely not controversial. This is something that should be a top-level issue. You can’t run these kinds of deficits [even] in good economic times for very long. In the longer run, we’re going to have to do something sooner or later, and sooner will be better than later.”

Higher deficits can also make inflation a bigger problem for the central bank – which uses monetary policy to keep prices stable – but has little say over what happens on the fiscal side, where outsized spending has been the norm across both parties. Credit rating agencies are taking notice, with Moody’s cutting its credit outlook on the U.S. in November, citing heavier downside risks to the country’s fiscal strength. Fitch also lowered America’s credit rating following last summer’s debt ceiling drama, while S&P was the first to downgrade U.S. government debt in 2011.

Going global: Government bond yields are used to price many other types of debt and can hurt economic growth if levels continue to stay elevated. Kicking the can down the road during good times has the potential for devastating impacts if a crisis hits, and many other developed nations across the globe (like Japan, France, Canada and the U.K.) are also experiencing troubles managing their debt-to-GDP ratios. “Markets could at some point question fiscal sustainability,” said Claudio Borio, head of the economic department at the Bank for International Settlements. “We know from experience that things look sustainable until, suddenly, they no longer do.”


Legendary gastronomic gladiator Joey Chestnut won’t be choking down soggy hotdogs at this year’s Nathan’s Famous Hot Dog Eating Contest on July 4. According to ESPN, the 16-time champion agreed to a sponsorship deal with Impossible Foods (IMPF) which makes plant-based alternatives to meat and fish, including plant-based hot dogs, thereby making him ineligible to compete. Nathan’s hot dogs are manufactured by Smithfield, a subsidiary of Chinese meat and food processing company WH Group (OTCPK:WHGLY), but the site of the Nathan’s Famous Hot Dog Eating Contest is still privately owned by the family of founder Nathan Handwerker. (2 comments)

New treatment

The FDA has approved Eli Lilly’s (NYSE:LLY) Kisunla (donanemab) as a treatment for early Alzheimer’s disease. The therapy, which is given via infusion once a month, will cost $12,522 for six months or $32,000 for a broader treatment over a year. Kisunla will compete against Biogen (BIIB) and Eisai’s (OTCPK:ESAIY) Leqembi (lecanemab), which has been available in the U.S. since last year. Shares of Eli Lilly didn’t get any boost from the latest news, with President Biden and Sen. Bernie Sanders urging the pharma giant to substantially reduce prices and stop “ripping off the American people.” (12 comments)

Power of sleep

The Federal Trade Commission is suing to block Tempur Sealy’s (NYSE:TPX) planned $4B purchase of retailer Mattress Firm. As the world’s largest mattress supplier and manufacturer, Tempur Sealy will have the ability and incentive to “suppress competition” and raise prices for mattresses for millions of consumers, according to the FTC. The company responded that “the perspective does not reflect all the relevant facts and law,” highlighting that the bedding industry is highly competitive. Other M&A deals are going under the microscope in the wake of the ruling, such as Walmart’s (WMT) agreement to acquire TV maker Vizio (VZIO). (2 comments)

Today’s Economic Calendar
07:00 AM Fed’s Williams Speech
07:00 AM MBA Mortgage Applications
07:30 AM Challenger Job-Cut Report
08:15 AM ADP Jobs Report
08:30 AM International Trade in Goods and Services
08:30 AM Initial Jobless Claims
09:45 AM PMI Composite Final
10:00 AM Factory Orders
10:00 AM ISM Service Index
10:30 AM EIA Petroleum Status Report
12:00 PM EIA Natural Gas Report
NYSE Early Close at 1:00 PM
02:00 PM FOMC Minutes
SIFMA Early Close at 2:00 PM

What else is happening…

Tesla (TSLA) strength sees Nasdaq close above 18,000.

Year of the election: U.K. voters get ready to cast ballots.

New proposed rules to protect workers from extreme heat.

Moderna (MRNA) inks contract to develop mRNA bird flu vaccine.

When is it final? More rumors surrounding Paramount (PARA) deal.

Fed’s Goolsbee says policymakers should prepare for rate cuts.

Apple (AAPL) executive receives observer role on OpenAI board.

Walmart (WMT) exploring possible sale of healthcare centers.

Potential stock winners if Trump wins White House in GOP sweep.

Odds of Harris getting Democratic nomination now even with Biden.


Good morning. Happy Tuesday.

The Asian/Pacific markets leaned down. Japan, Hong Kong and Singapore did well, but China, South Korea, Taiwan, Thailand and the Philippines were weak. Europe, Africa and the Middle East are currently mostly down. Denmark, Poland, France, Germany, Greece, South Africa, Finland, Switzerland, Spain, Italy and Sweden are posting the biggest losses. Futures in the States point towards a moderate down open for the cash market.

————— VIDEO: State of the Market —————

The dollar is unchanged. Oil and copper are up. Gold is down; silver is up. Bonds are up.

Stories/News from Seeking Alpha…

Some apparently didn’t get the memo, or research the classic case studies on competitive advantage. Chicken Soup for the Soul Entertainment (CSSE), the parent company of Redbox, has filed for bankruptcy, with a bill of nearly $1B owed to hundreds of creditors, including Sony, Warner Bros, Walgreens and Walmart. Besides a network of 24,000 DVD rental kiosks, CSSE had some TV and streaming assets that never took off, including ad-supported video-on-demand services like Crackle and Popcornflix.

Sound familiar? Blockbuster went bust back in 2010 after failing to adjust to structural changes within the movie industry. Management did not take the threat of subscription video-by-mail services from Netflix (NFLX) seriously, as well as the advent of video-on-demand, which would eventually trigger the streaming wars later that decade. Several high-profile businesses like Disney+ (DIS), Prime Video (AMZN), and Max (T) have been jockeying for market share in recent years, but one thing is clear – the era of the optical disc is long gone and it is not coming back anytime soon (with the exception of Blu-ray, 4K, or nostalgic fans).

Bearing that in mind, Chicken Soup for the Soul Entertainment, which has never turned a profit as a publicly traded company, scooped up Redbox in 2022, taking on an additional $325M in debt in the process. The acquisition was led by CEO and Chair Bill Rouhana, who previously founded and led Winstar Communications (which ended up being one of the notable telecom bankruptcies of the dot-com era). Many analysts on Seeking Alpha have been issuing warnings about Chicken Soup (CSSE) for years, like Hindenburg Research back in 2018, and Arie Investment, Bill Maurer and Chris DeMuth in 2022. CSSE shares fell 40% to $0.12 following the latest news on Monday after plunging 83% over the past year.

No rewinding: Redbox Entertainment was a product of the SPAC boom, which was taken public by Apollo Global Management (APO) in 2021 via a merger with Seaport Global Acquisition. Within a year, the company was offloaded to Chicken Soup for the Soul Entertainment just as the SPAC bubble burst. “We were bringing assets that were helpful in terms of the debt, cleaning up the capital structure and access to new cash, and they were bringing these incredible assets, this bigger revenue business and the ability to generate a lot of cash flow,” Bill Rouhana, who has now been replaced, said at the time. “I’m happy that we broke through and got it right.” (4 comments)

Are you my partner?

Speaking of the streaming wars, Paramount Global (PARA) is reportedly in discussions to combine its money-losing offering Paramount+ with services from Warner Bros. Discovery and/or Comcast. A combination would give Paramount+ a firmer base with which to compete with the bigger players, stabilize churn, and also take some streaming losses off the larger company balance sheet. Paramount rose 3% AH on Monday following a separate report that media mogul Barry Diller and his company IAC (IAC) are exploring a bid to take control of the entertainment giant. (90 comments)

EV race

Driven by price cuts across most models, BYD (OTCPK:BYDDF) set a new sales record in the second quarter and is inching closer towards overtaking Tesla (TSLA) once again as the world’s top seller of electric vehicles. The Chinese carmaker sold 426,039 pure EVs in Q2, close on the heels of Tesla, which likely sold around 440,000 units, according to analyst forecasts. Tesla is due to report its Q2 sales later today, but many have been reeling in estimates due to concerns over demand, as well as registration data from Europe and China. BYD last crossed Tesla to be the biggest seller of EVs in Q4 2023. (10 comments)

Survey says

Surprise, surprise. The AI rally looks like it is here to stay, based on the latest Wall Street Breakfast poll. Nvidia (NVDA) was the clear winner when asked what would be the best-performing S&P 500 stock in the second half of 2024, garnering 31% of the more than 500 responses to the survey. Other Big AI names also scored silver and bronze, with Microsoft (MSFT) and Apple (AAPL) receiving 8% and 6% of the total vote, respectively. Discover more SA articles that discuss recent surveys and sentiment rankings on market-related topics, as well as those connected to asset allocation and the economy.

Today’s Economic Calendar
Motor Vehicle Sales
09:30 AM Jerome Powell Speech
10:00 AM Job Openings and Labor Turnover Survey

What else is happening…

Stocks to watch as Cat 5 Hurricane Beryl heads towards Jamaica.

Meming around: Roaring Kitty is sued for pump-and-dump scheme.

U.S. restaurant stocks begin the third quarter with another drop.

Nvidia (NVDA) likely to face charges by French antitrust authorities.

Salesforce (CRM) shareholders reject pay package for CEO Benioff.

Judge halts Biden administration’s pause on LNG export licenses.

RBA minutes: Ready to raise rates if inflation expectations change.

ISM Manufacturing PMI slips further into contraction terrain in June.

Maui wildfires: Hawaiian Electric (HE) drops as ATF report is completed.

Morgan Stanley lists pockets of safety as S&P 500 sees ‘technical fragility.’


Good morning. Happy Monday. Hope you had a good weekend.

The Asian/Pacific markets did well. Japan, China, India, New Zealand and Indonesia led. Europe, Africa and the Middle East are currently mostly up. France, Germany, Greece, Finland, Spain, Italy, Portugal, Austria and the Czech Republic are leading while Turkey is down. Futures in the States point towards a positive open for the cash market.

————— Blog: The Conditions are Not Present to Repeat 2000-2003 —————

The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are down.

Stories/News from Seeking Alpha…

De La France

International headlines are coming out of France this morning after Marine Le Pen and Jordan Bardella’s National Rally scored a victory in the first round of legislative elections. The party and its allies were projected to have won 33% of the vote, compared to the 29% of the New Popular Front coalition and a distant third-place finish for President Macron’s Renaissance party at 22%. Macron previously called the snap elections after getting trounced in EU parliamentary elections a month ago, but the gamble on a moment of “clarification” seems to have backfired.

Market moves: French stocks soared at the open, with the blue-chip CAC 40 Index advancing nearly 3% in early trade. Some analysts attributed the move to the likelihood of a hung parliament, and a sense of gridlock certainty that will be enjoyed by the market, while others highlighted the potential for growth under National Rally, which has pitched lowering income tax and VAT on energy and fuel. The euro also climbed 0.5% against the dollar to $1.077, while the yield on the French 10-year government bond rose 4 basis points to 3.33%.

A second round of voting will take place on July 7 and will determine whether National Rally will get an absolute majority. Much political jockeying will take place before then and will likely include the withdrawal of many third-placed candidates, who won at least 12.5% of total registered voters. Macron’s base will specifically look to prevent a power-sharing arrangement with the National Rally, which has been repositioned and rebranded under Marine Le Pen and severed its controversial ties to her divisive father (who founded the party in 1972).

Thought bubble: While many media outlets currently use adjectives like the far-right, many French voters believe the opposite – mirroring a stance seen across Europe and even the U.S. They feel that the values now embraced by the so-called centrist parties embody the extremes previously seen on the periphery of the political spectrum, such as open immigration and asylum (European migrant crisis), top-heavy mandates and regulation (COVID pandemic), and military interventionism (sending troops to Ukraine). These voters are also discontent with personalities that seem to leave certain demographics behind (farmer protests) and politicians that are disconnected from the realities of the common man or woman (Yellow Vest protests). The outlook can become even more emboldened when unbridled pluralism is preached over a proud national identity, or in response to entities that refer to these feelings as populist anger, fringe stances and Euroscepticism. (12 comments)

Merger Monday

Boeing (BA) agreed to acquire Spirit AeroSystems (SPR) for $37.25 a share in a $4.7B all-stock deal that will give the plane maker more control over its supply chain amid ongoing safety issues. The deal would effectively reverse Boeing’s spinoff of Spirit in 2005, which was aimed at cutting costs by outsourcing the assembly of fuselages and other parts. Rival Airbus (OTCPK:EADSF) will also buy some Spirit Aero assets to support the European company’s programs. Elsewhere, the DOJ is urging Boeing to plead guilty to a criminal charge after finding that the planemaker violated a settlement over its fatal 737 Max crashes in 2018 and 2019. (21 comments)

Surveillance network

FedEx (FDX) is said to be sharing surveillance feeds with local law enforcement as part of an AI car surveillance network. The feeds are from AI-powered cameras made by Flock Safety, which has a presence in 4,000 cities across over 40 states, according to Forbes. Flock has similar arrangements with other multi-billion dollar companies, including Simon Property Group (SPG) and Lowe’s (LOW), which share mall feeds with local cops to combat shoplifting. Kaiser Permanente, one of the largest health insurers in the U.S., has also shared data with Flock’s license plate readers for intelligence support. (8 comments)

Nuclear AI

Amid surging demand for electricity to power AI data centers, the tech industry is moving to secure a steady supply through nuclear power plants. The latest in the spotlight is a reported potential deal between Amazon (AMZN) Web Services and Constellation Energy (CEG). Vistra (VST) and Public Service Enterprise (PEG) have also held talks for ‘behind-the-meter’ deals, where a large customer gets electricity directly from a plant. While the renewed interest in nuclear power bodes well for the industry, the deals could divert existing electricity resources, strain the power grid, and impact targets for reducing emissions. Take the WSB survey. (6 comments)

Today’s Economic Calendar
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending

What else is happening…

Inside Out 2 leads box-office sales, crossing $1B to set new record.

BAT’s (BTI) Reynolds American brings nicotine-free vapes to U.S.

BlackRock (BLK) to buy U.K. data provider Preqin in $3.2B deal.

Tesla has a few major tests on the calendar before robotaxi event.

Supreme Court rulings paring regulatory power will impact energy policy.

Costly drugs force a third of Americans to leave prescriptions unfilled.

Microsoft (MSFT) informs customers of exposure to Russian hack.

Rite Aid (OTC:RADCQ) bankruptcy bid is approved by court.

JPMorgan: Trump may be more lenient on antitrust enforcement.

Dangerous Hurricane Beryl closes in on southeast Caribbean.


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