Things you see at the top
Joris Bastien
Alpha Engines for #HNWI, #familyoffice, #hedgefund and RIA portfolios . Focus on macro and digital spaces. Stoic Epicurean (!) Atomist believing in duty. Fine art photographer.
Quick note:
Today 5pm is the last Croissant Files LIVE on a Monday, as it will move back to Saturday morning 10.15am as soon as this Saturday.
In the meantime, see you tonight, or watch the video later if you have better things to do (I doubt ...) on this labor day.
Since it's a holiday, we'll try to keep it short and sweet. Please join here.
So, the NVidia week is gone, NVidia dropped, and we've seen things we usually see at the top.
GEOPOLITICS
Eastern Europe
Ukraine gamble in Kursk appears not to have the expected impact. While Ukraine depleted the Eastern front for this attack in Russian territory, Russia did not move its troops to defend the Kursk region, and is now making significant advances in the East towards the Dnieper river.
The response from NATO is to send more weapons with the capacity to strike inside Russian territory.
According to the United Nations, Russia's Kursk region threatens nuclear disaster, as the IAEA Director Grossi indicated that the Kursk Nuclear Power Plant is targeted by Ukrainian drones.
Europe
Dissensions in Europe are growing bout the support to Ukraine as EU countries have failed to agree on providing a new financial package for military supplies.
Moreover, the EU can also not agree on using Western weapons for strikes in Russian territory.
Middle East?
The US Navy forces that have been sent to the Middle East have now arrived in the region and are awaiting the start of operations.
Nearly one third of all global US naval assets have been redeployed to defend Israel, and for the first time since WW2, there is not a single US aircraft carrier in the Pacific, while China is actually ramping up its presence.
The US now estimates that Iran’s stockpile of enriched uranium would allow them to enrich uranium to ‘weapons grade’ within one week, and potentially produce enough WGU for 9 nuclear weapons in the first month.
It is now silently admitted that the Houthis have taken total control of access to the red sea over the US …
Asia
China is asserting its domination with:
Global?
The state of freedom in the free world:
领英推荐
ECONOMY
The Fed rate cuts are finally coming.
It has now been 13 months since the last Fed rate hike, marking the second longest period since the 1970s (longest was from June 2006 to September 2007; the average length between the last hike and first cut is 8 months).
Treasury markets are in their biggest drawdown ever, with the Bloomberg Treasury total return index down 11.0% from its 2020 peak (larger than any other drawdown over the last 100 years). The second largest drawdown of the Treasury market was seen in the late 1970s at 7.5%.
US net interest payments on national debt are going exponential and have nearly doubled in just 2 years, hitting $861 billion over the last 12 months (not even including $100 billion of Federal Reserve payments to banks as interest payments).
More than the economy facing a recession, this is the US government itself that needs lower interest rates.
It also indicates that the 2% inflation rate is not a target any more, but a floor.
The NVIDIA week: the stock fell over 8% on earnings report despite beating expectations, and erased $250 billion in market cap over 5 minutes.
Looks like the easy money has been made already by NVidia.
The Richmond Fed Manufacturing index dropped again in August to the lowest level since the 2020 pandemic. This is concerning as it has a high correlation with the nationwide ISM PMI manufacturing index data. The Richmond Fed Employment index also declined to its weakest point in 4 years.
All data points to a deeper contraction of the manufacturing industry and deterioration of the services sector.
MARKETS
Markets were up last week on what can mostly be attributed to an end of month window dressing, with all eyes on the NVidia earnings report discussed above.
There were signs with NVidia insider trading …
The market concentration has now reached 2000 Dot-com bubble levels, with Tech, Telco, and healthcare sectors reached a record level of 45% of market cap share in July 2024 (previous all-time high of 44% seen during the 2000 Dot-Com bubble). Inversely, financial, energy, and materials fell to 25% as a % of global equities.
Warren Buffet seems to be starting to worry about BofA solvency, as the manager dumped ~6.5bn$ of shares since July 18th.
At the same time, BofA is running a 25bn$ stocks buyback programme to hold up the price, thus helping Warren exit a ton of shares at a decent price.
See you tonight for more market comments, here on LinkedIn LIVE