1. No Idea What Happens Going Forward but this is 29th 5% Correction Since 2009 Low

S&P 500 pullback. “The S&P 500 is down 5.6% from its peak on July 16, the 2nd pullback of the year. This is the 29th correction >5% off of a high since the March 2009 low. They all seemed like the end of the world at the time.”

@charliebilello

 

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2. Earnings Season Volatility 

Earnings season volatility. “If it’s felt like a volatile earnings season, that’s because it is. In fact, this has been the most volatile earnings season since the financial crisis.”

Brian Garrett – Goldman Sachs via Sherwood

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3. July Leadership Rotation -Ned Davis

www.ndr.com

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4. We’ve Talked About $6 Trillion in Money Markets…B of A Saying $18 Trillion in Cash

Spilled Coffee Blog
If the consumer can handle any type of slowdown, this is the time. Take a look at the amount of cash US households have now compared to pre-COVID. $18 trillion vs. $13 trillion. That’s over 40% more cash now than in 2019.

Source: Seth Golden

 

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5. Amazon -19% from Highs

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6. Intel Trades Back to 1999 Levels….18K Layoffs

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7. Earnings Going Up for Utilities

Capital Group

https://www.capitalgroup.com/

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8. Utility Index Chart …Summer Ramp Up

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9. Surging Odds of 50 Bps Cut by Fed in September

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10. The last little bit -Seth’s Blog

Important hills usually get much steeper at the top.

99% of the training in competitive athletics is devoted to the last 1% of performance. A tenth of a second.

The same is true for squeezing the last bit of performance out of a car, a grape or a semiconductor. And healthcare, luxury goods and science as well.

As soon as we declare it important and invite the world to compete, the problems become more difficult.

Our experience tells us that more input leads to more output, but in asymptotic conditions, where competition is seeking to go to the very end of the curve, this rule is often suspended. The entire point of the competition is how extreme the last few steps are.

The options are pretty clear:

1. focus on activities where you’re in the sweet spot of the curve, where more preparation, focus and effort lead to huge benefits. This means walking away from competitions against people who are committed to being unreasonable.
2. embrace the unreasonable and accept that your competitors will as well.

While the unreasonable is thrilling, it’s difficult to build a sustainable career around it.

https://seths.blog

1. AMD -40% from Highs Before Last Night’s Earnings

+9% after earnings

 

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2. NVIDIA -25% Off Highs

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3. Crowdstrike -43% from Highs

From Callum Thomas @Callum Thomas (Weekly S&P500 #ChartStorm)

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4. The Cap Spending Boom No Slowdown

https://www.geekwire.com

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5. Rotation Watch Continues

Equities: The rotation from mega-cap stocks to smaller-capitalization shares continues.

 

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6. Tech Jobs No Longer Concentrated In Cali

Bloomberg -Justin Fox

https://www.bloomberg.com/opinion/articles/2024-07-26/tech-jobs-keep-moving-out-of-california-don-t-panic-yet?sref=GGda9y2L

 

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7. More Good New for Inflation

From Dave Lutz Jones Trading
Journos note that Commodity prices are set for their worst month since the middle of last year

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8. Revenue Exposure to Foreign Countries

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9. Who was Ismail Haniyeh and why is his assassination a blow to Hamas?

Reuters By Samia Nakhoul and Stephen Farrell

https://www.reuters.com/world/middle-east/obituary-tough-talking-haniyeh-was-seen-more-moderate-face-hamas-2024-07-31/

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10. 12 Career Advice Bullets

 

1-2. AI vs. the Web

I wrote about AI boom not being a 1999 moment in my quarterly letter, Bespoke comments below.

Bespoke Investment Group In our premium research over the last few months, we’ve done a lot of analysis comparing the launch of ChatGPT and the AI Boom that has ensued with other major technological advances over the last few decades.  One of the most correlated periods to now in terms of the Nasdaq 100’s performance was the launch of the modern web browser (Netscape) back in late 1994. Just as ChatGPT brought AI to the masses, the Netscape browser made the internet easily accessible.As shown in the chart below that was included in our latest Bespoke Report newsletter, if we tie the release of ChatGPT in November 2022 to the release of the Netscape web browser in December 1994, the Nasdaq 100 is up about the same amount, and we would currently be around August 1996 on a time scale.
What’s interesting about August 1996 is that we’d be about four months away from Fed Chair Alan Greenspan’s famous “Irrational Exuberance” comments that were meant to highlight some of the frothiness that he was seeing in markets at the time.

Those comments by Alan Greenspan turned out to be correct (eventually), but if we expand the chart above out ten years, they were about three years early!  As shown below, the Nasdaq would go on to experience a massive bubble for years after Greenspan’s first mention of “irrational exuberance” in late 1996.There are plenty of investors saying the same thing and worse about Tech/AI stocks right now, but keep in mind that we’ve yet to see a pick-up on the M&A and IPO fronts that usually accompany bubbles.  Some of that can be tied back to the fact that companies that may have gone public 25 years ago are often getting acquired before they go public, but overall, the AI Boom, while certainly hot, still seems far more subdued than what we saw during peak Internet boom back in the late 1990s.

Of course, every boom/bust cycle is different, and the chart below is not to suggest that the Nasdaq will continue following the path it took back in the 1990s. We just thought it was helpful to see the two periods side by side when comparing the launch of ChatGPT to the launch of the Netscape web browser.As always, past performance is no guarantee of future results!We have a lot more interesting analysis like this in our newest Bespoke Report. If you’d like to read it, simply start a trial to one of our three membership levels.

https://www.bespokepremium.com/interactive/posts/think-big-blog/ai-vs-the-web

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3. Regional Bank ETF KRE

KRE-42% off lows….back to 2022 levels.

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4. US vs. Euro Stocks

From Callum Thomas @Callum Thomas (Weekly S&P500 #ChartStorm)

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5. Another Look at the Diverging Paths of India and China

The business cycles in China and India are decoupling after having grown in sync for decades, see chart below.

Torsten Slok, Ph.D.Chief Economist, PartnerApollo Global Management

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6. Truflation Hits 1.6%…Good Sign for Fed

@Charlie Bilello

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7. Copper Sell-Off Helping Lower Inflation

Copper Sell-Off Helping Lower Inflation

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8. Europe Mega Cap 50 Failed to Make New Highs

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9. Annual Hours Worked by Country

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10. Americans Opinion on Government Departments

 

www.chartr.com

 

1. Tom Lee Fundstrat on Small Caps

Fundstrat Head of Research Tom Lee and his team saw an important quantitative signal last week that historically has been followed by strong win ratios for small-caps: The Russell 2000 has been volatile, trading at +/- 1% in 11 out of the last 12 trading sessions. This has happened only 10 times in non-bear markets since 1979 – in 1987, 1998, 2009 (4x), 2011, 2020 (2x). “These were all clear ‘risk-on’ years and more importantly, ‘early cycle’ years,” Lee pointed out. In those historic precedents we found high win ratios for small-caps one-month forward, as well as three, six, and 12 months afterwards. In fact, the historical win ratio was 100% in the three-, six-, and 12-month forward-looking periods. We see this in our Chart of the Week

Home

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2. Over the Last 12 Trading Days…13% Spread Between Small Caps and S&P

@Charlie Bilello
US Small Caps are up 10% over the last 12 trading days while US Large Caps are down 3%. The 13% spread is the largest 12-day Small Cap outperformance ever.

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3. What Will It Take for Equal Weight S&P to Outperform Cap Weight?

Barrons Ben Levisohn 
Bank of America’s Ohsung Kwon looked at when the equal-weight S&P 500—another proxy for the rotation trade—outperformed the market-cap-weighted version of the index. He found that it did so 90% of the time when the yield on the 10-year Treasury fell a full point from its 12-month high and when the Institute for Supply Management’s manufacturing purchasing managers index rose over four points from its lows. For those two things to happen now, the 10-year yield would have to drop to 3.99% from a recent 4.21%, and the PMI would have to hit 50.5, from June’s 48.5. That seems like a big ask.

https://www.barrons.com/articles/a-stock-market-rotation-has-occurred-what-comes-next-6137aa72?mod=past_editions

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4. Corporate Insider Selling

Corporate insiders are dumping stock at the fastest rate in more than a decade
Marketwatch By Mark Hulbert 
Corporate insiders have taken a sharply pessimistic turn — selling their companies’ shares at the fastest rate in at least a decade.  That’s according to InsiderSentiment.com, a website maintained by Nejat and Jon Seyhun. The former is a finance professor at the University of Michigan and one of academia’s leading experts on interpreting the behavior of insiders.  In calculating their insider-sentiment indicators, the Seyhuns focus only on two of the three categories that the law defines as insiders (corporate officers and directors) and ignore the third (a company’s largest shareholders). That’s because Professor Seyhun has found from his research that these large shareholders on balance have no privileged insight into their companies’ prospects. Because their transactions are typically several orders of magnitude larger than those of officers and directors, including them skews the much more valuable signals coming from officers and directors.

The insider indicator that the Seyhuns calculate is the percentage of all companies with any officer or director transactions for which there has been net buying. The past decade’s average is 26%, and up until July this ratio had been slightly to moderately below this average. In the first three weeks of July, however, the insider buy ratio turned “deeply negative” — to 13.6%, its lowest in at least a decade, as you can see from the accompanying chart.

 

https://www.marketwatch.com/story/corporate-insiders-are-dumping-stock-at-the-fastest-rate-in-more-than-a-decade-4cc5ed3a

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5. Ethereum New ETF Lags Bitcoin

MarketEar Blog

https://themarketear.com/newsfeed

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6. Chinese Tech ETF -16% from 2024 Highs

KWEB closes back below 200-day

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7. Warren Buffett Reduced Most of Top Holdings

https://www.barrons.com/articles/warren-buffett-is-in-a-selling-mood-whats-next-16694668?mod=past_editions

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8. Home Inventories Inching Higher But Still Below Average -Bloomberg

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9. Africa Divided in Half by Religion

https://www.zerohedge.com/

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10. The Growing Evidence That Americans Are Less Divided Than You May Think

Time BY KARL VICK

Read Full Article
https://time.com/6990721/us-politics-polarization-myth/

 

1. FANG+ ETF Closes Below 50Day Moving Average….-11% from Highs

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2. NVIDIA Closes Below 50-Day…-18% from Highs

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3. AI Stock …SMCI -40% from Highs…

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4. Tesla -20% from July Run Up

50day never made it thru 200day to upside on chart.

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5. EV Inventory 125 Days

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6. Chipotle Closes Below 200-Day

Not sure if CMG, UPS, MCD telling us consumers slowing down spending.

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7. Shares Of Major French-Fry Supplier Crash As Restaurant Traffic Slowdown Worsens

ZEROHEDGE BY TYLER DURDEN

One of the world’s largest producers and processors of frozen french fries, waffle fries, and other frozen potato products reported fourth-quarter profit and sales that missed estimates. The company also issued a below-consensus full-year adjusted EBITDA outlook due to sliding global restaurant traffic. This is an ominous sign, as elevated inflation and high interest rates are squeezing consumers. 
Lamb Weston reported adjusted earnings per share of 78 cents for the fourth quarter ending May 26, which was well below analysts’ expectations tracked by Bloomberg of $1.25. Revenue also missed, coming in at $1.61, versus the average estimated $1.7 billion. 
Here’s a snapshot of fourth-quarter earnings (courtesy of Bloomberg): 

• Adjusted EPS 78c, estimate $1.25 (Bloomberg Consensus)
• Adjusted Ebitda $283.4 million, estimate $357.4 million
• North America adjusted Ebitda $276.5 million
• Net sales $1.61 billion, estimate $1.7 billion
• North America net sales $1.11 billion, estimate $1.17 billion
• International net sales $498.7 million, estimate $530.7 million
• North America volume -7%
• International volume -9%
• Price/mix +3%, estimate +5.41%
• North America price/mix +3%
• International price/mix +2%

https://www.zerohedge.com/markets/shares-major-french-fry-supplier-crash-amid-restaurant-traffic-slowdown-worsens

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8. Small Cap 600 Forward P/E Gap vs. S&P Got Close to Internet Bubble Levels

Liz Ann Sonders Schwab

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9. Blackstone Mortgage REIT Cuts Dividend by 24%

https://www.bloomberg.com/news/articles/2024-07-24/carson-block-s-call-for-blackstone-reit-stress-starts-to-show-up?srnd=homepage-americas&sref=GGda9y2L

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10. The two bicycle errors -Seth Godin Blog

Momentum activities like public speaking, board sports and leadership all share an attribute with riding a bicycle: It gets easier when you get good at it.

The first error we often make is believing that someone (even us) will never be good at riding a bike, because riding a bike is so difficult. When we’re not good at it, it’s obvious to everyone.

The second error is coming to the conclusion that people who are good at it are talented, born with the ability to do it. They’re not, they have simply earned a skill that translates into momentum.

There’s a difference between, “This person is a terrible public speaker,” and “this person will never be good at public speaking.”

And there’s a difference between, “They are a great leader,” and “they were born to lead.”

The thing about momentum activities is that we notice them only twice: when people are terrible at them, and when they’re good at it. That includes the person you see in the mirror. 

https://seths.blog