1. Nasdaq Took 15 Years to Recover from the Internet Bubble

The Nasdaq actually went 15 years without hitting an all-time high (from 2000 to 2015), a drought that would be unfathomable to new investors today.

2. MU -45% from Highs

3. 3^rd Biggest One Day VIX Surge Ever on Wednesday

Tom Lee Fundstrat mentions what is notable is how quickly markets recovered from these sell-offs:
– 3 of 4 times, the S&P 500 fully recover within a week
– Jan 2021, Feb 2018, Aug 2024.
– 4 of 4 times, fully recovered within a month

Via fundstrat

4. The Fear and Greed Index

Via CNN Markets

5. XLE Energy ETF -13% One Month

XLE breaking through September lows.

6. The Average S&P 500 Stock is now Down since the Election

Per Sherwood News: That escalated quickly.

The hawkish body language from the Federal Reserve — despite delivering a rate cut — hammered the markets Wednesday.

The S&P 500 and tech-heavy Nasdaq 100 had their second-worst days of the year, while the small cap Russell 2000 suffered its largest decline of 2024.

The force of the sell-off was such that now some key market gauges are actually underwater since Nov. 5. Of course, that’s when President-elect Donald J. Trump’s election win generated a strong stock market reaction from investors excited by the prospect of both tax cuts and regulatory relaxation, which might provide a bit more pep for the domestic economy.

Today, the Trump bump is looking more like a hump verging on a potential slump as the US central bank grows more worried about inflation, though of course he isn’t even in office yet.

Of note: The equal-weighted edition of the S&P 500 is now down since election day. That is, the average member of the benchmark US stock index is worth less than it was on November 5.

7. Novo Nordisk -27% After New Weight Loss Data Released

Via Bloomberg

8. U.S. Population Growth

Via Wolf Street

9. Man Admits to Running Secret Chinese ‘Police Station’ in NYC

From the BBC: Prosecutors say the outpost at Manhattan’s Chinatown was used to help Beijing identify pro-democracy activists in the US

An American citizen has pleaded guilty to helping run what has been described as the first known secret police station in the US on behalf of the Chinese government.

Prosecutors say Chen Jinping and his co-defendent Lu Jianwang opened and operated the station in Manhattan’s Chinatown neighbourhood in early 2022 on behalf of China’s Ministry of Public Security (MPS).

At least 100 such stations have been reported worldwide across 53 countries, with rights groups accusing China of using the outposts to threaten and monitor Chinese nationals abroad.

But China has denied that they are police stations, saying they are “service stations” providing administrative services to nationals overseas.

The outpost, which occupied an entire floor above a ramen stall, did provide basic services like renewing Chinese citizens’ driver licenses, but it also helped Beijing identify pro-democracy activists living in the US, say federal authorities.

Matthew Olsen, an assistant attorney general in the US Department of Justice, called the attempt to operate the undeclared overseas police station “a clear affront to American sovereignty and danger to our community that will not be tolerated”.

The station was closed in the autumn of 2022 after the Federal Investigation Bureau launched an investigation.

But Chen and Lu destroyed text messages they exchanged with an MPS official when they learned of the probe, prosecutors said.

The men, who are both American citizens, were arrested in April last year.

On Wednesday, Chen, 60, pleaded guilty to conspiring to act as an agent for China, and faces up to five years in prison when he is sentenced next year.

Chen’s acknowledgement of guilt is a “stark reminder of insidious efforts taken by the [Chinese] government to threaten, harass, and intimidate those who speak against their Communist Party,” Robert Wells, an executive assistant director of the FBI’s National Security Branch said in a statement.

Lu, 59, has pleaded not guilty and is awaiting trial. Prosecutors have accused him of harassing a purported Chinese fugitive to return to China and for helping to locate a pro-democracy activist in California on behalf of the Communist Party.

At the time of Chen’s arrest, authorities said it marked the first time the US has brought criminal charges in relation to such police outposts.

Mr Olsen said US authorities would “continue to pursue anyone who attempts to aid the PRC’s efforts to extend their repressive reach into the United States”.

In September, Linda Sun, a former aide in the New York governor’s office, was charged with using her position to serve Chinese government interests. She was said to have received benefits, including travel, in return.

Last year, 34 officers from the MPS were also charged with using fake social media accounts to harass Chinese dissidents in the US and spread official Chinese government propaganda.

10. The Stories We Tell Ourselves

From Seth Godin: If it happened to us, our memory of it is a story, our record of it with us at the center.

Even if it’s on video, even if other people were there, our narrative and the context and the play by play belong to us.

The useful question might be: “Is my story helpful?”

And the follow on could be: “Is there any other version of this story that might be more helpful?”

TOPLEY’S TOP 10 December 18, 2024

December 18, 2024

Matt Topley

Daily Top Ten No Comments

1. S&P Value Stocks Have Declined 11 Consecutive Days: The Longest in History

Via Dan Stratemeier, Jefferies Managing Director Equities, Event Driven Strategies

2. Dow Jones Down 9 Consecutive Days, First Time Since 1978

3. United Health is Half of Dow Sell-Off

4. Fed Rate Cut Path to Slow 2025

From Dave Lutz at Jones Trading: With inflation proving sticky, Wall Street banks have started to anticipate that the Fed will forecast perhaps one fewer cut next year, meaning three-quarters of a point in total. And some predict the central bank may pencil in just a half-point, a level that’s broadly in line with what swaps markets are pricing in.

5. Equity supply

From the Daily DC Chart: Unlike previous risk frenzies, this one lacks an equity supply response. This year is tracking to a net negative, and marks three straight years of no supply, with a rolling three-year negative number.

6. Musk Wealth Doubles Bezos

Via Bloomberg

7. Tesla vs. Amazon Chart Post Election

8. Tesla vs. FAANG Stocks Since Election

9. Masa’s SoftBank bets $100B on America under Trump

Via Pitchbook: SoftBank is investing $100 billion into US companies, President-elect Donald Trump announced Monday with CEO Masayoshi Son.

“My confidence level of the economy of the United States has tremendously increased with his victory,” Son said at the press conference.

The colossal bet on US industry is Masa’s latest effort to reassert SoftBank—and himself—as the world’s leading tech investor after having retreated to the sidelines in 2023.

The Japanese investor is in a transitional period. Last month, Rajeev Misra, one of the original architects of the Vision Fund, left the company. After being burned by the tech reset in 2022, SoftBank has restarted investing in startups heavily geared toward AI. Its recent investments include OpenAI and Glean.

Across its two Vision Funds and LatAm fund, SoftBank’s current investment gain stands at $1.9 billion.

But SoftBank’s Vision Fund 2, which it largely deployed in 2020 and 2021, is still underwater to the tune of $22 billion. Despite strong tech stock performance in the second half of 2024, VF2’s fair value remained flat this year: It started 2024 at $33.7 billion, and its fair value had dipped to $32.9 billion as of September 30.

This is a huge sum for SoftBank to deploy from its balance sheet. SoftBank recorded a $17 billion investment gain in the six months ending September 2024—up from a $6 billion loss the year prior.

In 2016, after Trump’s first election victory, SoftBank announced it would invest $50 billion into US companies. It followed through, backing startups such as DoorDash and Slack. Both were tremendously successful for Vision Fund 1, netting a gross return on investment of $7.5 billion and $1 billion, respectively.

But the firm reportedly invested roughly $18.5 billion into the now-bankrupt co-working space provider WeWork.

10. Not a Great Statement on Society

Walmart is putting body cameras on employees. The technology is being used as a deterrent against theft and other bad customer behavior

From QZ: As the holiday shopping season comes to a frenzied peak, Walmart is introducing a new tool that it hopes will help reduce tensions for frenzied staffers. CNBC (CMCSA) reports that the retail giant is going to start affixing body cameras to workers in its stores.

The company told the outlet that the cameras are still in the pilot testing stage, but a Walmart spokesperson did say that “we are always looking at new and innovative technology used across the retail industry.”

One use of the technology will be to create a deterrent for bad behavior by customers, to which retail workers are often on the receiving end. Another use will be to possibly reduce theft. Though the National Retail Federation walked back claims last year about the extent of shoplifting in recent years, the problem remains a concern for stores.

Walmart (WMT) is not the only company whose workers are donning cameras. This summer, discount retail chain T.J. Maxx (TJX) said that its staff would be using body cameras as well.

“When somebody comes in, it’s almost like a de-escalation where people are less likely to do something when they’re being videotaped,” CFO John Joseph Klinger said during a company earnings call, adding that the discount retailer started using the cameras late last year and “definitely feels that they’re playing a role.”

TOPLEY’S TOP 10 December 17, 2024

December 17, 2024

Matt Topley

Daily Top Ten No Comments

1. China Biggest Monthly Outflow EVER

China capital markets outflow hits record high in Nov after Trump election win.

From Reuters: China’s capital markets outflow reached a record high of $45.7 billion in November, according to official data tracking cross-border payments, as Donald Trump’s U.S. presidential election win roiled global portfolio flows.

Cross-border receipts from portfolio investments were $188.9 billion, while payments totalled $234.6 billion, resulting in the biggest monthly deficit on record, according to data from China’s foreign exchange regulator.

The data release comes as China’s policy-driven stock market rally that started in late September is losing steam, while the yuan has slumped against the dollar in the face of tariff threats from Trump.

The massive deficit, which widened from a $25.8 billion outflow in October, also reflects weakening investor confidence, despite a slew of policies announced by Beijing since late September to stimulate an economy mired in a property crisis, weak consumption and persistent deflation.

2. KWEB-Chinese Internet Stock ETF

Back into sideways pattern…2 years sideways.

3. AAII Sentiment: 50 Weeks of Bulls in 2024, Not Seen Since Late 90’s

4. U.S. Large Cap Still Dominates Inflow

5. Fund Managers Cash Levels

6. Mapped: Crypto Ownership Growth by Region in 2024 ₿

Via Voronoiapp

7. Majority of Investors consider Sports, Gaming, and Music Rights too risky, New Survey Finds

Goldman Sachs recently called sports investing the next trillion-dollar market.

So the answers that 107 institutional investors from around the world gave to a survey this fall are surprising. Nine in 10 said it’s too risky.

They also showed little appetite for two other hot areas — gaming and music rights, which NYT says is being swallowed, and ruined, by private equity. Middle Eastern investors may have this space to themselves.

The report has grim news for the industry: 90% of investors said they’ve received requests from money managers for fund extensions as dealmaking remains slow, and more than two-thirds said they’ve seen funds raise less than what managers had targeted.

Via Semafor

8. Global Coal Supply

9. Annual Income Needed to Buy Home

10. Psychology Today Shares the 5 Things that can Increase Brain Inflammation

Alcohol, diet, and smoke, for starters.

Key points:

Brain inflammation may damage our mood, cognition, and general brain health.
Diet quality plays a major role in our overall inflammatory state, and may significantly influence brain inflammation.
Poor metabolic health, exposure to smoke, and excess alcohol may all negatively impact brain inflammation.

From Psychology Today: When we experience inflammation in our joints, we may have redness, swelling, and pain. If we have inflammation in our skin, we might get an itchy or otherwise annoying rash. But what happens if there is inflammation in our brains?

In recent years, scientists have shown that inflammation in our brains may be a significant contributor to everything from risk for dementias like Alzheimer’s to mood issues like depression to trouble making healthy decisions. That’s a big deal, because these brain issues are major contributors to our quality of life.

Some factors in our lives that contribute to brain inflammation may be unavoidable, and some may have occurred long ago. But there are still several things that we can do to help keep levels of brain inflammation in check. Here are 5 great examples of things worth paying attention to:

1. A low-quality diet.

The food we eat is likely a major contributor to our overall immune state as well as the immune state of our brains. It’s thought that a diet rich in processed food (think added sugar, refined carbohydrates, seed oils, processed meats) may contribute to inflammation in our brains, while a diet rich in leafy greens, nuts, fruits/berries, whole fish/omega-3s, polyphenols, gut-healthy fiber (consider adding some fermented foods for an extra gut-health bonus) as well as flavorful spices like cloves, cinnamon and turmeric may have the opposite effect. For inspiration, check out the Mediterranean diet, which is especially rich in all of these key healthy nutrients.

2. Poor metabolic health.

Research shows that our metabolic health (our body’s ability to extract nutrients from and generate energy from our food) is tightly linked to our immune health, including levels of inflammation. We now know that most of us are likely to be metabolically unhealthy, and that this may have carryover effects for our risk of brain diseases, in part by way of inflammation. Key variables that influence metabolic health include our diet (especially the way our food influences insulin and blood sugar levels), whether or not we get exercise, and even our levels of psychological stress.

Some basic strategies to help improve metabolic health include paying attention to and limiting your added sugar intake, lowering your daily consumption of simple carbohydrates like white bread, pasta, muffins, cakes cookies, and cereal, and engaging in daily movement practices.

3. Exposure to smoke and substances (especially excess alcohol use).

Research shows that exposure to smoke (either because we smoke cigarettes or smoke in air pollution) may increase levels of inflammation in our brains. Similarly, it’s been proposed that exposure to certain drugs may have a damaging effect on our brains by way of the immune system. Though the use of some of these drugs is less common, we likely need to be careful about drinking too much alcohol which may increase inflammation in the brain. It’s still debatable if there really is a “brain safe” level of alcohol consumption.

Some basic steps include getting help quitting smoking (if you smoke), doing your best to reduce exposure to air pollution (check your local AQI) whenever possible—including considering a HEPA filter in your home, and limiting alcohol consumption as viable.

4. Too much weight around our bellies.

Our fat cells are immunologically active cells, and this appears to be especially the case for our belly fat. White fat cells deep in our bellies and around our internal organs are thought to contribute to inflammation in our bodies, which may negatively impact inflammation in our brains. While weight loss is a challenging conversation, some strategies worth considering as it relates to decreasing our belly fat include cutting back on refined carbohydrates and added sugar, as well as limiting alcohol consumption.

5. Chronic stress.

One of the most powerful connections between brain inflammation and what we put into our bodies concerns stress. When we experience chronic stress, which can happen for a wide variety of reasons, it appears to increase inflammatory pathways in the brain. Though some stress may be unavoidable, a few practices worth trying include limiting exposure to stressful news and social media (especially before bed) and trying a stress mitigation technique like mindfulness, time in nature, or breathwork.