TOPLEY’S TOP 10 May 10 2024 

1. Sell Side Consensus Indicator Neutral

There is not “extreme bullishness” from Wall Street.

2. U.S. Strong Profit Margins vs. International

The Daily Shot Brief Equities: The ability of US firms to maintain strong margins continues to exceed expectations.

Source: Deutsche Bank Research

3. Summertime Historical Returns

Nasdaq Dorsey Wright

4. Post Covid Vaccine Healthcare Stocks

From Abnormal Returns Blog

5. Bitcoin ETF Price vs. Flows

Marketwatch By Frances Yue  
Last week, bitcoin’s BTCUSD, 0.46% price rose despite a net outflow of $468 million from bitcoin ETFs, according to data from crypto market maker Wintermute. And in the first three days of this week, bitcoin fell roughly 3%, even though the ETFs saw an aggregate inflow of about $192 million. Bitcoin was trading at around $62,390 as of Thursday afternoon — up 48.5% year to date, but down more than 15% from its all-time high of $73,798 reached in March, according to Dow Jones Market Data.
“The varied demand for bitcoin suggests that the market is maturing and may not necessarily remain strongly correlated with ETF flows in the future,” analysts at Wintermute’s OTC desk wrote in a recent note.

IBIT below highs

6. Airbnb -13% Correction

ABNB approaching 200-day

7. New Home Construction Hasn’t Kept Pace

Capital Group, Martin Jacobs

8. Rent Inflation Should Continue to Fall

Nasdaq Dorsey Wright New rents inflation peaked two years ago, but CPI rent inflation is a year behind
The story is similar in housing. New rent inflation (looking just at new lease prices each quarter) peaked in Q2 2022 at 12% YoY, but has since fallen to 0.4% p.a. (chart below, blue line).
But the CPI measure of rents (chart below, purple line) has been much slower to fall. That’s partly because it’s a sample of all rents – not just newly signed or renewed leases.
The short story here though, is that rents also seem more likely to fall in the future too.

9. US cities drawing more millionaires with lower taxes, cheaper homes, and shorter commutes

Scottsdale, Arizona. 

  • Consulting firm Henley & Partners identified 3 US cities with huge potential for wealth growth.
  • They have faster growth in millionaire residents, said Henley, which advises the wealthy on moving. 
  • Scottsdale, Palm Beach, and Greenwich draw high-net-worth people leaving New York and California. 

New York, Los Angeles, and Chicago may no longer hold the same sway for millionaires and billionaires anymore, according to consulting firm Henley & Partners.
Instead a “millionaire remix” is underway, according to the firm, in which increasing numbers of wealthy people are choosing destinations farther away from the economic centers that once dominated.

“Cities such as Austin, Miami, and Scottsdale are gaining residents, while traditional hubs such as Los Angeles, New York, and Chicago experience modest declines,” wrote Henley & Partners managing partner Mehdi Kadiri.

Henley & Partners, a London-based firm that advises wealthy people on moving and citizenship, tracks the movements of high-net-worth individuals using data from wealth intelligence firm New World Wealth.

Alongside its new ranking of the world’s wealthiest cities — ones with the most millionaire and billionaire residents — Henley & Partners also highlighted smaller spots poised for significant wealth growth in 2024 and beyond.

Take Scottsdale, Arizona, a city just outside Phoenix, prized for its resort-like homes and amenities, including golf courses, which come at a fraction of the cost of nearby California.

Two other cities with fast-growing wealthy populations — Palm Beach, Florida, and the posh Connecticut suburbs of Greenwich and Darien — attract finance types. Lower taxes and quality-of-life improvements may also motivate high-net-worth individuals to move.

The numbers of wealthy residents in these cities might be smaller than in the major hubs, but their rate of growth is much higher. New York, for example, has 349,500 millionaires, according to Henley & Partners, while Scottsdale only has 14,500. However, the number of millionaires in Scottsdale grew 102% from 2013 to 2023, while New York’s millionaire population went up 48% over the same period.

10. An art market full of cracks is about to face a $1 billion test

Robert Frank@ROBTFRANK

The key May art sales at major auction houses are expected to be down from last year, as wealthy buyers and sellers take a breather from the frenzied prices of 2021 and 2022.

Art auction sales at Christie’s, Sotheby’s and Phillips over the next two weeks are expected to total $1.2 billion, down 18% from a year ago and nearly half the total for the May 2022 sales, according to ArtTactic.

It extends a recent decline for the art market from its post-Covid peak, when cheap money, a booming stock market and fiscal stimulus saw record sales. Last year, global auctions of fine art fell 27% from 2022 — the art market’s first contraction since the start of the pandemic in 2020 — and the average price dropped 32%, marking the biggest decline in seven years, according to ArtTactic.

During the first quarter of this year, sales in the contemporary and postwar category — the big money maker and growth driver for the art market in recent years — plunged 48%, according to ArtTactic.

Total auction sales and lots sold 2019–2023

The auction houses say demand from buyers remains strong. The problem, they say, is supply, as collectors hold back on selling their trophies for a better market environment. This spring, there are also no big single-owner collections up for sale, like the Macklowe Collection or Paul Allen Collections that helped power sales in previous years.

“We’re seeing what people perceive as a smaller offering this season,” said Brooke Lampley, global chairman and head of global fine art at Sotheby’s. “The proof is in the pudding. It’s the buyers showing up and what the work will sell for that will define our perception of the art market right now. And I expect the results to be strong.”