SAUDIS SPARK OIL SQUEEZE

Oil shot up to $90/barrel as OPEC+ leaders, mainly Saudi Arabia and Russia, extended supply cuts. They're keeping 1 million fewer barrels per day on the market for another three months. This could nearly double the expected supply shortage for year-end according to the IEA.

Bad timing, too. Summer saw record global oil demand, driven by air travel and China's consumption. Meanwhile, U.S. oil reserves are at a 40-year low. Unlike last year, when the U.S. tapped reserves to offset Russia's Ukraine invasion, there's no quick fix this time.

GRIT TAKE: In 2008, oil soared to $140/barrel with U.S. reserves full and a financial crisis underway. Now? Low reserves, sky-high demand, and inflation haunting us. And guess what? Gas prices are climbing again. Now higher than at this time last year and the second-highest on record for this time of year going back to 1994. Upside? Potentially big. We're bullish on energy stocks.

CHINA’S EVERGRANDE SOARS +83%

Chinese builder’s surged nearly 10% as investors bet the government will step in to stabilize the heavily indebted sector. Evergrande, once China’s second largest property developer soared +83% - it’s biggest jump since 2009. This comes a day after Country Garden just dodged a default.

The rally? Probably a short squeeze, especially hitting smaller, volatile developers. But hang tight, more could be coming. China's Securities Times is urging the government to keep easing rules on buying property in less popular cities.

GRIT TAKE: Lately, China's been boosting its housing market—like it did in '08—by slashing down payments and dropping mortgage rates. We think more action's needed. Fingers crossed this isn't China's Lehman disaster. Our thoughts? Stay on the sidelines for now.

FED’s BIG GDP DOUBLE UP

Bloomberg's buzzing that the FED's set to double its 2023 GDP growth projection. Why? The economy's killing it—big spending, retail sales, factory action, and a hot housing market.

Just three months back, after two good GDP quarters (Q1: 1.8% and Q2: 2.5%), folks thought we'd hit a speed bump. Not anymore. The Atlanta FED's now eyeing a huge 5.6% Q3 growth, way up from the FED's old 1% call for 2023. Watch out for the FED’s new number at the Sept 19-20 meeting—bet it's going up.

GRIT TAKE: GRIT TAKE: Odds of a U.S. recession in the next year? Still 60%. Chance the FED hits pause on rate hikes this September? A whopping 90%. Don't get too comfy with the rosy economic numbers—they're old news. Rate hikes take time to kick in. Expect the market to tread water till we get the rate hike lowdown. Watch Canada today—they hit pause on rate hikes in January, then hit play in June when inflation spiked. Keep your eyes peeled! 🇨🇦👀

Coming Up Today…

Hitting the tape this morning: U.S. mortgage applications just tanked 2.9% to a 27-year low—good luck buying a house with 7% rates! On deck today: PMI, ISM, and the FED Beige Book. Stay tuned! 🚀

Headlines You Need To Know:

• United Airlines lifts nationwide ground stop

• Apple, Google, Nvidia are open to buying ARM shares

• Bitcoin ETF Grayscale urges U.S. SEC to approve bitcoin ETF

• Rate hikes curb output for at least a decade, SF Fed study says

• FTC Antitrust suit against Amazon set for this month

• North Korea finds new leverage in Ukraine war

• Leader McConnell's health episode shows no signs of stroke

• Facebook is getting rid of the news tab in Europe

• IRS slows refund payments pandemic-era tax break

• Proud boys leader sentenced to 22 years in prison for Jan. 6th

• Biden tests negative for covid-19 following First Lady diagnosis

• China launches $40 billion state fund for semi-conductors

Just for fun…

Michael Jordan scores BIG each year with Nike

Michael Jordan revolutionized the shoe industry in 1984 due to a royalty clause in his contract. He receives 5% of all Air Jordan sales from Nike. In 2022, it was reported that Air Jordan made Nike $5.1 billion. This means that Nike wrote Michael Jordan a $250+ million check in 2022.

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3 Most Important Charts Right Now

Monthly average performance of the S&P 500

September is the worst performing month of the year

Stocks and Bonds rising together

Stocks go up most years, but when they don’t? Bonds usually do.

Price-To-Rent Per Country

New Zealand and Canada have seen the highest increase since 2000.

TWEET OF THE DAY

The author, publisher or insiders of the publisher may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.