Congrats To The Dumb Money Contest Winners!

1. Damian McCarville

2. Mark Hake

3. Doug Robertson

4. Kim David

5. Drew Mueller

6. Nick Blaney

7. Ian Terry

8. Tamara Bonn

9. Lisa Swartzman

10. David Mulholland

11. Evan Brown

12. Bob Koshil

13. Aamir Dada

14. Darryl Kirsh

15. Cathy Morvai

📧 Please check your email inbox to find your code! 🔐

📽️ Tickets will be eligible for use at any Cineplex Theatre in Canada. 🍿

Sponsored By: Elevation Pictures

HUAWEI’S 5G CHIP: A U.S SANCTION DEFIER

Huawei's new Mate 60 Pro smartphone appears to support 5G, defying U.S. sanctions aimed at preventing just that. This could pose a challenge for Apple, as China is one of its key markets.

For years, the U.S. has labeled Huawei a national security threat due to its ties to the Chinese government and military. In 2019, U.S. sanctions nearly crippled Huawei's smartphone business by cutting off access to crucial 5G chips and Google software.

But now, Huawei seems to be bouncing back. While not officially confirmed, reviews suggest the Mate 60 Pro can achieve 5G-level download speeds. The chip is made by SMIC, China's largest contract chipmaker, puzzling U.S. experts who thought such a chip couldn't be made without a specific machine from Dutch firm ASML—a machine restricted from being sold to China.

The world is now watching to see if these chips can compete globally in terms of speed and cost.

GRIT TAKE: Apple's already feeling the heat with China's ban on iPhones for government officials. If Huawei's new 5G-capable phones deliver, this could be a seismic shift, potentially jeopardizing up to 30% of Apple's revenue linked to China. The big question is whether Huawei's 5G tech measures up. If it does, Apple has reason to worry. Huawei not only matches Apple's premium brand image but also carries the weight of national pride—a factor Apple can't compete with. Keep your eyes peeled; this could get interesting.

HEDGE FUNDS: THE BIG SHORT

A third regulator is now warning that hedge funds' massive bets in the $25 trillion bond market could lead to problems. U.S. data shows record levels of risky "short" bets on some Treasury bonds, totaling around $600 billion, according to the Bank for International Settlements (BIS).

In its latest report, BIS warns about hedge funds using a strategy called the "basis trade." This involves making money from tiny price differences between Treasury bonds and similar futures contracts.

The big issue is how much borrowed money, or "margin," hedge funds are using to make these bets. Using a lot of margin can amplify gains, but it can also magnify losses. If the market turns against them, these highly leveraged bets could force hedge funds to quickly sell off, causing even more market chaos.

Past events like the financial stress in September 2019 and the early days of the COVID-19 pandemic in March 2020 have shown that such risky bets can lead to wild market swings. These have been so severe that the Federal Reserve had to step in to stabilize things.

GRIT TAKE: This is a high-stakes game that could either blow up or fizzle out. If the bond market suddenly flips—expecting rates to drop sooner than thought—then we're in for a rough ride. Right now, the market is betting on another rate hike this year, so it seems stable. But keep an eye on it. Interestingly, asset managers are hedging their bets by going long on Treasury funds.

GLOBAL SLOWDOWN

Growth Now, Slowdown Later: That's the OECD's latest outlook. They predict a global GDP uptick to 3% in 2023, but a dip to 2.7% in 2024, largely due to the swiftest rate hikes in four decades.

For the U.S., expect a modest 2.2% growth this year, but a slowdown to just 1.3% in the election year of 2024.

Trouble spots? Look to the Euro Area and China. Germany is even expected to shrink by 0.2% in 2023. And if China's property market and domestic demand keep faltering, global growth could take an even bigger hit.

On the inflation front, the OECD advises against premature rate cuts, recommending to hold off until "well into 2024."

GRIT TAKE: Take the OECD's forecasts with a grain of salt—there are too many variables. Case in point: oil prices have surged 25% since May, driving U.S. gas prices to 2023 highs. Keep in mind that over half of last week's CPI jump came from rising gas prices alone. If those prices stay high or climb further, we could see inflation sticking around longer and growth decelerating more quickly than expected. Stay alert.

Coming Up…

TODAY: Housing Starts, Building Permits and AutoZone earnings (beat)

Wednesday: FED rate decision, FedEx and General Mills earnings.

Thursday: Bank of England rate decision.

Friday: Bank of Japan rate decision.

Headlines You Need To Know:

• Striking unions are impacting the economy

• Instacart prices IPO at $30 a share

• MBAs are spurning Mckinsey to buy smaller companies

• China Evergrande shares sink 25% after wealth unit staff detained

• Americans can barely afford to buy homes

• Biden pushing for more Ukraine aid

• The Fed isn’t getting the economy that they expected

• Trump is skipping GOP debate to woo striking union members

• Corporations are picking sides in the new era of economic upheaval

• China VCs have a big problem

Just for fun…

The Millionaire Janitor

A 92 year old man secretly amassed a multi-million dollar fortune by investing in the stock market. The craziest part? He was a school janitor for 27 years. Ronald Read was born in 1921 in Vermont, and he was determined to be the first person in his family to graduate highschool. He walked and hitchhiked 10 miles everyday to school everyday until he graduated. Upon Graduation, he joined the Army. After returning from the war in 1945, he worked almost 25 years at Haviland's service station. He decided that he didn’t like working at the service station, quit, and served the remainder of his working years working as a Janitor. All the while, he was secretly earning millions. His friends and family were shocked when they found out he was a multi-millionaire. How did he amass this great fortune on such a low salary? He kept a frugal lifestyle while investing the rest of the money. It was his investment strategy that was simple but brilliant. He understood a thing or two about investing but didn’t make it complex. He was a avid reader of The Wallstreet Journal, but he never let the headlines persuade him. He focused on buying quality companies that he knew and understood. He followed the timeless advice of Warren Buffett: “If they buy good companies, buy them over time, they're going to do fine years from now." What did he do with all his money when he died? Upon his death, he donated $2 million to his stepchildren and friends, $1.2 million to local library Library and $4.8 million to local Hospital.

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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.