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Good Morning Everyone!
The U.S economy shrank for a second straight quarter. This officially means we are in a recession. Remember when things feel the worse the potential investment returns are usually the best.
Also…time’s running out…
U.S. Q2 GDP down 0.9% after a 1.6% decline in Q1
There is no consensus on what a recession means
What we know is the economy is slowing
75 basis point hike by Powell yesterday (2nd straight month of +75).
So far, Powell is Volcker.
S&P 500 (+2.6%) and Nasdaq (+4.1%) both rose when Powell said:
"2.25%-2.5% Fed Funds rate is now in the range of neutral", implying hikes will eventually slow
Last guidance in June was for the rate to hit 3.25%-3.5%
There are 3 more Fed meetings this year, implying no more 75-point hikes:
Before Fed Meeting After Fed Meeting
Sept meeting +60 basis points +50 basis points
Nov. meeting +40 +25 basis points
Dec. meeting +20 +25 basis points
Balance Sheet reduction
Up to now Fed has been tapering
In September, reduction program will be running at full strength
It will take 2-2.5 years to get back to equilibrium
Crude 99 +2% Powell read-through positive for oil
Manchin & Schumer agree on a much smaller spending deal
Will Senator Sinema approve?
Generate $739 billion in revenue
Spend $433 billion
Includes $370 billion for Energy Security and Climate change
Reduce deficit by $300 billion over a decade
Revenue would come from a 15% corporate minimum tax, price cuts for Medicare and boosting tax enforcement
Reality is this will be the last chance to get something done before the mid-terms
Meta -4% after being up 7% going into the print
Reported in-line with buy-side estimates
Management calls out a "weak advertising demand environment" which is similar to what we heard from Google
3.6 billion monthy users across platforms (FB blue, Instagram, Messenger, What's App)
Q2 ad revenue grew +2% ahead of 0% expected (
Much of the weakness in the quarter was in Europe whereas U.S. quarter-over-quarter was up 6%, Asia +3% and RoW +7%
Specifically : Guided Q3 revenue flattish on a constant currency basis vs. street range of -4% to +4%
Q3 Guide: Revenues $26-$28.5 billion
As expected, META cut operating expense guidance to $85-88 billion vs. prior $87-92 billion
People wanted a larger cut and this is one of the reasons I think the stock is down modestly today
Repurchased $5 billion worth of stock vs. $9 billion last quarter vs. street at $8 billion (another reason stock is down)
Free Cash Flow was $4.5 billion , in-line with street
Cheap stock @ 17 times 2023 earnings and Reels monetization is running ahead of Stories at the same point in time
Zuck is not afraid of TikTok (not sure I buy it)
Sentiment is too negative given companies excellent track record of execution and user growth is positive
Buying Spirit for $3.8 billion
Creating the 5th largest U.S. airline
Qualcomm -4%, guide below street
ServiceNow -7%, guide below street
Lam +2%, beat
Ford flat, beat, ups dividend
Mastercard +1%, beat
New 43-101 Shows Nickels Best Kept Secret is 3-15x Cheaper Than Peers. Power Nickels recent 43-101 shows a resource with 4 million Tonnes of over 1.2% NiEQ. It has lots of infill opportunities and its best strike (Over 2% NiEQ) is about to be drilled. Check out the new presentation here*.
Cathie Wood dumped over 1.41 million shares (~$75M)
Ark was 3rd biggest shareholder
SEC is probing whether Coinbase offered unregistered securities to customers
New Web3 unicorn
Unstoppable Domains raised $65M at a $1 billion valuation
Sells NFT-based domains
Has registered +2.5 million crypto domain names to date
.crypto, .bitcoin, .nft, .blockchain, .dao, etc…
Generated +$80M in sales
Nasdaq & Bitcoin gap
Yesterday we noted BTC’s correlation coefficient with the Nasdaq (0.78)
BTC has a big gap to close:
MEME OF THE DAY
Trending Leaderboard – these are the top10 tickers trending on Reddit:
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