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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…

MARKET UPDATE

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

10yr    2.7%

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

JetBlue

• Buying Spirit for $3.8 billion

• Creating the 5th largest U.S. airline

Earnings

• Qualcomm        -4%, guide below street

• ServiceNow      -7%, guide below street

• Lam             +2%, beat

• Ford            flat, beat, ups dividend

• Honeywell

• Norfolk Southern

• O'Reilly

• Mastercard      +1%, beat

• Pfizer

• Thermo Fisher

• Merck

• Comcast

• Shell

• Linde

• Sanofi

Tonight 

• Apple

• Amazon

• Intel

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*.

CRYPTO UPDATE

sells

• 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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