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The Bank of England delivers surprise half-point rate hike to 5%, the highest in 15 years.

They say the risks to inflation are “skewed significantly to the upside”.

🏦 Jerome Powell will make his way back to Capitol Hill this morning for a second round of grilling in front of the House Financial Services Committee.

• Yesterday he defended the Fed’s decision to skip a rate hike last week as “prudent”.

• He also signaled that the pause was likely to be temporary.

• He compared the move to a driver slowing down after pulling off the highway to avoid missing their destination.

• “The process of getting inflation back down to 2% has a long way to go.”

🗣️ President Joe Biden called Xi Jinping a “dictator” at an event yesterday.

• Biden implied Xi was unaware that the US shot down an alleged Chinese spy balloon in February because he didn’t know it was there.

• Xi wasn’t happy about that, calling the comments a “provocation”.

• This comes just one day after US Secretary of State Blinken’s trip to China to ease tensions with the country.

🏘️ According to Redfin, there were fewer homes for sale in May than any other month…ever.

• The number of homes for sale in the US experienced its first decline since April 2022, falling 7.1% YoY in May.

• Compared to pre-pandemic levels (May 2019), there are 38.6% fewer homes for sale.

• Home prices are also declining by less: the median sale price was down 3.1% YoY in May compared to April’s 4.2% drop.

⚖️ The Federal Trade Commission (FTC) sued Amazon yesterday for “deceptive” practices and violating consumer protection laws.

• The regulator claims the company misled consumers into signing up for its Prime subscription program using “manipulative” tactics.

• It says it used “dark patterns” to steer users into enrolling without their consent and made it difficult for them to cancel.

• This is the third case brought on by the FTC against Amazon in the last month.

🤖 After a quiet year of “soul searching”, SoftBank’s Masayoshi Son is back and on the offensive.

• And it’s all thanks to ChatGPT: Son says the tool—which he has been using every day extensively—has revived his spirits and revitalized his passion for technology.

• As such, SoftBank is positioning itself to be at the forefront of the AI revolution.

• After nearly 3 years of asset sales and cash hoarding, the firm has more than $35 billion in cash to help get it there.

📉 Goldman strategist David Kostin offered 5 reasons why investors should hedge the S&P 500 today:

• Put-call skew shows investors are positioned upside.

• Narrow market rallies are typically followed by sharper drawdowns than normal (chart).

• Elevated equity valuations.

• The optimistic economic growth outlook is already priced in.

• Positioning is no longer a tailwind.

🛢️ US energy companies have cut domestic O&G drilling activity to the lowest since April 2022.

• Those cuts are expected to continue amid weak oil prices.

• Meanwhile, stockpiles of crude oil at the Cushing, OK storage hub have risen for 8 straight weeks.

• They are now at their highest level in 2 years.

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📊 Yesterday’s highlights:

 KB Home: $1.94 EPS (vs. $1.33 expected) ✅, $1.77 billion in sales (vs. $1.43B expected) ✅.

• The company improved demand in the quarter with net orders increasing 84% and cancellations improving on a sequential basis.

• Guided full-year revenue of $5.8 to $6.2 billion, above analysts’ estimates of $5.67 billion.

👀 What we’re watching today:

• Accenture

• Darden Restaurants

• FactSet Research

• Commercial Metals Company

• GMS Inc

• Methode Electronics

Full earnings here.

• Mortgage demand: Despite a 3rd straight drop in interest rates, weekly mortgage demand remained flat.

• BTFD: Retail investors bought a record $1.5 billion worth of single stocks in the week ending Tuesday.

• Uber cuts: Uber is laying off 200 recruiters which represent 35% of its recruiting team but just 1% of total staff.

• WFH: The number of work-from-home job openings is beginning to roll over.

• Pharma suit: A pharmaceutical trade group is suing the US government over Medicare drug price negotiation plans.

• Project S: TikTok is launching “Project S”, an online shopping initiative called Trendy Beat to compete with Shein and Amazon.

• Wall Street pay: Lawyers on Wall Street are now outearning investment bankers.

• Mopping up: A new Fed paper suggests the Federal Reserve and European Central Bank will mop up as much as 90% of the money they pumped into banks over the last decade.

• BTC options: Bitcoin options volume jumped to a 3-month high yesterday with $3.3 billion worth of contracts changing hands.

• Stablecoins: Jerome Powell said yesterday that stablecoins are a form of money and require robust federal regulation.

• Unusual defense: Coinbase employed an unusual legal strategy by filing amicus briefs in other crypto-related lawsuits to shape court rulings in its own case against the SEC.

• Mining ban: Venezuela’s temporary ban on crypto mining is having long-lasting effects on the country’s crypto industry.

• Bitcoin ETF: Valkyrie Funds is hopping on the spot Bitcoin ETF bandwagon with a new filing of its own.

Check out GritCRYPTO for more.

• Semis fab: Intel will sell a 20% stake in IMS Nanofabrication to Bain Capital at a $4.3 billion valuation.

• Retail IPO: Secondhand retailer Savers Value Village is seeking a $2.7 billion valuation for its US IPO.

• Canadian sports: Larry Tanenbaum is selling a portion of his stake in Maple Leaf Sports & Entertainment at a $8 billion valuation.

• SVB VC: SVB Financial Group is exploring options for its venture capital arm, SVB Capital.

• Private > public: There are more companies going private than there are companies going public this year.

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