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May 5, 20234 min read

#AAPL beat ?.. / #KRE back to Covid lows.. / Wagner / MM Funds +$500bn in 2mos / NFP up next




  • AAPL earnings flashed as a ''beat'', clearly the yet again $90bn share buyback will help/matter greatly, but in reality few negative growth data on some products, falling sales and profits, relatively weak outlook too...investors are paying 27x, that is not cheap and AAPL is now Berkshire's largest holding making up 38.9% of the portfolio

  • Money-market funds have attracted $588 billion in new funds in the past 10 weeks, compared with $500 billion after Lehman's collapse. "Fed hiking cycles always break something," BofA's Michael Hartnett said. "This time the US regional banking system."

  • ECB's Lagarde: ''We are not pausing! We know we have more ground to cover!'' Markets price in two more 25bp rate increases >> nearly there like the FED, most likely two more hikes, around 4.0-4.25% terminal rate probably, unless inflation really much stickier than expected or banking stress really increases

  • Electric cars running out of charge as sales forecast downgraded

  • Switzerland’s House of Representatives this week passed a bill banning “too-big-to-fail” banks from handing out bonuses to top executives and certain managers

  • Regional Bank ETF #KRE : been sinking like a stone, massive build up of 'shorts', Fed 'HAS' to be creative to squeeze them, if she wants to.. the iindex is near Covid lows of March 2020, not for the fainthearted !

  • Leader of Russia's Wagner Group threatens to withdraw his troops from Ukrainian city of Bakhmut by Wednesday in row over ammunition supplies, other news confirming : Wagner Group founder Yevgeny Prigozhin said his fighters will pull out of the key eastern Ukraine battleground of Bakhmut on May 10, ripping a lack of support from Moscow that is dooming his troops “to a senseless death.”

  • WSJ-Energy shares made up about 14% of Berkshire Hathaway’s stock portfolio at the end of 2022, the highest share going back to at least 2000

  • Next Tuesday's NFIB Small Biz survey will be important given the regional bank developments over the last few weeks. The NFIB survey, like UMich Consumer Sentiment, is more sensitive to issues like price and credit while the Consumer Confidence survey leans toward jobs

  • PMorgan's Dimon to visit mainland China for first time in 4 years

 

Markets :

  • TBills madness continues in the U.S in the very short-term, 4week TBills cleared at 5.84%, some 260bps higher than 2weeks ago, these things happened during other debt ceiling issues in 2013, 2017 and prior standoffs, but those were around 40bps, not 265bps!

  • FED outlook, the more the FED hiked, the more the market priced in cuts in the future, unless this is 2008 crisis, 200bps is madness!

  • USDollar steadily softer, although today USDCHF found a decent bid (Wagner news?), helping EURCHF and GBPCHF with it

  • Crude few pct off yesterday's lows too, perhaps Biden replenishing his reserves, he should!

  • SPX500 holding just above the moving averages, 4040 kind of key area on weeklies

 



Regional banks in US continue slide as crisis deepens (msn.com) >>> FED and Co will have to become creative! some chatters about short selling ban, but nothing firmed up - too early IMHO, as it could actually make things worse in short-term, the creativity has to be around deposit guarantees!....anyone tempted? also note.. (shorts creating issues...)...U.S. federal and state officials are assessing whether "market manipulation" caused the recent volatility in banking shares, a source familiar with the matter said on Thursday, as the White House vowed to monitor "short-selling pressures on healthy banks." Reuters reporting >>> By the end of the current crisis in the U.S regionals.. JPM could control close to 20%+ of all US deposit...pretty insane...!!











Wishing you a lovely friday and coronation week-end!

Team PVM








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