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The Macro Situation

contraction (noun)

• a reduction;

• a reduction in business or economic activity;

• the omission of syllables to form a new word;

• the omission of labor when forming a new trough.

                                             ― New Entry in the Updated Devil’s Dictionary

All eyes are on the state of the jobs market, where the question is whether the recent numbers are indicating adjustments due to the pandemic or a wider economic slowdown.

• Jobless claims last week came in at 238,000 (more than the 233,00 predicted), which means the week-by-week numbers that are usually seen to be volatile are hovering near a yearly high.

• The ADP report revealed 150,000 private sector jobs were created in June, which was down from May’s 157,000 and the smallest gain in 5 months.

• The US Labor Department reported that 206,000 jobs were added in June (which includes government and non-farm payroll), yet unemployment rose slightly to 4.1%.

• April and May’s jobs numbers were revised down by 57,000 to 108,000 and by 54,000 to 218,000, respectively.

• Wage growth nears a 3-year low: 4.9% from the prior year, just down from 5% the previous month.

Does this mean an interest rate cut might happen soon?

According to the Fed Watch tool, which tracks the prices of various futures contracts related to interest rates (particularly the federal funds rate), the chance for a rate cut in September is 72.0%.

Up to the week ending on June 28, 2024, the ANFCI increased to -0.46, which is a significant shift from -0.53 the previous week. However, the climate is still relatively good for investment.

Core Assets Update

Gold (2401.00) prices are benefitting from the job market indications as well as the uncertainty over the U.S. election, where key economists believe a Trump victory will lead to an increase in inflation.

Crude Oil (83.20) prices rose this past week due to the summer season, a larger-than-expected decline in the U.S. stockpile, and tensions in the Middle East. However, by the close of the short trading week, prices took a hit with investors pondering the jobs data.

The 10-year Treasury yield (4.275%) was up in anticipation of the shortened week’s jobs numbers; and when those numbers came out, the yield dropped more than 6 basis points as investors adjusted to the idea that the economy may be slowing.

                                             -Todd Mei, PhD and Sebastian Purcell, PhD

AI Sentiment Report

The following sentiment scores use AI to track sectors as leading indicators. (Lesson 4 of The Art of The Bubble covers the selection of lead indicators for bubble trades). The scores are most indicative for the next day of trading (a Monday), but they appear to set the general tone for the next week.

-The Research Team:

                     Dom Viera, Samantha Russell, Nicole Zinuhova, Michelle Milan

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DISCLAIMERS

This newsletter is provided for educational and entertainment purposes only. Robin Technologies and Analytics LLC is the firm that distributes The Art of The Bubble products. The firm does not provide individually tailored investment advice and does not take a subscriber’s or anyone’s personal circumstances into consideration when discussing investments; nor is Robin Technologies and Analytics LLC registered as an investment adviser or broker-dealer in any jurisdiction.

You should expect no financial returns one way or another based on the statements contained herein. These points hold equally for any statements that could be attributed to The Art of The Bubble, 1.2 Labs, or any related business entities or personnel operating in association with Robin Technologies and Analytics LLC. If you decide to buy or invest in anything, then your returns and potential losses are your own. No statements about taxation are taxable advice and you are encouraged to consult your own tax professional. No statements about laws are legal advice and you are encouraged to consult your own professional legal counsel. You are finally also encouraged to do your own due diligence before investing in anything consulting with appropriate professionals as needed.

Benchmarks and Data Sources

All data not otherwise specified (or obvious from context) is taken from TradingView.com.

The cryptocurrency benchmark used is an equally weighted mix of BTC and ETH. While the benchmark for stocks used is the Nasdaq 100.

Conflicts of Interest

All contributors to this newsletter should be considered active investors. Because the strategies pursued are often quick, contributors may or may not own the stocks or coins discussed by the time of reading. However, readers should assume that any coins, stocks, or other items discussed are owned by the contributors for conflict of interest purposes.

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