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The Macro Situation

silver lining (noun)

• a glimmer of hope amongst an otherwise grim situation;

• precious metals carry a depressed economy;

• positive lagging indicators that disappear when things catch up.

                                             ― New Entry in the Updated Devil’s Dictionary

Retail sales were flat in June due to falling gas prices and a cyberattack on auto dealers. The silver lining?

• Even with these setbacks, sales were flat when they had been forecast to decline 0.4%.

• Excluding gas prices and autos, retail sales rose 0.8% last month.

• Sales in April were revised higher.

• Philadelphia Fed’s factory gauge rose to 13.9 from 1.3 June, suggesting manufacturing may be recovering in the region.

• Fed Governor Waller stated Wednesday that the Fed is “getting closer” to interest rate cuts.

Signs the economy is weakening:

• Jobless claims rose last week by 20,000 to 243,000 due to hurricane Beryl. Despite the isolated impact of the hurricane on Texas residents, the Labor Department suggested that the overall trend is a loosening labor market.

• The Leading Economic Index* (LEI) decreased 0.2% in June to 101.1, following a revised 0.4% decline in May. Experts believe economic activity will likely lose momentum.

*The LEI measures indicators such as: average weekly hours in manufacturing, average weekly initial claims for unemployment insurance, manufacturers' new orders for consumer goods and materials, S&P 500 index of stock prices, interest rate spread (10-year Treasury bonds less federal funds rate), payroll employment, manufacturing and trade sales, and industrial production.

At the time of writing, 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 92.6%.

Up to the week ending on July 12, 2024, the ANFCI decreased to -0.51, which is a slight change from -0.48 the previous week. The climate is still relatively good for investment.

Core Assets Update

Gold (2402.80) has been facing downward pressure due to the likelihood of a September rate cut while the US dollar (104.37) recovered from a midweek low.

Crude Oil (80.25) remains above the $80 mark after receiving a temporary boost midweek due to a plunging US inventory. However, this was offset by worries over a decrease in Chinese demand.

The 10-year Treasury yield (4.242%) dropped midweek following the Fed’s comments about getting close to rate cut territory. By the close on Friday, yields had climbed as investors considered the duration of the easing cycle and a possible Trump presidency.

                                             -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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Below is a recent comparison of our top trading strategies relative to BTC and ETH since the beginning of the current market cycle.

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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.

Company policy prevents accepting any funds for the discussion of specific coins or stocks.

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