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The Macro Situation

Deflation (noun)

• the process of losing or releasing a sustaining property, such as air, emotion, will, etc.;

• in economics, the reduction of prices;

• in economics, the toll inflation takes on consumer confidence.

                                             ― New Entry in the Updated Devil’s Dictionary

The Fed’s preferred measure of inflation, the core Personal Consumption Index (PCI), grew 2.6% year-on-year in June. June’s core PCI rose 0.2% compared to May. While it is a slight increase, experts believe it further supports the decision for the Fed to begin rate cuts in September.

In the meantime, Q2 GDP grew at an annualized rate of 2.8% while average hourly earnings increased 0.3% in June compared to May’s 0.4%.

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), estimates the chances of a rate cut in September are 87.7% for 25bps and 11.9% for 50bps.

Up to the week ending on July 19, 2024, the ANFCI decreased to -0.52 from -0.51 the previous week, indicating a good financial climate for investment.

Core Assets Update

Gold (2385.70) was down most of the week in anticipation of Friday’s PCI report. The favorable news for an interest rate cut saw gold prices rise Friday with the US dollar (104.33) steadying.

Crude Oil (76.44) dropped below the $80 largely due to concerns about Chinese demand. A surprise rate cut by The People’s Bank of China has experts worried that the Chinese economy is struggling.

The 10-year Treasury yield (4.193%) dropped 6bps after the CPI data matched investors’ expectations.

                                             -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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