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The Macro Situation

“The first cut is the deepest” (song title)

• a song written by Cat Stevens in 1967 about a person ruminating on lost love and whether they can love again;

• September 17-18, 2024.

                                             ― New Entry in the Updated Devil’s Dictionary

The first cut is the deepest,

Baby, I know the first cut is the deepest.

'Cause when it comes to being lucky, she's cursed

When it comes to loving me, she's worst

But when it comes to being loved, she's first.

                              ― J. Powell in the shower (in some possible world)

With inflation taming according to the Producer Price and Consumer Price Indices, all eyes are on the September Fed meeting when experts feel it’s not a question of “IF” the Fed will cut rates but one of “HOW MUCH”?

• The PPI, a measure of wholesale inflation, increased 0.1% in July to 2.2%, which was less than 0.2% forecast and a significant change from June’s 2.7%.

• The core PPI for July, excluding food and energy, was flat.

• The CPI rose 2.9%, which was the slowest since March 2021

• The core CPI for July, excluding food and energy, climbed 3.2% which was 0.2% more than in June.

• Consumer retail sales were up 1% in July, which was better than the 0.3% forecasted.

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 75.5% for 25bps and 24.5% for 50bps.

Up to the week ending on August 9, 2024, the ANFCI increased to -0.45 from -0.48 the previous week, which still indicates a good financial climate for investment.

Core Assets Update

Gold (2546.20) surged on weakening recession fears and the likelihood of a September rate cut. Meanwhile, the US dollar (102.40) correspondingly weakened.

Crude Oil (76.60) experienced a decline due to a 1% rise in US crude stockpiles and a temporary respite in Middle East tensions.

The 10-year Treasury yield (3.883%) recovered from a midweek spike following the positive consumer retail figures. By the end of the week, yields had dropped as investors considered easing inflation and the indications that the September rate cut is in the offing according to the Fed’s Alberto Musalem.

                                             -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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-The 1.2 Labs Team

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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