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The Macro Situation

exploitation of labor (noun)

• when laborers are paid less than what they produce;

• a classical Marxist diagnosis of capitalism;

• when the over-reliance on job market numbers comes back to bite you.

                                             ― New Entry in the Updated Devil’s Dictionary

Making decisions based on data is one thing. Making decisions based on data that eventually gets corrected is another thing. The labor market is definitely in its cooling phase, perhaps more than expected.

The Bureau of Labor Statistics released revised employment figures showing 818,000 fewer people were employed as of March than had been previously reported.

• Average monthly job gains from March 2023 to March 2024 were revised down to 174,000 from 242,000.

• Significant downward revisions were seen in IT and professional and financial services, with over half a million jobs revised out.

The Leading Economic Index, which looks at a variety of economic factors (e.g. average weekly hours for manufacturer workers and manufacturing volume for new orders), fell in July by 0.6%.

The LEI also declined in June by 0.2%. Over a 6-month period the LEI has declined by 2.1%. While this is not enough to indicate a recession, the expectation is that GDP will slow significantly.

After J. Powell’s speech on Friday, the expectation for rate cuts is 25bps in September and a total of 100bps by year’s end.

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 63.5% for 25bps and 36.5% for 50bps.

Up to the week ending on August 16, 2024, the ANFCI decreased to -0.48 from -0.45 the previous week, which still indicates a good financial climate for investment.

Core Assets Update

Gold (2548.70) reached a record high on the back of interest rate cut expectations and a weakening US dollar (100.67).

Crude Oil (74.96) suffered from the lingering slow demand from China despite the interest rate cut news on Friday.

The 10-year Treasury yield (3.795%) rose ahead of Powell’s speech as investors priced in the September rate cut. As sentiment steadied by the end of Friday, yields started to decline.

                                             -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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