Investaverse

BREAKING | After yesterday’s positive CPI, the Producer Price Index showed that wholesale inflation DECREASED by 0.5% in March.
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What Happened: The PPI simply measures how much the raw materials used by US manufacturers cost. It’s more of a leading indicator than the actual consumer price index. The fact that the PPI became deflationary this month is GIGANTIC, as it’s the first indication that prices are really going down.
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Current Status: The biggest driver bringing the PPI down was energy goods, which decreased 5.1% in March. If you take food and energy prices out of the PPI, prices for processed goods actually rose 0.1%. This puts figures much more in line with the actual CPI.
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​Why it matters: Sure, the market is popping on this news (the DJI gained over 200 points by midday), but this may be short-lived. Remember, the CPI and PPI measure prices from last month. And the biggest factor bringing these prices down was energy costs. With OPEC’s production cuts, gas and energy prices have been on the rise all of April. Next month’s CPI and PPI can throw us right back into bear territory, so enjoy this while it lasts.

BREAKING | Amazon has announced they are launching their own generative A.I. suite and LLM tools via their new Bedrock service.
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What Happened: Bedrock is a massive generative AI toolset coming to AWS clients. These AI tools will use tools developed by startups AI21, Anthropic, and Stability AI.
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Current Status: This means that AWS has its own large language model AI called Titan that will work with other models within the Bedrock tool suite. Based on the announcement, AWS is aiming for a more corporate angle, as Titan models can be customized by a company’s own data without that information being used publicly.
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Why it matters: Sure, Amazon is basically a month late to the AI race, but Bedrock looks like it will have a solid competitive advantage with the way AWS is focusing their rollout. The AI race is still in its very early stages. Gear up for way more news coming out of way more tech plays as the space gets very loud. Amazon stock popped over 3% by midday on the news.

Alibaba Group Holding Limited (BABA) provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally.

The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others.

What we are looking for: Since mid-March, BABA has performed well. We are now seeing a pullback into the zone where the 50-, 100-, and 200-day moving averages converge. This is major support and I would play this with a credit put spread using the $92 strike as support.

US equity futures and European stocks rose overnight as investors weighed the path of Fed interest-rate increases for the rest of 2023.

Minutes of the Fed’s March meeting signaled officials appear on track to extend their run of hikes when they meet next month, while staff advisers forecast a “mild recession” later this year.

Our Take: Economists see the most likely outcome as a quarter-point increase in May, followed by an extended pause.

But the language in the minutes, coupled with some officials’ comments and a still-uncertain outlook for the impact of credit tightening on the economy, point to a rate path that may not be fully settled.

BREAKING | The Ethereum network completed its massive Shanghai (or Shapella) upgrade yesterday and the price of Ethereum is up big.
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What Happened: Basically this Shanghai upgrade is one of the final steps of last year’s massive shift to a proof-of-stake model on Ethereum that will help the network scale and grow. Ever since that upgrade worked out, there’s been billions of dollars in staked eth locked on the network. The Shanghai upgrade (among a LOT of other things) would allow Ethereum stakers to withdraw their Eth from the network and sell it. That COULD have created a lot of sell pressure and catered the network.
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Current Status: Instead, very little of the Ethereum made available has been sold. This means the upgrade worked and people still believe in the value of their staked Ethereum, so a new wave of buy pressure is actually moving across Ethereum. Eth’s price managed to top $2,000 by midday but is wavering around that level.
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​Why it matters: This latest update is more proof that Ethereum can scale and survive in a more competitive crypto economy as bull sentiment creeps back into the broader economy. We’re nowhere near a bull run (yet) and any number of issues can nuke the whole industry (again). However, we really love to see the robustness of Ethereum in this bearish environment. These latest gains put Eth up over 67% year-to-date. Of course, Ethereum is still down 35% year-over-year, but who’s counting?

BREAKING | After huge moves made by the likes of Ford and GM–Hyundai has announced a massive $18.2 billion investment in their EV division.
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What Happened: Hyundai has been doing pretty well in the EV space, but clearly feels like they need to move faster in order to keep up. This investment will play out across the next 7 years.
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Current Status: Hyundai now aims to manufacture 1.51 million EVs by 2023, with 31 different EV models available by then. This marks a 40% increase in production over their current pace.
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​Why it matters: Hyundai is currently trying to keep up with massive investments made by Ford, GM and Tesla to stay competitive in the EV space. However, since Hyundai does not manufacture EVs in the US, they are missing out on huge tax breaks that American companies can take advantage of. Hyundai is currently lobbying to get the US manufacturing requirements removed from the IRA.

BREAKING | The Bank of America Institute put out a report that US credit and debit consumer spending has slowed down the most since February 2021. Consumer spending at BofA only increased 0.1% in March
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What Happened: BofA frequently puts out spending reports that beat broader US figures to market. This spending report is another strong sign of a slowing economy as we attempt to predict whether the Fed has landed us in a full-on recession or not.
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Current Status: Retail spending fell the hardest while spending on restaurants actually increased by about 4%. While overall spending is down, U.S. consumers are back to spending more on experiences than they are on stuff.
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​Why it matters: With the small panic that last week’s jobs reports caused, analysts are looking for every possible new data source to see the extent to which the U.S. economy is slowing. Spending hitting this level is a little concerning, but we don’t need to start freaking out until we see next month's consumer spending figures. We’re still at the very beginning of this moment of truth.

Applied Materials, Inc. engages in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries.

It operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits.

What we are looking for: Over the past two weeks, AMAT has tested the highs and the lows of its current range and seems to be stuck there for the time being. I would play this passively with a credit iron condor using the 124 strike as resistance and the 112 strike as support.

Wells Fargo issued a near-term bearish call on the U.S. stock market Tuesday, arguing that Wall Street should anticipate a market correction over the next 3-6 months.

The firm said the S&P 500 (SP500) could fall as far as 10% during that period, which would send the index to a level near 3,700 points. "We are maintaining our 2023 SPX price target of 4,200, but believe the risk/reward over the next six months is skewed to the downside," Wells Fargo said.

Our Take: "Over the next 3-6 months, we expect to see a 10% correction, with the SPX trading down to 3,700."

The rationale behind the call includes the Federal Reserve's aggressive tightening, potential liquidity problems brought on by the bank crisis, and concerns over consumers being increasingly more dependent on credit to sustain spending.

Eric Basmajian, leader of Investing Group 'EPB Macro Research', believes current data implies that a recession is underway or imminent. "Policy should be easing already, but the Fed is still raising rates targeting lagging economic indicators. Monetary policy has never been this opposed to the business cycle signals in the last 50 years."