MAKER'S MARKET DOSSIER

Issue #5: 12.8.2024

Originally published at The Leading Indicator blog.

❤️🫦AMUSE BOUCHE …**

Sunday 12.8.2024 – 11.48 GMT

Work continues on the back-end to optimize the work flow needed to produce this DOSSIER on a regular basis, with promising results. Read on, judge for yourself, and leave your feedback or questions. This late Sunday edition is perfect way to begin Week 50 of 2024. It covers events over the last several days in order to better speculate over the next couple of months.

As if that’s not enough, the word of the week is: Fire Sale …

📉 MARKET MOOD

🌏 APAC stocks were mixed with some cautiousness in the region after the weak lead from Wall St and ahead of the key US jobs data. It was one of those mornings where the market’s pulse felt like a 3 a.m. poker game: exhausted, tense, and unsure whether to fold or double down. APAC stocks, mixed like a tray of leftover cocktails, are nursing Wall Street’s overnight hangover.

🌍 European equity futures indicate a negative cash open with the Euro Stoxx 50 future ▼0.3% after the cash market closed ▲0.7% on Thursday. European equity markets saw a Thursday sugar high—Euro Stoxx 50 popped 0.7%—but futures the next morning suggest reality was back on the menu, down 0.3%. It’s as if the algos suddenly remembered Europe is running on central-bank fumes and wishful thinking.

🌎 US stocks were choppy and ultimately lower. The Russell 2000 couldn’t catch a bid and just stumbled into its fourth losing week in five. Sector Rotation was like musical chairs at a funeral. Energy and Consumer Discretionary smiled like they knew something we didn’t, but Materials and Industrials face-planted into the punch bowl. Jobs Data was the big elephant waiting to stomp through the room, and traders were hedged like overleveraged poker players with a busted flush.

You’re better off buying volatility than certainty.

📰 NOTABLE HEADLINES

• 🍊 US President-elect Trump named David Sacks as the “White House A.I. & Crypto Czar.”
• 🏦 RBI maintained the Repurchase Rate at 6.50% as expected, with 4 out of 6 voting in favor of a hold and unanimous support for the policy stance.
• 🇰🇷 South Korean ruling party leader Han called for President Yoon‘s suspension, accusing him of ordering arrests of prominent politicians as “anti-state forces.”
• 🇹🇼 Taiwan’s President Lai urged 🇨🇳 China to avoid unilateral actions and return to a rules-based order. Lai emphasized the need for stronger defense and stated peace is priceless but not guaranteed, urging Taiwan to remain vigilant.
• 🇨🇳 China may let provinces approve special bond projects according to Caixin news.
• 🇫🇷 French Socialists expressed willingness to work with a Macronist or Republican Prime Minister if “reciprocal concessions” are made, according to Politics Global.
• 🇸🇪 Riksbank’s Seim said if the economic and inflation outlook remains unchanged, policy rates may be cut again in December and again in H1 2025.

UnitedHealth Group CEO Brian Thompson’s assassination hit like a thunderclap, shaking confidence in an industry already under fire for claim denials and opaque billing practices. UnitedHealth stock initially rose 2.9%, fueled by market confidence in the company’s operational resilience, but the glow didn’t last. Shares plunged 5.2% to $549.62. Renewed public outrage over claim denials has reignited debates over systemic reforms. CVS Health quietly removed executive photos from its website, highlighting fears of targeted attacks on leadership.

But don’t take everything you read to heart, after all, for your humble tender of the bar here is no better than FinBERT … or is he?

💨 TRADE WINDS

🌏 ASIA –

China is prepping for its Central Economic Work Conference, where policymakers will presumably whisper sweet stimulus nothings to an economy that’s lost its swagger. The real game, however, is in the electric vehicle (EV) arms race. Chinese manufacturers are eating Volkswagen’s lunch—and its dessert—forcing Europe into defensive tariff measures. Volkswagen’s crumbling market share in its former Chinese stronghold highlights how quickly global automakers are losing ground in EVs. The dragon’s playing offense while everyone else is stuck on defense.

Meanwhile, Japan is throwing the markets a curveball. Household Spending came in strong, stoking chatter that the Bank of Japan might finally tweak its ultra-dovish stance. But don’t pop the sake yet—mixed signals from inflation data suggest BOJ Governor Ueda might still cling to his yield-curve control fetish for a while longer.

🌍 EUROPE –

Germany is in crisis mode, and Volkswagen is the poster child. The automaker is contemplating factory closures and 10% pay cuts, which has tens of thousands of workers in full revolt. This isn’t just a VW problem—it’s emblematic of Germany’s rough pivot to EVs and a broader industrial slowdown. Expect this saga to keep weighing on the DAX, German GDP forecasts, and the region’s labor market.

Over in France, Macron is shaking up the chessboard by searching for a new Prime Minister. This political churn is spooking investors in French banks and luxury stocks. If Macron’s choice can’t stabilize markets or his parliamentary alliances, expect volatility to spike in Paris.

🌎 AMERICAS –

The U.S. labor market continues to be a riddle wrapped in a mystery. November’s job creation blew past expectations at 227,000, but the unemployment rate ticked up to 4.2%. This has the market almost certain (91% probability) that the Fed will cut rates in December. Still, not everyone at the Fed is ready to pivot into full dovish mode—Michelle Bowman and Austan Goolsbee are out here slow-walking expectations for 2025 rate cuts.

Meanwhile, Wells Fargo and Fiserv are delivering some corporate carnage, with layoffs announced in finance and tech. That’s worth watching: are these one-off restructuring moves, or is corporate America starting to tighten its belt ahead of an expected economic slowdown?

🇧🇷🇷🇺🇮🇳🇨🇳🇿🇦 BRICS News Flow

India’s RBI pulled a classic central banker fake-out, holding its repurchase rate steady at 6.50% but surprising the market with a 50bps cut to the Cash Reserve Ratio. That’s INR 1.16 trillion injected into the economy, folks. The message? Growth’s getting dicey, and we’re not about to sit on our hands.

“From Russia With Lavrov”: Talk of U.S. cooperation for “global stability” is in the air. In Syria, the chessboard has left the table.

🇺🇸🇬🇧🇨🇦🇫🇷🇩🇪🇮🇹🇯🇵 𝑮𝟕 News Flow

The G7 news cycle is still dominated by Volkswagen’s dumpster fire, with worker protests and talk of plant closures threatening Germany’s economic engine. Meanwhile, Japan’s household spending rebound is clashing with inflation concerns, leaving the BOJ stuck in its usual twilight zone.

The U.S. dollar continues to flex ahead of next week’s inflation report. A strong CPI print could force the Fed to pump the brakes on rate cuts—watch this space, because the dollar’s strength is one of the key levers squeezing emerging markets and commodity prices worldwide.

Volkswagen’s crisis could have ripple effects throughout the European economy. The company needs to save €17 billion to stabilize its business. The auto sector accounts for about 17% of Germany’s GDP. The company lacks an electric equivalent to its popular “People’s Car”. Other German automakers may face similar challenges in the EV transition. Demand for EVs is lower than anticipated.

Had enough? If not, then sample a hand-crafted STIFF SHOT of Volkswagen AG.

⛯ SECTOR SPOTLIGHT

Tech is in beast mode. AI is eating budgets alive, Nvidia is up 179% YTD, and the S&P 500 Info Tech Index is smashing highs.

The AI sector is thriving as enterprise budgets pour into cloud computing, generative AI, and cybersecurity. Companies like Nvidia, Palantir, and Fair Isaac are leading, but scrutiny is mounting. Ethical AI concerns and geopolitical tensions, particularly in semiconductors, are looming risks.

Enter David Sacks , freshly anointed as Trump’s “AI & Crypto Czar,” to steer the chaos—or accelerate it. 🍊 Orange Julius’ other major financial nominees for his nascent inbound regime include Scott Bessent and Paul Atkins.

Known for his Silicon Valley pedigree and obsession with Solana, Sacks embodies the tech-is-everything philosophy. He will likely institute deregulation, federal AI R&D funding, and a crypto policy intended lure capital back into U.S. markets.

On the crypto side, Sacks is a longtime Solana fanboy, so his policies could favor low-cost, high-speed chains, conflict-of-interest questions notwithstanding. His mantra? Innovate first, regulate later—if at all.

XRP is finally having its 60 Minutes Moment … will it Ripple or Cripple?

In crypto, big media moments are like tightropes over shark tanks: dazzling until someone slips. Elon Musk’s infamous SNL appearance in 2021 taught retail investors this the hard way when Dogecoin cratered 75% against Bitcoin after he called it “a hustle.”

Brad Garlinghouse will finally have his day in the Court of Public Opinion, as XRP rides a 400% post-Election rally. Will XRP sell the news—or rewrite the Dogecoin disaster script? Dogecoin hit 70 cents pre-SNL, a pump driven entirely by Musk hype and Reddit degenerates. Then, mid-monologue, reality struck. The price plummeted to 50 cents during the show, bottoming at 43 cents hours later. XRP’s setup is fundamentally different.

For one, XRP actually does something.

More importantly, Ripple’s semi-victory over the SEC has created a rally with actual legs, fueled by optimism that its native token might lead the charge in crypto’s regulatory future. XRP isn’t Dogecoin—it has fundamentals, utility, and a legitimacy on its side. But it’s still crypto, and that means volatility is baked into the cake. If Garlinghouse delivers a hit, we could see $3+ and another round of retail FOMO. If he flops? Well, we’ve seen this movie before—cue the “sell the news” collapse.

🎲 RISK RADAR

🇸🇪 Sweden’s Riksbank hinted at rate cuts as soon as December, with another round possibly coming in H1 2025. Inflation’s not dead, but growth is slowing, and Riskbank … er, Riksbank seems ready to gamble on early cuts to keep the wheels spinning. FOREX traders are eyeing the krona for weakness. If Sweden goes all-in on cuts while the rest of the world holds firm, expect capital to run for the exits.

As if on cue, Warren Buffett is pulling billions out of banks faster than you can say “unrealized losses”, dumping $10 billion worth of Bank of America stock since July, and slashing its stake below 10%. This isn’t a one-off: Ray Dalio and other financial titans are ditching bank stocks en masse.

Berkshire Hathaway has been methodically exiting Wells Fargo, JPMorgan, Goldman Sachs, and U.S. Bancorp since 2020. Buffett knows the score. This isn’t just about BofA—this is systemic. The $385 billion in the FDIC’s insurance fund isn’t enough to cover $513 billion in potential losses. You do the math.

Why? Because U.S. banks are sitting on $513 billion in unrealized losses, thanks to the Fed’s rate hikes.

Banks like BofA bought long-term, low-yield bonds during the pandemic, assuming rates would stay near zero forever. Spoiler alert: they didn’t. Now, those bonds are underwater, and banks can’t afford to sell them without wrecking their balance sheets. BofA is offering depositors pathetic 0.01%-0.04% interest, praying they won’t notice Treasury bills yielding 4%-5%.

In a world of instant withdrawals, it only takes a few taps on a smartphone to trigger a bank run.

Meanwhile, Wells Fargo and Fiserv are delivering some corporate carnage, with layoffs announced in finance and tech. Is corporate America finally starting to tighten its belt ahead of an expected (i.e. planned) “financial pandemic”?

Had enough? If not, then read the pre-Halloween spook-fest Ghost in the System from 9.1.2024, or watch the music video version, for more on Wells Fargo.

👀 WATCHLISTS

Except for crypto, these are the closing prices of the New York Session for Friday 12.6.2024 (21:00 GMT).

Don’t put your money up on the wood unless you double check your digits, ‘cuz the barkeep is no better than FinBERT between sips … or is he?

Commodities

Metals

Anticipated Federal Reserve rate cuts boost precious metals. China’s economic stimulus measures create supply deficits in copper amid increasing global consumption, supporting prices.

• 🥇 Gold (GC1!) : 2,633.77 per oz ▼ (-0.64%). Fed rate cut expectations, geopolitical tensions, and strong central bank buying continue to support gold prices.
• 🥈 Silver (SI1!) : 31.36 per oz ▲ (+0.08%). Increased industrial demand, especially in renewable energy and electric vehicle sectors, driving silver prices to 12-year highs.
• 🥉 Copper (HG1!) : 4.3430 per lb ▶︎ (N/A). Strong demand from energy transition sectors and potential supply constraints supporting prices.
• 🥇/🥈 Gold-Silver Ratio : 83.99 ▼ (-0.72%). Silver slightly outperforming gold, narrowing the ratio.
• 🥇/🥉 Gold-Copper Ratio : Reflects relative stability between gold and copper prices.

Energy

OPEC+ production cuts tighten supply. Ongoing tensions in the Middle East supporting oil prices. Seasonal factors influence natural gas prices.

• 🛢️ Crude Oil (WTI) : 69.43 per bbl ▲ (+0.91%). Mideast tensions and OPEC+ output cuts supporting prices, but concerns over global demand growth persist.
• 🛢️ Brent Crude (BRN) : Brent Crude (BRN) : 72.97 per bbl ▲ (+0.39%). Geopolitical risks in the Middle East adding a premium, balanced against slower demand growth expectations.
• 𐂕 Natural Gas (NG1!) : 2.24 per MMBtu ▶︎ (0.00%). Prices stable amid balanced supply-demand dynamics, with potential for seasonal uptick in September.
• ⛽ Gasoline (RBOB) : 1.94 per gal ▲ (+1.04%). Rising on crude oil gains and expectations of steady demand, despite long-term shift towards EVs
• ♣️ Coal (API2) : 93.00 per ton ▼ (-1.06%). European coal prices under pressure due to mild winter and competition from natural gas
• ⛢ Uranium (UX2!) : Pending …

A free, real-time version of the MAKER’S MARKET DOSSIER WATCHLIST is available via Tradingview, along with the author’s published chart-based IDEAS.

Indices

🌏 The Asian Session

Asian markets showed mixed performance, reflecting regional economic dynamics and global market sentiment. The ongoing US-China tech tensions, particularly in the semiconductor industry, continue to impact Asian tech stocks. Expected interest rate cuts by the US Federal Reserve influence market movements across the region.

🇦🇺 ASX 200 : 8,495.20 ▲ (+0.56%). Strong performance in financials and materials sectors driving gains. 🇯🇵 Nikkei 225 : 39,277.96 ▼ (-0.27%). Slight retreat after hitting three-week high, with tech stocks facing pressure. 🇰🇷 KOSPI : 2,498.54 ▲ (+1.80%). Robust recovery following political turbulence, led by semiconductor and auto stocks. 🇨🇳 Shanghai Composite : 3,370.74 ▲ (+0.20%). Modest gains despite US tech export restrictions, with consumer stocks providing support. 🇭🇰 Hang Seng : 19,742.46 ▼ (-0.02%). Marginal decline as tech and financial stocks struggle amid global uncertainties. 🇮🇳 Nifty 50 : 24,457.15 ▲ (+0.75%). Continued rally to new all-time highs, driven by strong economic data and foreign investment inflows. 🇹🇼 Taiwan Weighted : Pending … 🇸🇬 STI : Pending … 🇲🇾 FTSE Bursa Malaysia : Pending … 🇮🇩 Jakarta Composite Index : Pending …

🌍 The European Session

European markets reflecting regional economic dynamics and global market sentiment. The ongoing political turmoil in France, particularly the no-confidence vote against Prime Minister Michel Barnier’s government, is creating uncertainty in the region. Despite this, the CAC 40 outperformed other major European indices, driven by strong performances in luxury and industrial sectors.

🇫🇷 CAC 40 : 7,427.00 ▲ (+1.31%). Strong performance in luxury and industrial stocks, with LVMH and Hermès gaining on positive HSBC forecast for 2025 luxury rebound 🇩🇪 DAX 30 : 20,385.00 ▲ (+0.13%). Slight gains amid cautious trading, with investors balancing global economic concerns and domestic industrial performance 🇬🇧 FTSE 100 : 8,309.00 ▼ (-0.49%). Decline led by Frasers Group and utilities, offset by gains in B&M and JD Sports; Aviva’s acquisition of Direct Line influencing market sentiment. 🇪🇺 Euro Stoxx 50 : Pending …

🌎 The American Session

The S&P 500 and Nasdaq Composite reached new all-time highs, driven by strong performances in technology and AI-related stocks. Canadian markets edged higher, with the TSX Composite Index benefiting from strength in energy and materials sectors. The Bovespa index showed significant gains, supported by rising commodity prices and ongoing economic reforms. The Mexican IPC, however, experienced a slight decline amid regional economic uncertainties.

🇺🇸 S&P 500 : 6,032.38 ▲ (+0.54%). Strong tech sector performance and positive economic indicators driving index to new record highs 🇺🇸 NYSE Composite Index : 20,107.80 ▼ (-0.25%). Slight decline despite overall market optimism, with mixed performance across sectors 🇺🇸 Dow Jones Industrial Average (DJIA) : 42,352.75 ▲ (+0.25%). Modest gains led by industrial and financial stocks, reflecting broader economic confidence 🇺🇸 Dow Jones Transportation Average (DJTA) : 🇺🇸 Nasdaq Composite Index : 19,700.72 ▲ (+1.53%). Tech-heavy index outperforms broader market, driven by AI and semiconductor stocks 🇺🇸 Russell 2000 : Small-cap stocks showing resilience, benefiting from domestic economic strength 🇨🇦 TSX Composite Index : 25,680.04 ▲ (+0.15%). Canadian benchmark index edges higher, supported by gains in energy and materials sectors 🇨🇦 TSX 60 Index : Pending … 🇲🇽 IPC : 52,819.58 ▼ (-0.21%). Mexican stock market shows slight decline amid regional economic uncertainties 🇦🇷 MERVAL : Pending … 🇧🇷 Bovespa : 130,615.00 ▲ (+1.52%). Brazilian index continues its upward trajectory, buoyed by commodity prices and ongoing economic reforms

A free, real-time version of the MAKER’S MARKET DOSSIER WATCHLIST is available via Tradingview, along with the author’s published chart-based IDEAS.

U.S. Stocks Watchlist

• American Airlines Group (AAL) : $17.39 ▼ (-0.06%)
• Apple (AAPL) : $243.71 ▲ (+0.28%)
• Amazon (AMZN) : $227.03 ▲ (+2.94%)
• Bank of America (BAC) : $46.75 ▲ (+0.02%)
• Ford Motor Co. (F) : Pending …
• Intel (INTC) : $20.92 ▲ (+0.58%)
• Marathon Digital Holdings (MARA) : $26.43 ▲ (+6.62%)
• NVIDIA (NVDA) : $142.44 ▼ (-1.81%)
• Tesla (TSLA) : $369.39 ▼ (-2.07%)
• Warner Bros. Discovery (WBD) : Pending …

A free, real-time version of the MAKER’S MARKET DOSSIER WATCHLIST is available via Tradingview, along with the author’s published chart-based IDEAS.

🛡️ Bond Markets

🌏 ASIAN

• 🇯🇵 Japan 10-Year JGB Yield : ▲ 1.08 (+0.004%)

🌍 EUROPEAN

• 🇬🇧 Gilt 10-Year Yield :
• 🇫🇷 OAT 10-Year Yield : ▼ 2.88 (-0.011%)
• 🇩🇪 Bund 10 10-Year Yield : ▲ 2.27 (+0.01%)
• OAT-Bund Spread : 0.61%

🌍 AMERICAN

• 🇺🇸 US 2-Year Yield : ▼ 4.11 (-0.013%)
• 🇺🇸 US 10-Year Yield : ▼ 4.17 (-0.010%)
• 🇺🇸 US 30-Year Yield : ▼ 4.34 (-0.020%)
• 🇺🇸 US 2Y-10Y Spread : 0.06%

A free, real-time version of the MAKER’S MARKET DOSSIER WATCHLIST is available via Tradingview, along with the author’s published chart-based IDEAS.

Cryptocurrencies

For a deeper dive into any of these various crypto projects, follow the individual links and/or consult the Technical Speculator’s Dictionary.

• ₿ Bitcoin (BTC) : $101,306.37 ▲ (+1.38%)
• Ξ Ethereum (ETH) : $4,008.47 ▲ (+0.21%)
• 🅇 XRP (XRP) : $2.6068 ▼ (+0.20%)
• 🄷 Hedera Hashgraph (HBAR) : $0.33199 ▼ (-0.15%)
• 🄰 Algorand (ALGO) : $0.4980 ▼ (-2.30%)
• ⛓️ Chainlink (LINK) : $26.114 ▲ (+5.25%)
• 🟣 Polkadot (DOT) : $10.425 ▼ (-1.65%)
• ⚡️ Amp Token (AMP) : $0.01191 ▲ (+10.89%)
• 🎷 JasmyCoin (JASMY) : $0.0505 ▲ (+2.60%)

Prices as of 12.8.2024 – 23.57:18 GMT

A free, real-time version of the MAKER’S MARKET DOSSIER WATCHLIST is available via Tradingview, along with the author’s published chart-based IDEAS.

🔮 The Payoff: Tomorrow’s News, Today

🏆 Congratulations on making it this far.

Next week, barring the unforeseeable, the Technical Speculator will be serving fresher samples of Wells Fargo, Fiserv and other job loss anomalies.

While chopping Chinese Bonds into tapas, he hopes to capture the changing scoreboard fast enough for you appreciate its undertones.

If there’s time, he will even get a deep whiff of the LNG market and let you know how odorless it is, or isn’t.

🌊 Be Liquid …

© adrian dyer 2024

CAVEAT EMPTOR

This is NOT financial advice. The intention here is to learn from Real-World capital flow how to recognize, measure and profit from the price action of various asset classes in these tense times. Only YOU can select a strategy that suits your temperament, your tolerance for risk and your time horizon, such that no content for public consumption will coincide with your strategy exactly … assuming that you have a strategy. Participation in financial asset markets is intrinsically risky; long-term profitable navigators agree that you should never risk more buying power than you are willing and able to lose. Also, beware of fraudulent actors. Since counter-party risk is real, strive to learn from your mistakes and others’. Finally and most importantly, what others feel, you will feel, ergo study your emotions, but do not trust them or obey them.