Tidus | July 15th, 2024

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GOOD MORNING

Here's everything you need to know this week: The attempted assassination of former President Trump will likely dominate the week’s news cycle, and has already affected one area of the market. Bitcoin soared roughly 3% in the aftermath of Trump surviving the gunshot fired at him during a Pennsylvania rally, suggesting that many crypto traders are now banking on his reelection chances.

1. Rally Caps… On?

The U.S. stock market had itself a little party on Friday, with the S&P 500 climbing almost 70 points before something of a Summer Friday sell-off. The Dow also danced its way above the 40,000 mark for the second time ever, nearly breaking its own record to boot, ending the day just a hair shy of an all-time high. How the Trump assassination attempt will affect sentiment in pre-market trading should dominate financial punditry this morning, which is interesting because there are some other things to think about coming out before the opening bell.

2. Earnings, Earnings, Earnings

You might want to hit the Nespresso button instead of the snooze. A key week for Q2 earnings kicks off this morning with BlackRock and Goldman Sachs reporting before the opening bell. Based on what we saw from JPMorgan, Citi and Wells Fargo on Friday, top lines should look big and shiny in line with the expected 8.6% increase in earnings for S&P 500 companies compared to the same period last year, and a 4.7% rise in revenues. But margin pressures from those high rates might paint a more nuanced picture of Wall Street’s health. Bank of America and Morgan Stanley report Tuesday in case we still have questions.

3. The Book, It’s Beige

Anyone feeling Fed Chat withdrawal after last week’s Capitol Hill Powellpalooza and new CPI data can take some relief with Wednesday’s release of the Fed’s Beige Book. The closest thing we have to economic data being directed by Robert Altman, the Beige Book is a charming collection of vignettes from around the Fed’s different regions made to convey an on-the-ground view of the economy. The Beige Book is often used to predict recessions, but since no one believes in those anymore, get ready to parse what the financial health of a deli outside Memphis means for a September rate cut.

4. Tesla’s Low Bar

Set your autopilot to "hyperspeculate" because Tesla reports its earnings on Wednesday, meaning Elon Musk is about to put on his top hat, grab his whip, and turn on the spotlight to host the EV maker’s quarterly circus. Wall Street is expecting to be underwhelmed with a consensus estimate of $0.61 a share, significantly lower than the $0.91 it posted in Q2 23. If Tesla misses that low bar, Elon can remind people that it’s an AI company now or pivot to his official endorsement of Trump in the aftermath of Saturday’s shooting. Regardless, it’s going to be… something.

Political and Market Sentiment

Even by our recent standards, things are utterly unhinged out there. The political aftermath of Saturday’s shooting is a partisan garbage fire, and Democrats are now under incredible pressure to replace President Biden on the ticket as Trump’s survival has sent his election odds skyrocketing.

Global Markets Overview

Europe: European stocks locked in their second straight week of gains, all juiced up on a seasonal cocktail of peppy earnings reports, a sweet hint of global investor sugar high, and gin we assume? The pan-European STOXX 600 closed up nearly 0.9% while the eurozone blue-chip barometer, the STOXX 50 leaped 1.3% indicating that Europeans are anticipating a Fed rate cut.

Asia: 40 Chinese banks failed and disappeared in one week. The Shanghai Composite Index was up 0.03% at 2,971.30, while the blue chip CSI 300 added 1.2%. We know that those two sentences don’t look right together yet both things are true.  

The Week Ahead

We’re never this terse, but: Just buckle up.

Let’s dive into more detail below.

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EVS

Lucid Motors Sees Bright Future with Saudi Arabia’s “Perfect Partnership”

With Saudi Arabia’s investment past and future investments, Lucid has been hitting new delivery records, eyeing further expansion side by side Saudi Arabia’s Vision 2030

BREAKING NEWS
Lucid EV Autos CEO Peter Rawlinson appears to be enjoying the $6.4 billion backing of Sobia Kool-Aid, a popular Saudi Arabia-backed fund Public Investment Fund (PIF) is pouring him.

In a recent Bloomberg TV interview, Mr. Rawlinson focused on back-to-back record-breaking deliveries and said things for the Silicon Valley company were “looking up.” Returning to PIF, Rawlinson said, “They are the perfect long-term partners with a long-term vision, mutually incentivized for success. They want this as much as I do.”

Damn, Peter…pass the Sobia over here!

WHAT HAPPENED
PIF has already invested $6.4 billion in Lucid; another check is likely coming. Hence, Mr. Rawlinson has good reason to be excited about being the “cornerstone” of PIF’s and Saudi Arabia’s Vision 2030.

As of June 2024, PIF had an estimated $925 billion in assets under management (AUM), with conservative goals of hitting $1 trillion by 2025. Looking further ahead, according to a report by Global SWF, PIF is projected to have $2 trillion in assets under management by 2030. This growth would propel PIF from fifth to second place globally among sovereign wealth funds.

After finishing Rawlison’s balcony scene for Saudi Arabia, the word “perfect” stood out. Why? For one, Saudi Arabia is the 3rd largest oil producer in the world, behind the United States and Russia, producing almost 10 million barrels per day in 2023 alone, possessing practically 20% of the world's reserves. The Public Investment Fund’s enthusiasm for Lucid, on paper and video, appears to be more about controlling someone like Mr. Rawlinson, who will toe the line rather than say an Elon Musk (in 2018, Musk wrote that he was “deeply offended” after a deal with Yasir Al-Rumayyan, governor of the fund, went sour).

Some context: Lucid specializes in range-efficient EVs that can add up to 300 miles of range in just 20 minutes when using 350 kW fast-charging stations. They also design and manufacture key components in-house, including the electric motors, battery packs, and software. This allows for greater control over quality and performance, and funds like PIF and Saudi Arabia likely love circling back to their Vision 2030.

As Al-Rumayyan told Elon Musk back in 2018, “It takes two to tango,” it looks like Mr. Rawlinson is stepping onto the dance floor as the new partner.

CONTINUE READING ➔

POLITICAL TRADING

Senator Mullin’s Stock Trade with Parker-Hannifin Highlights Military Ties

Senator Mullin’s defense contractor investment coincides with his ongoing push for Air Force advancements, modernization, and NDAA support

BREAKING NEWS
U.S. Senator Markwayne Mullin (R-OK) is relatively new on Capitol Hill. He became active in 2013 when he was elected to the U.S. House of Representatives and served in the House from 2013 to 2023 before being elected to the U.S. Senate in 2022, taking office on January 3, 2023.

Mullin is a big supporter of the military and seems to ha U.S. Air Force, particularly enamored with Altus Air Force Base, home of Air Mobility, stating, "Altus produces the world's most inspired, proficient, and adaptive mobility warriors to deliver airpower for America."

It makes sense that Senator Markwayne Mullin sits on the Senate Armed Services Committee, as his recorded comments and actions indicate a strong focus on supporting and improving Air Force capabilities.

What doesn't make sense is why Mullin recently bought stock in Parker-Hannifin (PH), which has extensive business ties and relationships with the U.S. military, primarily through its Aerospace and Defense divisions.

WHAT HAPPENED
At Moby, our goal isn't to look like the next Anonymous, the infamous computer hackers who pledge to bring truth to light. Mullin's trade and thousands of others like it are all part of this public record organized succinctly on Quiver Quantitative.

The trade is not monumental, involving a purchase of $15,001-$50,000 worth of Parker-Hannifin Corporation common stock. In comparison, Nancy Pelosi recently acquired $1,000,001-$5,000,000 of Nvidia stock on June 26, along with a similar purchase of Broadcom. Let's be honest: no one can match Pelosi's scale.

Senator Mullin looks to be a trendsetter with this trader, seeing PH has not been touched on the Hill since Greg Stanton, the Democrat from Arizona, in September 2023. He then promptly sold a month later.

However, maybe "trendsetter" is the wrong word here.

CONTINUE READING ➔

Today's insights are provided by Tidus, a cutting-edge, secure, and user-centric decentralized wallet, meticulously designed to offer an intuitive experience for new comers and power users.

Learn More ➔