Digital nightmare –

It’s Monday morning. This is the only certainty we can have at the end of July. The week ended lower in New York as Europe clung to the curtains and held on. On Friday, social media and digital advertising took their toll, suddenly marketing spending melted like snow in the sun, and SNAP led the way with dirty numbers for the second quarter in a row and comments that make you want to buy a plane ticket to hit. baseball bat control. But this nightmare trimester has consequences elsewhere, too.

Audio recording from July 25, 2022

Download the podcast


Since the advent of COVID, we have learned a lot about the concept of contagion. In addition to the fact that there we talked about the virus and that when we talk about finances, it is not enough to simply wash your hands with abricotin 8 times a day and wear a mask. When it comes to finances, we might start to think that when a half-baked box like SNAP is fooled by its results — 40% wiped out on Friday night anyway — the damage might be deeper, understand that social media advertising suddenly becomes a bit less of an Eldorado for influencers going to Dubai, and companies that parachute tons of dollars into the web to do “business” are starting to ask themselves if it’s really worth it and splashing ads all over the place on Facebook, Instagram, Snapchat and Twitter really makes sense and is profitable. Especially because the coming months could get a little more difficult — and that’s even if Mrs. Yellen says that everything is fine and that we’re not in a recession because employment is fine — yes, because it’s been two more weeks since “big tech companies ” began to put up sails to “protect themselves from the coming difficult months”. And we can mostly say that when Microsoft, Google, Apple, Amazon et al start smelling burnt, they can’t be ALL wrong…

Still, the SNAP bloodbath may foreshadow the rest of the story and call into question the very sustainability of the rebound we’re currently in. Last week the S&P500 tried to break 4,000 points, but the close on Friday night made everyone agree with the possibility of doing so, and at the beginning of the week of the FOMC meeting, it will not be easy to find the energy to go there immediately. So we have to start the week knowing the reasons to keep and remembering that there are many questions that we will answer in the next 5 days.

Big problems ahead for big tech?

Apart from the fact that social media advertising looks more like it used to. Besides, one of the most prominent articles in the world of finance is the fact that Elon Musk had an affair with the wife of Google boss Sergey Brin, and because of this they divorced. Therefore, we can wonder how Elon Musk manages his days. Knowing that in addition to controlling Tesla, Starlink, its rockets and the intention to fly to Mars. But on top of that, he seems obsessed with having a baby every three months regardless of the mother, he can’t seem to resist anything wearing a skirt. In addition to that, we will have the quarterly numbers full, full of people and that the GAFAM releases will be the most important, not including the rest of the S&P members coming out with Visa, Pfizer, Roku, Exxon, Chevron, McDO and Coca-Cola just to name a few. And given the cautious statements from a significant number of these companies, there is reason to be concerned about the quality of the numbers to be announced, as well as the guidance that will be given.

And that’s not all. That’s not all, because in addition to the numbers that will be released, we sense that many analysts are beginning to wonder if this publication season, which is in full swing, is not also the beginning of a change in attitude in the technology industry and that perhaps gold years in the industry are over, guys who used to make millions a year working from home in their pajamas, maybe it’s not too fashionable anymore. What may challenge the techno-ecosystem in the coming months. And then all of those microeconomic considerations have to be settled by the announcements that the Fed will make after its two-day meeting starting tomorrow.

Powell on eggs at 75 BP

Thus, on Wednesday evening, the Fed will announce a 75 basis point increase in its key rates. In any case, this is what 99.99% of the market expects. But the problem is not only the amplitude of the increase, which will be announced on Wednesday evening. But also, and above all, how the latter will be expressed, and what we can understand about the Fed’s intentions for the coming months. Not to mention, any clear and accurate information on the future of inflation from Jerome Powell’s perspective would be helpful.

Suffice it to say that we are in the “week of all hazards” and if we manage to come out of this week more or less unscathed, he should be in the financial “Hall of Fame”. Not to mention that many of us will use these next 120 hours to figure out if we really are in the midst of a new bull market, or if this was just the Xth bounce in a bear market, and for real.” price”. in this recession that is upon us, we DEFINITELY need to GO TO 3000 before we go to 5000.

In Asia

This morning in Asia we are already in “growth fear” and fear about everything else mode. I have to say that for all the reasons I just mentioned, there is already reason to be calm, but in addition, when we add the fact that fears about European debt are always higher, the Italian 10-year still has a bad face, and if we compare it to the yield of a German 10-year, it is enough to lose control. So the week starts off 0.8% lower almost everywhere with US futures also down 0.10%.

There is also bitcoin coming back from $23,000, where it was 7-8 hours ago, to $21,800. I don’t know if there is any connection, but this morning I came across an article that talks about “disappearing and reappearing in Dubai” of two co-founders of the Three Arrows Capital fund. The latter was absent as authorities sought answers to the fund’s bankruptcy – creditors were still owed more than 2.8 billion – and the two boys reappeared in Dubai and gave interviews to explain that – OF COURSE it was not their fault , and that they wanted to start all over in Dubai because the rules were more relaxed than in Singapore. The interview is simply unreal. Between the two guys who explain that they didn’t use 50 million to illegally buy a yacht and that everything was documented in the foundation’s documents, and one of the founders who ends the interview with the words: “We think it’s in everyone’s interest if we can preserve our physical integrity and keep quiet.”

And don’t accidentally pay what you should. When you see how these guys are doing, and when you see what has already happened in this field in the past, you realize that you will definitely learn nothing and forget everything. Meanwhile, oil is around $94 and gold is trading at $1,724.

No or almost no news of the day

It’s amazing that there’s hardly any big news at the start of what promises to be a complicated, confusing and downright crazy week. We will just see that the Chinese are in the process of firing everyone in the management of Evergrande, but at the same time it has been 8 months that everyone does not care about the future of Evergrande – for a certain period it was US. THE MAIN TROUBLE IN THE WONDERFUL WORLD OF FINANCE, and then suddenly we found that we no longer had inflation under control, and we forgot about it, so this morning: nobody cares.

It should also be noted that two or three voices are beginning to rise in the States that the risk of a real estate collapse is almost as high as it was in 2008 during the subprime crisis, except that this time it was because mortgages rates are rising rapidly. But no one cares there either. Now. How nobody cared about that possibility when Michael Berry screamed himself to death six months before Lehman had a stroke. In short, there is no news this morning.

Numbers of the day

As far as quarterly figures go, it’s still light today. We will have results from Philips, NXP or even Whirlpool and Logitech. Not enough to roll around on the floor in pain either, but you’ll have to keep your energy up because it’s going to be a long week. On the economic front, we’ll have Germany’s IFO – which, along with the Russian gas stories, is likely to be pretty hot – as well as China’s trade balance and the Chicago Fed’s national activity, as well as a report on Biden’s health after his infection with COVID.

At the moment, we’re sitting on the edge of our seats waiting for things to really kick off, but one thing’s for sure: it’s going to be a sporty week. So don’t forget to go to bed early and hydrate well. I wish you a very good start to the week and see you tomorrow morning, same time, same place.

Thomas Veillet

“Many of life’s failures are people who didn’t realize how close they were to success when they gave up. -Thomas A. Edison