No-Landing In Europe

Good Morning Everyone!

Elon Musk recruits team to develop OpenAI rival to fight ‘Woke AI’.

Will it be called TruthGPT?

Prices as of 4 pm EST, 2/27/23; % YTD

MARKET UPDATE

Hot European Inflation Data / No-Landing

• France CPI +7.2% in February

• Spain CPI +6.1% in February

• German 2-year government bond yield jumped to highest level since 2008

• ECB may now hike 50 basis points in March

• Peak for ECB interest rates jumped to 4%

Sector perfomance

Crude 77.50 +2%

Tesla TSLA

• Signs $2.9 billion deal with South Korea’s L&F

• Provide cathode materials for EV batteries

• Year-to-date, Tesla stock up 68%

• Elon back to richest person in the world

Race to exit China

• Today AirPods maker GoerTek investing $280 million in new Vietnam plant to move production away from China

• This follows a general trend to exit China and diversify supply chain given geopolitical tensions between U.S. and China

Re-Opening

• Hong Kong will stop requiring masks to be worn in public places

• Mandate to wear masks lasted 945 days

Earnings

• Occidental Petro OXY flat upped $3B buyback, raised dividend, 2023 Capex > street             

• Workday WDAY -2% topline beat, revenue guide less than street

• Zoom ZM +6% revenue guide lowered less than expected

• Target TGT flat 2023 EPS guide below street

• AutoZone AZO flat earnings and sales beat, Q4 SSS +5.3%

• Sempra SRE flat revenue miss, earnings beat, guide maintained

CRYPTO UPDATE

Binance vs. Forbes report

• Alleges Binance quietly moved $1.8 billion in stablecoin collateral to hedge funds

  • Including Alameda Research

• B-peg USDC holders were left holding tokens with no backstop

• Actions “eerily similar to maneuvers by FTX”

• Binance is denying, naturally

Whale dumps NFTs

• NFT whale Machi Big Brother sold off +1,000 NFTs in 48-hour period

• Biggest NFT dump ever

• Total sales close to $18 million

Bitcoin BTC/USD correlations

• Correlations with equities and gold have fallen sharply

• Less sensitivity to macro events