📊 Identifying the Market Top, Michael Burry's Portfolio Adjustments

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▪️ Earnings Today: DraftKings, Shake Shack, Deere, Doordash, Trade Desk, Roku, Dropbox, Toast (Calendar & Estimates 👇)

▪️ Economic Data Today: Retail Sales, Empire Manufacturing & Jobs Data (Calendar & Estimates 👇)

▪️ Fed Speaker Today: Waller

▪️ Japan unexpectedly slipped into a recession and has lost its spot as the third largest economy, with Germany taking its place.

▪️ Fundstrat’s Tom Lee gave a tip for identifying the market top: “the stock market will peak when it declines on good economic news.”

"Sentiment is too quick to turn bearish. Skeptics of inflation, economy, and stock market have been vocal [yesterday]. This is now what makes a near-term top. At a near-term top, we would expect investors to be adamant that this is a buyable dip," Lee said.

▪️ Several rumors suggest the U.S. has intelligence outlining Russia’s aspirations to place nuclear weapons in space in order to destroy or damage satellites. Much to my surprise, this didn’t seem to impact markets.

▪️ Mortgage rates have risen again, reaching the highest level since early December 2023, which has led to a decline in mortgage application volume by 2.3% last week. The surge in rates is impacting both home purchase and refinancing activities, exacerbating affordability challenges amid low housing inventory. (blog)

▪️ Warren Buffett's Berkshire Hathaway ($BRK.B) reduced its Paramount ($PARA) stake by a third and exited its investment in D.R. Horton ($DHI), among others, leading to a notable decline in Paramount's stock in after-hours trading. The firm also pared down positions in HP ($HPQ) and Apple ($AAPL), while increasing investments in Chevron ($CVX) and Occidental Petroleum ($OXY), signaling strategic portfolio realignment. (blog)

▪️ Michael Burry has notably increased his investments in Chinese tech firms Alibaba ($BABA) and JD.com ($JD), despite their shares struggling amidst a broader Chinese market downturn. As $BABA becomes Scion Asset Management's top holding with a 50% stake increase and $JD the second after a 75,000 share boost, Burry's contrarian moves reflect his history of betting against market trends. (blog)

▪️ Spot Bitcoin ETFs have seen a decline in investor interest, with the lowest single-day gross inflows since their launch on January 11, as reported by JPMorgan. Despite an initial surge, recent outflows from Grayscale Investment’s spot Bitcoin ETF contributed to net outflows for the group, marking a shift in investor sentiment. (blog)

▪️ A typo in Lyft ($LYFT) earnings release led to a rollercoaster 45-minute trading experience for short seller Sinisa Sorgic, resulting in a brief but intense surge in the company's stock price. The error, which exaggerated Lyft's operating margin forecast, ultimately allowed Sorgic to exit with a modest gain after the company corrected the mistake. (blog)

▪️ SpaceX is transitioning its business incorporation from Delaware to Texas, following a Delaware judge's nullification of Elon Musk's $56 billion Tesla pay package. This move, part of Musk's broader strategy post-legal setbacks, underscores his preference for Texas' favorable business environment, marked by significant operations and future ambitions for his companies. (blog)

▪️ Cisco ($CSCO) plans to cut 5% of its global workforce, totaling over 4,250 jobs, as shares drop 9% in extended trading. This move is part of a broader tech industry trend to trim costs, with Cisco also reporting strong fiscal Q2 results but a conservative future outlook. (blog)

Today’s earnings releases (companies w/ mkt cap > $10bn) listed below:

“I’d rather regret the things I’ve done than the things I haven’t done."
- Lucille Ball