In his podcast addressing the markets today, Louis Navellier offered the following commentary.
Ford Motor Co (NYSE:F) announced this week that it has secured lithium supply deals with Albemarle, Livent and SQM to save $7 billion in costs relative to its competitors.
As Ford shifts to utilizing more iron-phosphate (LFP) batteries, it actually needs more lithium, since lfp batteries require more lithium than lithium-ion batteries that also use expensive cobalt and nickel.
The electric vehicles (EVs) that use LFP batteries will be cheaper and a price war is expected to breakout for EVs, just like it has in China, where BYD is now dominating market share.Gates Cap Management Reduces Risk After Rare Down Year
In other words, in the race to build cheaper EVs, Ford is striving to cut its costs via direct lithium suppliers.
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy read more Table of Contents show
an expanding service sector and a contracting manufacturing sector
the flattening treasury yield curve
coffee beans: sealed with a kiss
An Expanding Service Sector And A Contracting Manufacturing Sector
The euro-zone manufacturing purchasing managers index (PMI) plunged to 44.6 in May, which is the lowest level in 36 months.
Any reading below 50 signals a contraction.
The euro-zone service sector PMI also declined to 55.9 in May, but since it is well above 50, the service sector is still growing in the euro-zone.
So essentially, the euro-zone is very similar to the U.S., with an
expanding service sector and a contracting manufacturing sector.
Mighty Germany is in the midst of a big manufacturing slowdown and continues to struggle with high energy costs.
The European Central Bank will now have to consider pausing its interest rate hikes, otherwise it risks tipping the euro-zone into a recession.
The Flattening Treasury Yield Curve
In the U.S., with the debt ceiling concerns and worries about the Fed's interest rate hikes waning, you may be wondering what is Wall Street going to stress about next?
The recent banking woes in banks that catered to wealthy customers that moved their money if they were not paid a good yield on deposits, just demonstrates that the Fed has to un-invert the Treasury yield curve as Neel Kashkari emphasized, since an inverted yield curve naturally stresses the banking system.
So be on the lookout for the Treasury yield curve getting flatter and eventually un-inverting in the upcoming months.
There is a tremendous amount of cash on the sidelines, which could pour into the stock market spark a major market rally, as soon as there is a“spark.”
In the meantime, the oasis this year have been the seven largest technology stocks, namely Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), Netflix (NASDAQ:NFLX), Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA), now account for approximately 25% of the capitalization weighting in the S&P 500 and 55% of the NASDAQ 100.
Three of these seven giant stocks are benefitting from all the AI buzz, led by nvidia .
Another up and coming AI stock is Super Micro Computer, which is helping to make cloud computing smarter as AI is invading the cloud computing space.
There is a growing war between Google and Microsoft over using AI search engines.
The rumbling that Samsung devices may switch to Microsoft's Bing from Google for search is fueling the escalating AI war.
Since AI and technology stocks currently lead the overall stock market, the“spark” that triggers the cash pouring in from the sidelines could be any positive news emerging from the technology sector, such as Apple's new iPhone announcement in September.
However, that spark could also come from the Fed commenting that inflation is cooling.
Since 2024 is a Presidential election year, the Fed does not want to be part of the economic debate, so key interest rates cuts will be forthcoming later this year and in early 2024.
It is important to realize
that there is going to be wave after wave of positive news on inflation , interest rates and economic growth that will be coaxing investors back into the stock market.
The leadership of the stock market will undoubtably change in the upcoming months, although some of the seven giant technology stocks, like Nvidia, are expected to continue prosper from the AI boom.
Now that summertime has arrived, it is time for most investors to cheer up.
The velocity of money typically picks up in the summer as folks get out and about more.
The retail sales report showed that consumer spending at bars and
restaurants rose 0.6% in April and 9.4% in the past year.
Additionally, Walmart's same-store sales rose an impressive 7.4% in the first quarter.
Coffee Beans: Sealed with a Kiss
Groceries and online sales are helping to boost Walmart's results.
Walmart provided positive guidance for 2023, so optimism for consumer spending is rising.
Another example is that the Atlanta Fed recently raised its second quarter GDP estimate to a 2.9% annual pace.
Scientists have found evidence that ancient humans began kissing around 4,500 years ago – 1,000 years earlier than was previously thought. Clay tablets, used in parts of modern-day Iraq and Syria, suggest kissing was practised in the earliest Mesopotamian societies and may even have contributed to the spread of cold sores. Source: Sky News. see the full story here .