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Apple Hits All-Time-High Ahead Of AR/VR Headset Launch

Apple Hits All-Time-High Ahead Of AR/VR Headset Launch

Just days after Meta unveiled it Quest 3 VR/AR headset (at an entry level price), Tim Cook is set to launch a high-end mixed-reality headset at today’s Worldwide Developer’s Conference.

As Engadget reports, Apple has been developing the device for many years, according to reports. The headset, said to be called the Reality Pro, is the company’s most notable product launch at least since the arrival of the Apple Watch in 2015.

However, at an expected price of $3,000, the first version of the headset could be one primarily for early adopters.

“Consensus opinion is the headset would cost $3,000. Apple could surprise positively with a lower price. With a historical focus on design, creativity, collaboration, and fitness we view killer apps to focus on these areas or a combination of such,” Bank of America’s Wasmi Mohan said.

While Mohan rates Apple at “Neutral,” he raised his price target to $190 from $176 on Monday, suggesting further upside of 5% from Friday’s close.

“Apple best positioned to dominate mixed reality [market],” Mohan said.

As we noted previously, according to estimates from Statista Market Insights, users of AR and VR devices are still few and far between, with growth projections until 2027 nowhere near the scale that would make mixed reality “the next computing platform”, at least for now.

Infographic: AR & VR Adoption Is Still in Its Infancy | Statista

You will find more infographics at Statista

Statista estimates that 98 million people will be using VR hardware this year, while 23 million will be dabbling with more advanced AR technology. By 2027, both AR and VR are expected to have surpassed 100 million users worldwide, but that’s still a longshot from the billions of smartphone users across the planet.

Apple’s share price surged to a new record high today…

But we note, due to buybacks, this is not the largest market cap the company has ever had – but it’s getting close again to that $3 trillion level…

 

Watch the Apple launch event live here (due to start at 1300ET):

Tyler Durden
Mon, 06/05/2023 – 12:50

“Real Intent Here Appears To Be To Make Headlines” – Binance Responds To SEC, Bitcoin Extends Losses

“Real Intent Here Appears To Be To Make Headlines” – Binance Responds To SEC, Bitcoin Extends Losses

Update (1240ET): Binance has responded to the SEC allegations in a blog post: “SEC Complaint Aims to Unilaterally Define Crypto Market Structure”

We are disappointed that the U.S. Securities and Exchange Commission chose to file a complaint today against Binance seeking, among other remedies, purported emergency relief.  From the start, we have actively cooperated with the SEC’s investigations and have worked hard to answer their questions and address their concerns.  Most recently, we have engaged in extensive good-faith discussions to reach a negotiated settlement to resolve their investigations.  But despite our efforts, with its complaint today the SEC abandoned that process and instead chose to act unilaterally and litigate.  We are disheartened by that choice. 

While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis. We intend to defend our platform vigorously.  Unfortunately, the SEC’s refusal to productively engage with us is just another example of the Commission’s misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry. 

Today’s action is another in a line of examples where, as with other crypto projects facing similar suits, the Commission has determined to regulate with the blunt weapons of enforcement and litigation rather than the thoughtful, nuanced approach demanded by this dynamic and complex technology. Unilaterally labeling certain tokens and services as securities – even ones over which other U.S. authorities have asserted jurisdiction – only compounds these problems.

Perhaps most surprising, the SEC’s actions undermine America’s role as a global hub for financial innovation and leadership.  Digital asset laws remain largely undeveloped in much of the world, and regulation by enforcement is not the best path forward.  An effective regulatory framework demands collaborative, transparent, and thoughtful policy engagement—a path the SEC has abandoned.

And, to be clear: any allegations that user assets on the Binance.US platform have ever been at risk are simply wrong, and there is zero justification for the Staff’s action in light of the ample time the Staff has had to conduct their investigation.  All user assets on Binance and Binance affiliate platforms, including Binance.US, are safe and secure, and we will vigorously defend against any allegations to the contrary.  Rather, the SEC’s actions here appear to be in service of an effort to rush to claim jurisdictional ground from other regulators—and investors do not appear to be the SEC’s priority.  Because of our size and global name recognition, Binance is an easy target now caught in the middle of a U.S. regulatory tug-of-war. 

It seems based on these developments that the SEC’s goal here was never to protect investors; if that were truly the case, the Staff would have thoughtfully engaged with us on the facts and in our efforts to demonstrate the safety and security of the Binance.US platform.  The SEC’s real intent here, instead, appears to be to make headlines. 

We will continue to cooperate with regulators and policymakers in the U.S. and across the globe because that is the right thing to do.  And Binance remains committed to productive engagement to ensure the next generation of cryptocurrency regulation fosters innovation while implementing and ensuring important consumer protections.  Because Binance is not a U.S. exchange, the SEC’s actions are limited in reach.  Still, we stand with digital asset market participants in the U.S. in opposition to the SEC’s latest overreach, and we are prepared to fight it to the full extent of the law. 

We will work alongside industry partners to defend this important technology from misguided lawsuits.  And we will maintain our unceasing efforts to deliver a safe and trusted platform for our users that holds true to our core value of furthering the freedom of money.

Bitcoin continues to plunge…

*  *  *

In a not-so-surprising headline, WSJ reports that the SEC on Monday sued Binance, the world’s largest cryptocurrency exchange, alleging the overseas company operated an illegal exchange in the U.S.

The SEC lawsuit also named Changpeng Zhao, Binance’s founder and controlling shareholder, as a defendant. The SEC filed the case in federal court in the District of Columbia.

As a reminder, the CFTC sued Binance and Zhao himself in late March for allegedly violating derivatives regulations, and accused it of having “sham” compliance.

Binance also faces a Justice Department investigation over its program to detect money laundering, according to people familiar with the matter.

As usual, the initial kneejerk reaction to any regulatory headline is to ‘sell’ crypto.

Bitcoin is extending losses below $27,000…

And Ethereum accelerated below $1900…

Binance own token BNB is plunging…

Additionally, Bloomberg reports that Binance’s payments partner in Australia had abruptly cut it off, meaning local customers couldn’t deposit Aussie dollars on the platform via bank transfer.

The hit to business was immediate, with Binance halting all Aussie trading pairs about two weeks later, along with bank withdrawals of the local currency. 

Add one more headache to the swelling list of challenges facing Richard Teng, the civil servant-turned-crypto executive who’s seen as a possible heir to Binance’s embattled chief executive officer, billionaire Changpeng “CZ” Zhao.

Binance still handles more trading than all other top centralized crypto exchanges combined, yet never has its position seemed so precarious.

In a tweet, Zhao said Binance hadn’t seen the complaint and would respond once it did.

“Our team is all standing by, ensuring systems are stable, including withdrawals, and deposits,” he added, referring to the possibility of customers pulling funds.

Tyler Durden
Mon, 06/05/2023 – 12:45

What’s The Fundamental Problem In China, The US, And The EU?

What’s The Fundamental Problem In China, The US, And The EU?

Authored by Mike Shedlock via MishTalk.com,

Here’s a Tweet that caught my eye regarding the “fundamental problem” in China. What about the US and EU?

Fundamental Problem in China

“The fundamental problem — that Chinese people paid excessive prices for real estate because they thought the price would always go up — remains. And that means that someone will eventually have to take the losses.”

Someone Will Have to Take the Losses

Noah accurately comments that “someone will eventually have to take the losses.” 

In China, the government refuses to support consumption. Instead, it repeatedly turns to real estate and exports for growth, pilling on losses upon losses in State Owned Enterprises (SOEs).

In the US we have commercial real estate problems, overprices houses, and  overpriced equities. 

Someone will have to take the losses, notably pension plans that are massively underfunded despite three consecutive stock market bubbles. 

But is That the Fundamental Problem?

Hardly. The fundamental problem everywhere is an unsound currency system that promotes bubbles as a means of growth. 

The fundamental problem propagates differently in different place.

China has massive property bubbles. The US has untenable deficit spending issues and many bubbles, yet, still tries to be the world’s policeman, while weaponizing the US dollar on top of it all.

In the EU, Germany and Northern Europe largely dictate what happens in a core vs periphery issue.

The EU has an additional problem: The Maastricht treaty, the EMU, and EU  rules make it nearly impossible to fix anything without unanimous consent of all the nations involved.  

Central banks everywhere are guilty of promoting bubbles and busts of increasing amplitude. 

The Fundamental Problem

The fundamental problem is best viewed as a combination of unsound currencies, unsound central bank policies, and unsound fiscal policies that manifest in different ways in different countries.

But every country has the same thing in common: “someone will eventually have to take the losses.” 

That we are in such a quagmire over that unavoidable truth is not the problem. It’s a symptom of the primary underlying problem, unsound currencies, everywhere.

Global Japanification and a Currency Crisis on Deck

A fundamental strength of capitalism is ability to succeed and fail. 

We do not have capitalism when central banks and governments act to prevent losses. Nonetheless, the losses and distortions continue to mount or are papered over at taxpayer expense.

Japanification of the global economy has largely been the result, more so in Japan and the EU, than the US. Japanification of China is happening now.

A currency crisis of some sort awaits, as every country, but in different ways, is hell bent on preventing someone from taking the losses.

I think that the crisis starts outside the US. Likely places include Japan, China, or the EU, but it could start anywhere. 

Dollar Weaponization Will Speed Up the Crisis

One thing I am certain about is dollar weaponization by the Fed will speed up the timeline.

For discussion, please see Dollar Weaponization Expands – FDIC Message to Foreign Depositors Is Don’t Trust the US

Also see Central Banks Are Buying Gold at Record Pace, What Does That Mean for Inflation?

Just don’t expect immediate results. We have been on an unsustainable path for decades. 

Don’t underestimate the willingness or ability of central banks to kick the can down the road. No one knows when, or what the trigger will be. 

Do expect more global Japanification.

*  *  *

Please Subscribe to MishTalk Email Alerts.

Tyler Durden
Mon, 06/05/2023 – 12:30

‘People Of Interest’ Within Government Suppressed Critical Intelligence Before J6

‘People Of Interest’ Within Government Suppressed Critical Intelligence Before J6

One day before the January 6th riot, then-President Donald Trump suggested to Defense Secretary Christopher Miller; “You’re going to need 10,000 people” to secure the Capitol from protesters challenging the results of the 2020 election.

And [Trump] goes, ‘You’re going to need 10,000 people.’ No, I’m not talking bullshit. He said that. And we’re like, ‘Maybe. But you know, someone’s going to have to ask for it.’” At that point Miller remembered the president telling him, “‘You do what you need to do. You do what you need to do.’ He said, ‘You’re going to need 10,000.’ That’s what he said. Swear to God.”-Vanity Fair

Now we learn that “people of interest” within the US intelligence community may have suppressed specific information forewarning of violence on that fateful day.

As Just the News reports, Rep. Barry Loudermilk (R-GA) – the lawmaker leading the investigation into security failures leading up to January 6th – said in a recent interview with Just the News that the Capitol Police intelligence unit had received a significant amount of detailed information in the weeks and days leading up to the event, that specific extremist groups planned to commit violence on Jan. 6, 2021.

We do know that the security failure began with an intelligence failure,” Loudermilk told JTN on Friday. “We have uncovered that there was significant intelligence that was provided to the intelligence division of the Capitol Police, starting in the beginning of December, all the way up through the morning of Jan. 6.

“Some of that intelligence actually laid out what the operational plan of some extreme groups were to enter the Capitol, take over Congress, even kill some Capitol police if they had to,” he continued. “This made it to the Intelligence Division. But it never made it any further. Even the chief of Capitol Police was not made aware of that level of intelligence.”

According to Loudermilk, his House Administration investigative subcommittee has made ‘substantial progress’ in identifying the specific individuals who may have suppressed or mishandled the intelligence.

“Who was involved in this? Was it one person that just squelched the intelligence? Was it just a massive failure? Was it because of incompetence, or was it somebody who purposely suppressed that intelligence?” he asked. “There’s actually some people of interest that we’re talking to, and we’re looking into to see where that failure was.”

Answering these questions is key to better protecting the Capitol in the future.

“The frontline officers, man, they fought valiantly that day,” he said. “But they were ill equipped. They were not prepared, and none of them knew what was coming. But there were certain people in the Capitol Police that did.”

Just the News reported last year that federal and local law enforcement partners sent Capitol Police significant intelligence warnings of violence days and weeks ahead of the Jan. 6 event, including specific threats by groups like Oath Keepers and Proud Boys and warnings that the tunnel system throughout the Capitol might be targeted. The warnings though did not get sent up the chain of command to Chief Sund.

And just three days after the Jan. 6 Capitol breach, one of the Capitol Police’s top intelligence analysts sent a blistering email to supervisors, blowing the whistle on what he said was a failure to heed clear intelligence warning that right-wing rioters planned to storm the Capitol. -Just the News

We analysts have been reporting for weeks that Patriot groups are commenting on social media their intentions to storm the U.S. Capitol with overwhelming numbers,” wrote Eric Hoar in a Jan. 9, 2021 email to his bosses. “I don’t know what was occurring behind the scenes, but I hope that information was briefed with the veracity it deserved, and not just a one-time Event Assessment.”

Loudermilk is also looking into the Democrat-led J6 committee, and says he’s found some shocking evidence that many of its public hearings were mismanaged.

“We found out in the in the documents that I acquired from the Jan. 6 committee is the written script of every member of the committee. Just like you would have on a teleprompter or if you memorize a script for a movie,” he told JTN. “And so every single aspect of their hearings was scripted for a Hollywood type of emotional appeal to the American people.”

He added that Republicans currently running the House committee are taking a different approach.

“We just recently had a hearing with the chief of the Capitol Police. There was nothing scripted about it,” he said. “We did have certain questions that we wanted to ask, but each member had their questions. The chief wasn’t given a script in advance. …  These hearings from the January 6 Select Committee were Hollywood productions.”

Tyler Durden
Mon, 06/05/2023 – 12:10

“Your Speech Is Violence”: How The Mob Is Using A New Mantra To Justify Campus Violence

“Your Speech Is Violence”: How The Mob Is Using A New Mantra To Justify Campus Violence

Authored by Jonathan Turley,

Below is my column in The Hill on the increasing justification of violence by the left on our campuses by declaring speech itself “violence.” It is part of the license of our age of rage for many who want to silence opposing viewpoints. There is, however, a way to end this anti-free speech movement sweeping through higher education.

Here is the column:

“Silence is violence.”

When those words became a popular mantra years ago on college campuses, I wrote that the anti-free speech movement was moving toward compelled speech while declaring dissenting views to be harmful.

Today, it isn’t just silence that is considered violence on college campuses. It is also speech, as both faculty and students are actively shutting down opposing views on subjects ranging from abortion to climate change to transgender issues.

Recently, many people were shocked by a videotape of Hunter College professor Shellyne Rodríguez trashing a pro-life student display in New York. Most were focused on her profanity and vandalism, but there were familiar phrases that appeared in her diatribe to the clearly shocked students.

Before trashing the table, she told the students, “You’re not educating s–t […] This is f–king propaganda. What are you going to do, like, anti-trans next? This is bulls–t. This is violent. You’re triggering my students.”

The videotape revealed one other thing. At Hunter College, and at other colleges, it seems that trashing a pro-life student display and abusing pro-life students is not considered a firing offense. Hunter College refused to fire Rodríguez.

The PSC Graduate Center, the labor organization of graduate and professional schools at the City University of New York, supported that decision and said Rodríguez was “justified” in trashing the display, which the organization described as “dangerously false propaganda” and “disinformation.”

Rodríguez later put a machete to the neck of a reporter, threatened to chop him up and then chased a news crew down a street with the machete in hand. Somewhere between the machete to the neck and chasing the reporters down the street, Hunter College finally decided that Rodríguez had to go.

Rodríguez denounced the school for having “capitulated” to “racists, white nationalists, and misogynists.” She explained that her firing was just a continuation of “attacks on women, trans people, black people, Latinx people, migrants, and beyond.”

The redefinition of opposing views as “violence” is a favorite excuse for violent groups like antifa, which continue to physically assault speakers with pro-life and other disfavored views As explained by Rutgers Professor Mark Bray in his “Antifa: The Anti-Fascist Handbook,” the group believes that “‘free speech’ as such is merely a bourgeois fantasy unworthy of consideration.”

As one antifa member explained, free speech is a “nonargument…you have the right to speak but you also have the right to be shut up.”

When people criticized antifa for its violent philosophy, MSNBC’s Joy Reid responded to the critics that “you might be the fascist.”

Faculty members have followed this sense of license to silence others. Former CUNY law dean Mary Lu Bilek even insisted that disrupting a speech on free speech was free speech. (Hunter is part of the CUNY system.)

The same week as the Rodríguez attack at the State University of New York at Albany, sociology professor Renee Overdyke shut down a pro-life display and then allegedly resisted arrest.

Just last week, the Pride Office website at the University of Colorado (Boulder) declared that misgendering people can be considered an “act of violence.”

This week, University of Michigan economics professor Justin Wolfers declared that some of those boycotting the store Target over its line of Pride Month clothing were engaging in “literal terrorism.” (He insists that he was referring to those confronting Target employees.)

Faculty have also justified attacks on pro-life figures. At the University of California, Santa Barbara, feminist studies associate professor Mireille Miller-Young physically assaulted pro-life advocates and tore down their display. 

She pleaded guilty to criminal assault, but the university refused to fire her. Instead, some faculty and students defended her, including claiming that pro-life displays constitute terrorism. The University of Oregon later honored Miller-Young as a model for women advocates.

Likewise, at Fresno State University, public health professor Dr. Gregory Thatcher recruited students to destroy pro-life messages.

Other faculty have called for or countenanced violence against Republicans and conservatives. Professors have shouted down speakers, destroyed propertyparticipated in riots and verbally attacked students.

University of Rhode Island professor Erik Loomis defended the murder of a conservative protester and said he saw “nothing wrong” with such acts of violence. He was later elevated to the position of director of graduate studies of history.

As faculty commit or support violence, students are assured that others are the violent ones. Recently, at the University of Texas at Austin, Professor Kirsten Bradbury tested her students on psychology by asking them “which sociodemographic group is most likely to repeatedly violate the rights of others in a pattern of behavior that includes violence, deceit, irresponsibility, and a lack of remorse?” Of course, the answer was wealthy white men.

The lesson took with students. A recent poll shows that 41 percent of college students now believe violence is justified to fight hate speechAt Cornell, a conservative speaker was shouted down, met with the common mantra that “your words are violence.” At Case Western, the student newspaper editorialized against university recognition of a pro-life group because its pro-life views are “inherently violent” and “a danger to the student body.” At Wellesley, student editors declared that it was time to shut down conservative speakers and that “hostility may be warranted.” They added, “The spirit of free speech is to protect the suppressed, not to protect a free-for-all where anything is acceptable, no matter how hateful and damaging.”

Those views did not spontaneously appear in the minds of these students. At one time, tolerance for free speech was the very touchstone of higher education and a common article of faith for students. These students are the product of years of being told that free speech is dangerous and harmful if left unregulated. From elementary school to college, they were taught that they did not have to be “triggered” by the speech of others.

We are still (thankfully) drawing the line at machete attacks. But it is the underlying views of Rodríguez that are the true threat, and they are being replicated throughout the country. We are raising a generation of censors and speech-phobics.

If we want to stop or reverse this trend, Congress must act. I have proposed legislation that would deny federal funding to schools that do not protect core free speech principles. We are funding schools that are taking a machete to the defining right of our democracy.

It is akin to the recent resolution of the case of an antifa member who took an axe to Sen. John Hoeven’s (R-N.D.) office in Fargo. Thomas “Tas” Alexander Starks, 31, was given probation…and his axe back.

We may not be able to deter people from speaking through machetes and axes, but we can at least stop subsidizing the hardware.

Tyler Durden
Mon, 06/05/2023 – 10:30

Core US Factory Orders Unexpectedly Shrank In April – Weakest Since COVID

Core US Factory Orders Unexpectedly Shrank In April – Weakest Since COVID

It really should not have been a surprise – given the weakness in Manufacturing PMIs – but headline and core US factory orders disappointed in April (today’s latest data).

The headline factory orders rose just 0.4% MoM (half the 0.8% MoM expected) and worse still, the March data was revised form from +0.9% to +0.6% MoM.

Source: Bloomberg

That left the annual growth in new orders at just 0.2% – the weakest since Oct 2020.

Core factory orders (ex-transports) was even worse, dropping 0.2% MoM (+0.2% MoM exp) – the third straight monthly decline…

Source: Bloomberg

This left core factory orders down 2.2% YoY – the biggest drag since the COVID lockdowns.

How long can the manufacturing side of the economy continue to collapse before the Services side catches down?

Tyler Durden
Mon, 06/05/2023 – 10:20

Another 52 Shot, 10 Murdered In Chicago This Weekend

Another 52 Shot, 10 Murdered In Chicago This Weekend

Authored by Ted Dabrowski and John Klingner via Wirepoints.org,

How long will Chicago’s Mayor Brandon Johnson stick with his “violence as a symptom of disinvestment” explanation that was widely criticized? 

His comments came last weekend after 12 Chicagoans were murdered and 53 shot.

Memorial Day weekend was a big test for the new mayor, whose investment in yellow-vest “Peacekeepers” and anti-violence programs failed to stem the bloodshed.

That weekend was bad enough, but now he’s got another weekend of 10 murdered and 52 shot (as of 5pm Sunday).

 From ABC7:

  1. A shooting in Austin Sunday left one person dead and six others wounded. A 25-year-old woman was killed in the shooting.

  2. Minutes earlier, a 34-year-old man was fatally shot and another was wounded downtown, police said. 

  3. Hours later, another 30-year-old man was shot to death and a woman was wounded in Little Italy. 

  4. A 40-year-old man was fatally shot Saturday night in front of a home in Chatham. 

  5. Over an hour earlier, a 19-year-old man was killed and another was wounded in a shooting in Humboldt Park. 

  6. A 70-year-old man was killed and another wounded in a shooting Saturday morning in Englewood on the South Side. 

  7. Hours earlier, a 31-year-old man was fatally shot in the city’s South Shore neighborhood. 

  8. Just under three hours earlier, a 32-year-old man was shot and killed in North Lawndale. 

  9. About two hours before that, a 23-year-old man was fatally shot while sitting in his car in the Austin neighborhood.

[Additionally, as Thomas Lifson reports, in video leaked to CWB Chicago, we see how much worse matters have become, with 2 machine gun-armed men caught on video firing at unseen targets, killing a child, and injuring at least 3 others.

To make matters much worse, when police arrived to investigate, a 16-year-old boy fired shots at the officers, thankfully missing them.]

Mayor-Elect Brandon Johnson’s focus on “root causes,” with little-to-no emphasis on containing today’s out-of-control violence, is a strategy doomed to fail.

Tackling root causes is important, but they take a long time to address – if they can even be agreed to.

We wrote only a month ago that Johnson should count on the following if he won’t tamp down on crime immediately:

  • Crime will continue to pay.

  • Large number of Chicagoans will continue to be victimized.

  • 911 responses will continue to be delayed.

  • Minorities will continue to suffer most.

  • Cops will continue to leave

  • More and more dangerous felons will be released. 

  • Chicago will continue to lead the nation in homicides.

For full details, read: “What Chicago requires immediately is deterrence. Stop the bleed. Fast.

Tyler Durden
Mon, 06/05/2023 – 10:10

Services Surveys Disappoint In May; Employment, New Orders Tumble

Services Surveys Disappoint In May; Employment, New Orders Tumble

Following the decline in Manufacturing survey data (both ISM and PMI in contraction – sub-50), both Services surveys were expected to show improvements in May.

  • S&P Global US Services PMI prints 54.9 final for May (missed expectations and down from 55.1 flash print) but higher than the 53.6 in April (highest since April 2022)

  • ISM Services prints 50.3 for May missing expectations of a rise to 52.4 from 51.9 – lowest since Dec 2022

Source: Bloomberg

Comparing the two series shows the growing divergence between Services and Manufacturing – spot the odd one out!

Source: Bloomberg

Under the hood, Services employment dropped into contraction as new orders and prices paid slipped lower…

Source: Bloomberg

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

“The US continued to see a two-speed economy in May, with the sluggishness of the manufacturing sector contrasting with a resurgent service sector. Businesses in sectors such as travel, tourism, recreation and leisure are enjoying a mini post-pandemic boom as spending is switched from goods to services.

“However, just as demand has moved from goods to services, so have inflationary pressures. While goods price inflation has fallen dramatically in May to register only a marginal increase, prices charged for services continue to rise sharply.

“Although down considerably on last year’s peaks, service sector inflation remains higher than any time in the survey’s 10-year history prior to the pandemic, bolstered by a combination of surging demand and a lack of operating capacity, the latter in part driven by labor shortages.

“However, while rejuvenated service providers will make hay in the summer season, the weakness of manufacturing raises concerns about the economy’s resilience later in the year, when the headwind of higher interest rates and the increased cost of living is likely to exert a greater toll on spending.”

Finally, we note that The S&P Global US Composite PMI Output Index posted 54.3 in May, up from 53.4 in April, to signal the fastest expansion in business activity for just over a year.

The survey data are indicative of GDP growing at an annualized rate of just over 2%, and an upturn in business expectations points to growth remaining robust as we head further into the summer.

Tyler Durden
Mon, 06/05/2023 – 10:05

Report Leaked To NYT Shows 59% Drop In Twitter’s Ad Sales

Report Leaked To NYT Shows 59% Drop In Twitter’s Ad Sales

In a BBC News interview in April, Elon Musk said Twitter is now “roughly breaking even,” and most advertisers have returned. However, The New York Times said they obtained the social media’s internal weekly sales projections presentation that allegedly showed a sharp decline. 

NYT said Twitter’s US advertising revenue for the five weeks from April 1 through the first week of May was $88 million, down 59% versus the same period a year ago. The report noted weekly sales projections were frequently missed by as much as 30%. 

Adding more gloom, NYT spoke with seven current and former Twitter employees. Here’s a summary of what they said:

Twitter’s ad sales staff is concerned that advertisers may be spooked by a rise in hate speech and pornography on the social network, as well as more ads featuring online gambling and marijuana products, the people said. 

For June, the internal forecast shows that advertisers are reducing ad spend or have left entirely. The forecast shows that ad spending each week of this month will be halved versus figures last year.

That may be why Musk decided to bring on NBCUniversal’s head of advertising, Linda Yaccarino, last month as CEO to restore confidence in the platform among advertisers. 

NYT spoke with Jason Kint, chief executive of Digital Content Next, an association for premium publishers, who said Twitter is “unpredictable and chaotic.” He added: “Advertisers want to run in an environment where they are comfortable and can send a signal about their brand.” 

And this likely points to why Musk made the move to bring on Yaccarino. She could smooth out concerns among some of the social media’s largest advertisers — Apple, Amazon, and Disney — who, according to three former and current Twitter employees, have been spending less. 

And it’s not just about restoring confidence for mega-corporations. Advertisers, in general, have reduced spending on the social media platform due to “Musk’s changes to the service, inconsistent support from Twitter and concerns about the persistent presence of misleading and toxic content on the platform,” NYT said. 

Meanwhile, Fidelity was compelled last week to announce that it slashed Twitter’s valuation to just $15 billion, about a third of the $44 billion Musk paid in October. 

If the NYT report is accurate, it makes sense why Musk brought on Yaccarino to re-establish trust in the platform among advertisers. 

Tyler Durden
Mon, 06/05/2023 – 09:35

Will Very Narrow Breadth Lead To Broad Equity Upside?

Will Very Narrow Breadth Lead To Broad Equity Upside?

Authored by Simon White, Bloomberg macro strategist,

Extremely narrow breadth has historically led to further index upside.

As discussed in my previous post, it is not inconceivable (but still unlikely) that the recent zeal for AI could avert a US recession.

Whether it does or not is really moot as an investor, what’s important is asset performance.

And on that basis, the AI rally is on more solid ground.

In short, narrow leadership often creates its own reality and ends up dragging the rest of the market along with it.

That’s may happen this time too.

I looked at all the times the S&P 500 had been driven by as narrow leadership as we have today.

As the chart below shows, it’s not an uncommon occurrence.

If we look at all the times (going back to 1990) when then average six-month return of the top five stocks in the S&P (by market cap) was more than 20% points more than the index’s six-month return in the S&P (as it is today)…

…we can see we typically get well above-average forward returns in the index.

Tyler Durden
Mon, 06/05/2023 – 06:30