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Do this before tomorrow’s inflation reading

Apr 11, 2022

Good morning!

The markets are down in early going as rates rise … like that’s a surprise … not!

Inflation is the big driver this week. I think the number is going to be one of the highest we’ve ever seen. Here’s my take with the fantastic Stuart Varney and why I’m optimistic anyway! (Watch)

Here’s my playbook.

1 – Why Musk changed his mind

Frankly, I am not surprised in the least … a smart gambler always hides his cards. Not being on the board means he can own more than 14.1% … I think he takes Twitter private. He doesn’t have to waste his time with silly board meetings and sillier board members. He’s made his point and despite the CEO’s memo to Twitter employees is undoubtedly very involved at the very top. (Watch)

2 – The Fed is a bug in search of a windshield

Fed officials have been busy talking up their game. For example, Cleveland Fed President Loretta Mester told CBS’ Face the Nation that she believes the Fed can get inflation under control without causing major damage to the economy.

Excuse me … but what the hell does she call what’s already happened??!!

Now we’re supposed to be reassured by her sage advice that inflation will continue to cause havoc through 2023 but then the “trajectory” will fall. (Read)

The hubris is staggering.

Blast shields up, trailing stops if you use ‘em, hedges and inverse funds if not. Or consider buying puts with the expectation that you’ll use profits to further lower your basis in stocks you want to buy more of at lower prices. Alternatively selling cash-secured puts works too!

3 – NIO stops production, boosts prices

We’re not the only ones suffering out of control inflation. China’s now taking a huge hit as supply pressures get worse. China’s PPI – Producer Price Index – has jumped 8.3% YoY. (Read)

Things are apparently so tough that NIO, a Chinese EV car contender with global ambitions, recently stopped EV production and raised prices. (Read)

Could be a super appealing time to pick up a few shares of my favourites.

4 – Why Bitcoin’s really down 5%

The official story is that investors are assessing global macro risks but that’s wishful thinking. There’s simply an entire generation of younger investors who are skittish never having endured a down market before. They’re learning now. (Read)

I’m staying in but keeping my stake super small.

Billionaire investor Peter Thiel wants cryptocurrency to be the next “culture” war. And there’s enough populist opposition that I think he’ll get one. (Read)

5 – Just “T” now

Shares of AT&T jumped nearly 2% after completing the spinoff of WarnerMedia to Discovery Communications. Deutsche Bank named Warner Brothers Discovery a “top pick” but shares of T are up anyway. (Read)

Better choices elsewhere, me thinks!