MAD Macro - Hello Xi
Hello Xi, Let’s Do a Biggly Deal
Kevin, You’re the Most Dangerous Man Now
Trump should be landing in Beijing this morning after picking up Super Jensen on the way in Alaska. Apparently, Super Jensen was a last-minute addition to the trip, so Trump stopped to pick him up in Alaska during a refueling. Tim Cook and Elon Galt Musk were already on board. It would be interesting to be a fly on the wall in that plane. Did they discuss Taiwan? So many questions. What about tariffs or AI regulations? This is really an interesting trip. Xi is backing our enemies, Russia and Iran, yet Trump has a “great relationship” with Xi. It seems to me there are way too many elephants in the room for this summit to be anything but a biggly letdown. The WSJ has a good article today on the summit, linked here. It’s titled, “What Trump and Xi Want to Achieve at Their High-Stakes Summit”. Meanwhile the NYT published an article today titled, “China Increasingly Views Trump’s America as an Empire in Decline”. The NYT is working very hard to destroy Trump.
Richie Rich Warsh is about to be confirmed by the Senate despite Elizabeth Warren’s best efforts to stop it. Elizabeth Warren once called Jay Powell the “most dangerous man in the world”. I can’t wait to hear what she calls Richie Rich Warsh in his first Senate hearings when he is Fed Chairman. Funny enough, when Trump started attacking “Too Late” Powell, Elizabeth decided that Powell was no longer the most dangerous man. He became her new tribal hero. TDS is a strange affliction. The WSJ editorial board has a good article today on the problems Kevin Warsh will confront in his new job, linked here. It’s titled, “Jerome Powell’s Inflation Legacy for Kevin Warsh”. The title is a little unfair to Jay. Maybe it should have read, Biden’s inflation legacy for Kevin Warsh. Anyway, we got bad news on inflation yesterday. I included a chart of CPI from the article below. Today we get the PPI inflation report. It’s also expected to be bad news. PPI year-over-year is expected to be 4.8% up from 4.0% last month.
Markets are reversing yesterday’s rotation away from tech. Today the DOW futures are lower, and the NASDAQ 99 futures are higher. The Cerebras IPO is expected to price today above the top of its marketed range. Apparently, it is 20 times oversubscribed. Anthropic has started a new round of private funding at a $900 biiillion valuation. It’s an AI feeding frenzy. “Be fearful when others are greedy, and be greedy when others are fearful”, Warren Buffett.
I added the chart of CPI and updated the U.S. Dollar Index, U.S. 10yr yield, U.S. 10yr-2yr yield spread, WTI crude oil, NY copper, spot gold, spot silver, NYSE Arca Gold Miners Index, bitcoin, Strategy, S&P futures, NASDAQ 99 futures, and DOW futures charts below.
The dollar is slightly higher, and interest rates are unchanged after rising yesterday on the CPI inflation report.
Crude oil is unchanged, still above $100. Spot gold and silver are close to unchanged, and the NYSE Arca Gold Miners Index should also open unchanged. Bitcoin is unchanged and Strategy is due to open unchanged.
The S&P and NASDAQ 99 futures are higher and the DOW futures are lower.
