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Porsche invents new product based on best-selling supercar (it’s not for the road)

The German car maker is venturing into new territory with the introduction of a new sporty super-creation.

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Just when you thought the ever-yawning gulf between high-end, luxury goods and budget-friendly attainable finds couldn't get any wider, it does.

And a brand new innovation, which puts one of the most beloved and capable luxury SUVs in a wholly new environment promises to widen the gap even further. 

Related: Forget Apple Watch — this new fitness accessory might be even better

But as some wealthy Americans stock up on sports cars or galavant around the Mediterranean, others worry about the rising cost of living.

The September Consumer Price Index (CPI), which was released on Thursday, indicated that the cost of energy rose 1.5% compared to a month ago, with gasoline up 2.1% and fuel oil up 8.5% compared to August. 

In a somewhat rosier picture, new vehicles only saw prices up 0.3% and used cars actually decreased 2.5%. 

Still, life is more expensive, and Americans are pinching pennies where they can.

So it may be hard to believe that, in 2023, when things seem pricier than ever, the Porsche Macan is the German automaker's best selling car. The compact-but-capable SUV, which comes standard with a turbocharged four cylinder engine, sold 88,362 units in 2021. A standard 2024 model also retails for $62,550. Its high-powered sportier model, the Macan S, starts at over $73,000. 

But the super luxury market continues to reach for the sky. Or, in Porsche's case, the waters. 

LONDON, UNITED KINDOM - JUNE 29: The Porsche Macan S in Kensington, London. The Macan S is Porsche's compact SUV, with a twin-turbo V6, it sits between the Macan T, and the Macan GTS. (Photo by Martyn Lucy/Getty Images)

Martyn Lucy/Getty Images

Porsche creates a new super powered monstrosity 

But everyone knows that millionaires and billionaires don't simply confine themselves to the road. They drive their luxury vehicles to their luxury yachts. So Porsche is trying its hand at an all-new craft: the electric boat. 

Based on the all-popular Macan powertrain, Porsche has input its electric capabilities into a boat, referred to as the Frauscher x Porsche 850 Fantom Air. 

It's important to note that the all-electric Porsche Macan isn't even available for sale yet, so you can bet this is one capable (and likely pricey) boat. 

"The electric motor sits in the back of the boat while the controls are housed in a waterproof box emblazoned with the Porsche logo. The lithium-ion battery with a gross capacity of 100 kWh, likewise adopted from the Macan, is also located under the lounge area at the rear end. For the suspension in the support frame, the experts at Porsche opted for wire rope mounts, which are particularly good at absorbing the shocks that inevitably occur while driving fast and in waves," Porsche writes. 

"The Frauscher x Porsche eFantom glides comfortably over the water despite its sporty overall orientation."

The boat will also include different settings, depending on what a captain is doing, including: 

  • Docking
  • Range
  • Sport
  • Sport Plus

Porsche describes the "optimum" cruising speed as 41 km/h (22 kn), though when it's driving on hull speed, it's reached 100 km/h. Porsche advises a cruising speed of only 85 km/h, or about 53 mph (it's capped at that in Sport Plus mode).

If that sounds like it burns a lot of gas, recall that the boat is electric. It charges from 10% to 80% in just about 30 minutes using its 800-volt technology.

Exclusive first edition units, as Porsche is calling them, will be available for ordering in January 2024 and start at €561,700 ($592,849 USD). 

"The eFantom offers everything that Frauscher and Porsche products have always promised: outstanding performance and luxurious experiences, the highest quality and exclusive, timeless design," Detlev von Platen, member of the Board of Management for Sales and Marketing at Porsche said.

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Fed And Treasury Ensure Dollar Downside Is Ahead

Fed And Treasury Ensure Dollar Downside Is Ahead

Authored by Simon White, Bloomberg macro strategist,

The Fed’s pivot in December and the…

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Fed And Treasury Ensure Dollar Downside Is Ahead

Authored by Simon White, Bloomberg macro strategist,

The Fed’s pivot in December and the Treasury’s willingness to run persistently large fiscal deficits will lead the dollar to resume its downtrend from 2022 highs.

Dollar strength seems to be in vogue again, but fiscal and monetary policy will conspire to make that trend unlikely to persist much longer. Running pro-cyclical fiscal deficits, not just in the US but across much of the developed world, has become the norm. Electorates’ expectations widened after the pandemic, and now there is an unwritten pact between governments and their voters that they will underwrite a growing itinerary of risks from job loss to disease – the Treasury put.

Large fiscal deficits are a long-term negative for the currency as they are inflationary, and considering the US deficit is one of the largest in GDP terms, it poses greater downside risk to the dollar versus other currencies. This will also be a tailwind for the new bull market in stocks.

But shorter-term leading indicators are also dollar negative. On this horizon, the real yield curve gives one of the best leads on the dollar, by about six-to-nine months. This is where the Fed’s pivot comes in.

The real yield curve had been steepening last year, as longer-term real yields were rising more than shorter-term ones, due in part to the influence of rising term premium. That would have anticipated a rising dollar. The real yield curve then began to re-flatten, which continued even after the Fed performed its verbal volte-face in December, as longer-term real yields have risen much less than short-term ones.

The DXY index is up ~2.3% this year, versus the average of 1.4% in the first two months of the year (data back to 1980). But the dollar typically sees all its net gains in the first three months of the year (1.7%) versus an average decline of 0.9% through the remainder.

Net positioning in the dollar is flat, leaving speculators free to move with or against it. They should favor the latter, and not be deterred by recent dollar strength (which is fairly unremarkable), and instead look to the seasonally negative latter three quarters of the year, given extra credence by fiscal and monetary policy that will continue to be a headwind.

Tyler Durden Tue, 02/27/2024 - 12:20

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This Is Nuts – An Entire Market Chasing One Stock

This Is Nuts – An Entire Market Chasing One Stock

Authored by Lance Roberts via RealInvestmentAdvice.com,

“When you sit down with your…

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This Is Nuts – An Entire Market Chasing One Stock

Authored by Lance Roberts via RealInvestmentAdvice.com,

“When you sit down with your portfolio management team, and the first comment made is ‘this is nuts,’ it’s probably time to think about your overall portfolio risk. On Friday, that was how the investment committee both started and ended – ‘this is nuts.’”

 – January 11th, 2020.

revisited that original post a couple of weeks ago as the market approached its 5000 psychological milestone. Since then, the entire market has surged higher following last week’s earnings report from Nvidia (NVDA). The reason I say “this is nuts” is the assumption that all companies were going to grow earnings and revenue at Nvidia’s rate.

Even one of the “always bullish” media outlets took notice, which is notable.

“In a normal functioning market, Nvidia doing amazingly is bad news for competitors such as AMD and Intel. Nvidia is selling more of its chips, meaning fewer sales opportunities for rivals. Shouldn’t their stocks drop? Just because Meta owns and uses some new Nvidia chips, how is that going to positively impact its earnings and cash flow over the next four quarters? Will it at all?

‌The point is that investors are acting irrationally as Nvidia serves up eye-popping financial figures and the hype machine descends on social media. It makes sense until it doesn’t, and that is classic bubble action.” – Yahoo Finance

As Brian Sozzi notes in his article, we may be at the “this is nuts” stage of market exuberance. Such usually coincides with Wall Street analysts stretching to “justify” why paying premiums for companies is “worth it.”

We Can’t All Be Winners

Of course, that is the quintessential underpinning for a market that has reached the “this is nuts” stage. There is little doubt about Nvidia’s earnings and revenue growth rates. However, to maintain that growth pace indefinitely, particularly at 32x price-to-sales, means others like AMD and Intel must lose market share.

However, as shown, numerous companies in the S&P 1500 alone are trading well above 10x price-to-sales. (If you don’t understand why 10x price-to-sales is essential, read this.) Many companies having nothing to do with Nvidia or artificial intelligence, like Wingstop, trade at almost 22x price-to-sales.

Again, if you don’t understand why “this is nuts,” read the linked article above.

However, in the short term, this doesn’t mean the market can’t keep increasing those premiums even further. As Brian concluded in his article:

“Nothing says ‘investing bubble’ like unbridled confidence. It’s that feeling that whatever stock you buy — at whatever price and at whatever time — will only go up forever. This makes you feel like an investing genius and inclined to take on more risk.”

Looking at some current internals tells us that Brian may be correct.

This Is Nuts” Type Of Exuberance

In momentum-driven markets, exuberance and greed can take speculative actions to increasingly further extremes. As markets continue to ratchet new all-time highs, the media drives additional hype by producing commentary like the following.

“Going back to 1954, markets are always higher one year later – the only exception was 2007.”

That is a correct statement. When markets hit all-time highs, they are usually higher 12 months later due to the underlying momentum of the market. But therein lies the rub: what happened next? The table below from Warren Pies tells the tale.

As shown, markets were higher 12 months after new highs were made. However, a lot of money was lost during the next bear market or correction. Except for only four periods, those bear markets occurred within the next 24 to 48 months. Most gains from the previous highs were lost in the subsequent downturn.

Unsurprisingly, investing in the market is not a “risk-free” adventure. While there are many opportunities to make money, there is also a history of wealth devastation. Therefore, understanding the environment you are investing in can help avoid potential capital destruction.

From a technical perspective, markets are exceedingly overbought as investors have rushed back into equities following the correction in 2022. The composite index below comprises nine indicators measured using weekly data. That index is now at levels that have denoted short-term market peaks.

Unsurprisingly, speculative money is chasing the Mega-cap growth and technology stocks. The volume of call options on those stocks is at levels that have previously preceded more significant corrections.

Another way to view the current momentum-driven advance in the market is by measuring the divergence between short and long-term moving averages. Given that moving averages smooth price changes over given periods, the divergences should not deviate significantly from each other over more extended periods. However, as shown below, that changed dramatically following the stimulus-fueled surge in the markets post-pandemic. Currently, the deviation between the weekly moving averages is at levels only previously seen when the Government sent checks to households, overnight lending rates were zero, and the Fed bought $120 billion monthly in bonds. Yet, none of that is happening currently.

Unsurprisingly, with the surge in market prices, investor confidence has surged along with their allocation to equities. The most recent Schwab Survey of bullish sentiment suggests the same.

More than half of traders have a bullish outlook for the first quarter – the highest level of bullishness since 2021

Yes, quite simply, “This is nuts.”

Market Measures Advise Caution

In the short term, over the next 12 months, the market will indeed likely finish the year higher than where it started. That is what the majority of analysis tells us. However, that doesn’t mean that stocks can’t, and won’t, suffer a rather significant correction along the way. The chart below shows retail and professional traders’ 13-week average of net bullish sentiment. You will notice that high sentiment readings often precede market corrections while eventually rising to higher levels.

For example, the last time bullish sentiment was this extreme was in late 2021. Even though the market eventually rallied to all-time highs, it was 2-years before investors got back to even.

Furthermore, the compression of volatility remains a critical near-term concern. While low levels of volatility have become increasingly common since the financial crisis due to the suppression of interest rates and a flood of liquidity, the lack of volatility provides the “fuel” for a market correction.

Combining excessive bullish sentiment and low volatility into a single indicator shows that previous levels were warnings to more bullish investors. Interestingly, Fed rate cuts cause excess sentiment to unwind. This is because rate cuts have historically coincided with financial events and recessions.

While none of this should be surprising, given the current market momentum and bullish psychology, the over-confidence of investors in their decision-making has always had less than desirable outcomes.

No. The markets likely will not crash tomorrow or in the next few months. However, sentiment has reached the “this is nuts” stage. For us, as portfolio managers, such has always been an excellent time to start laying the groundwork to protect our gains.

Lean on your investing experience and all its wrinkles.” – Brian Sozzi

Tyler Durden Tue, 02/27/2024 - 08:11

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“There’s An Odd Chill In The Air” – Dallas Fed Respondents Warn Of “Pending Doom”

"There’s An Odd Chill In The Air" – Dallas Fed Respondents Warn Of "Pending Doom"

For the 22nd straight month, The Dallas Fed’s Manufacturing…

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"There's An Odd Chill In The Air" - Dallas Fed Respondents Warn Of "Pending Doom"

For the 22nd straight month, The Dallas Fed's Manufacturing Survey headline indicator was negative in February.

Despite it's bounce from January lows, the headline remained at -11.3 (while the six-months-ahead forecast also surged to +11.8 - highest since Feb 2022)...

Source: Bloomberg

Under the hood, everything seemed positive too...

Labor market measures suggested growth in employment, Wage and input costs continued to increase this month, while selling prices remained flat. The new orders index - a key measure of demand - shot up 18 points in January to 5.2. The raw materials prices index retreated five points to 15.4, falling further below average and indicative of more modest cost growth than usual.

Source: Bloomberg

So, labor good, prices down, new orders awesome - sounds great right?

Let's ask the business owners in the Dallas area how they feel...

"There's an odd chill in the air that we can't determine if it's election related, general economic malaise or fear of pending doom. It's very strange. Things are status quo with a bit of negative undertone, which is somewhat disturbing for business owners."

"Turmoil at the federal level is impacting funding."

"Sales were below projections for January and February; March does not look encouraging."

"The shortage of labor that was critical during the pandemic and after has turned to being merely very tight—meaning very difficult to find qualified personnel. Job jumping has ground to a halt."

"I have no idea what is going to happen."

"The economy is hurting the trucking business. The uncertainty is bothering people."

"Please lower interest rates."

So, 'the data' is positive, but 'the anecdotes' are a shitshow.

We'll let Jeff Bezos explain which to pay more attention to...

"The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right.

There's something wrong with the way you are measuring it."

One can't help but see the glaring gap between private reality and managed data's sense of it - makes you wonder if there's an agenda at work.

Even Goldman recently admitted that there is vast divide between how happy we should all be based on government-supplied data versus how we actually feel...

Bidenomics!?

Tyler Durden Mon, 02/26/2024 - 12:25

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