OSINT Drip 6-21-2021
United States
The Federal Reserve ended its two-day meeting on Wednesday by flagging an accelerated timeframe for raising interest rates and acknowledging “notably” higher expectations for this year’s inflation. “Inflation has increased notably in recent months,” Powell said at a press conference that capped the FOMC meeting, adding that the Fed’s preferred inflation gauge, the personal consumption expenditures index “will likely remain elevated in coming months before moderating.”
Headline inflation remained at 5% and core inflation at 3.8% in an economy that resumed faster and stronger than the Fed expected, partly due to the impressive rate of Americans being vaccinated.
Following the announcement, the Dow fell more than 380 points or 1.1%, and the S&P 500 and Nasdaq Composite both dropped as much as 1% and 1.2%, respectively.
The Commerce Department report on June-17 - 2021 that builders broke ground on new apartments and single-family homes last month at a seasonally adjusted annual rate of 1.64 million units. Google Trends also confirms the interest in apartments is the highest it’s been in five years. Meanwhile, the trajectory of those searching for Mortgage Loans was the opposite, although there was a slight upward trend recently.
Global - Trade Growth and Bottlenecks
One of China’s busiest ports announced it wouldn’t accept new export containers in late May because of a Covid-19 outbreak, it was supposed to be up and running again in a few days. “It’s taking longer for shipping to recover than what was expected a few months ago, but I’m hopeful that going into the fourth quarter in 2021 and the first quarter in 2022 we will see the resumption of activity in many parts of the global economy and certainly a normalization of some of the challenges we face in shipping.” Support quality journalism and subscribe to Business Standard.
There are currently 139 container vessels anchored off the coast of China, about 50 percent more than the average from mid-April to early May, according to Bloomberg analysis of vessel data.
Drewry Shipping data released Thursday showed no let-up as container rates on several routes kept climbing, including an increase to $11,196 for a 40-foot box to Rotterdam from Shanghai.
In other trade news, TradeLens, a joint initiative between IBM and Maersk that aims to digitize the paperwork in the container shipping industry through blockchain, announced that more than ten members have joined the network in China following its launch in the region on May 10. Using IBM technologies, the joint initiative with Maersk promotes a platform for participants in global trade to safely share information and collaborate digitally. As of today, the solution has tracked 42 million container shipments and digitized 20 million documents.
Global Trade
The Economist Intelligence Unit forecasts that total global trade volumes will recover by 8% in 2021, from an estimated contraction of 8.1% in 2020.
Analysts expect China’s state metal sales to be relatively small - around 300,000-500,000 tonnes for aluminum - and to decrease as prices come down.
Stockpiles in warehouses registered with the Shanghai Futures Exchange fell by 8,440 tonnes to 172,527 tonnes in the week to Friday.
China’s exports to the US in Q1 rose 62.7%, while imports from the US increased by 57.9%.
To think about….
There has been much talk about bias in machines and models. While there are technical aspects to consider, our position is that people need to consider the alternative - human bias. For example, research shows people will invest in bad financial managers that lose them money but are attractive. If you want to know more about “Noise” have a listen to Michael Shermer’s Podcast with Nobel Laureate and overall legend Dan Kahneman.
Biden introduced S. 3891, which is to Advancing Artificial Intelligence Research Act of 2020. S. 3891 would authorize the annual appropriation of $250 million over the 2021-2025 period for the National Institute of Science and Technology (NIST) to establish an artificial intelligence (AI) research program. The bill also would designate up to six centers for AI research and obligate up to $50 million annually over the same period for each center. The bill also would direct the National Science Foundation to designate up to six centers for AI.
Portfolio Performance
After our June 2nd batch of equities, we have identified 21 stocks to date (SPWR appeared on both the May 14th list and the June 2nd list). The average hold time for those equities has been just under 16 days (includes non-trading days). The simple average return of the positions has been 6.45%, with 16 of the 21 selections generating positive returns ranging up to 34.5% (MRNA). The returns of our levered portfolio currently exceed 43%. We have closed out all positions to date, except those entered into based on the latest Drip.
This Weeks Picks
...None. We are holding. But will be back next week.
We hope you find the intelligence helpful. Please reach out to hello@bridgeci.co with questions or suggestions. Prior OSINT Drips are below.