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Closing out Q2: OPEC+ and Restoration Hardware
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The Daily

Closing out Q2: OPEC+ and Restoration Hardware

THURSDAY MARKET UPDATE

Genevieve Roch-Decter, CFA
Jun 30
13
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Closing out Q2: OPEC+ and Restoration Hardware
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Good Morning Everyone!

Remember, every bear market goes down more than many people think it will. It has always recovered. This time is no different.


Prices as of 4 pm EST, 6/29/22; % YTD

MARKET UPDATE

Tomorrow:      Canada Day holiday

Monday:          U.S. Independence Day holiday

The last time the S&P 500 fell 20% in the first half of the year was…..drum roll………February 1970

As we close out Q2

  • Base metals headed for the worst quarterly slump since 2008

  • Oil is heading for its first monthly decline since November 2021

  • U.S. dollar is hitting multi-decade highs.

    • The market is believing Powell is Volcker

Crude  $109    flat

  • OPEC+ meeting today

  • Expect the ministers to confirm already announced 648,000 increase

  • ….which they won’t be able to actually do.

  • Only Saudi Arabia and UAE can produce more but they are restricted under the current OPEC+ agreement

  • The emergency U.S. strategic reserve release will end in October and that’s 1 million b/d

  • The current OPEC+ agreement expires in September. What will the new agreement look like?

Restoration Hardware            -8%      $218

  • Slashing forecast for the 2nd time in less than a month

  • Blaming soaring mortgage rates and shrinking sales of luxury homes

Gary Friedman, CEO and Chairman:

  • “with mortgage rates double last year’s levels, luxury home sales down 18% in Q1

  • and the Federal Reserve’s forecast for another 175 basis point increase to the Fed Funds rate by year end

  • our expectation is that demand will continue to slow throughout the year”

  • RH has not repurchased any shares since announcing the increase of its common stock repurchase on June 2/22

Closer to Home, on concern on Canadian housing, a common WRONG theme over the years

Earnings

  • Constellation Brands

  • Walgreens Boots Alliance

CRYPTO UPDATE

HODL’ers holding more than 1,000 BTC represent ~46% of the total Bitcoin supply

  • These whales have been adding to their positions aggressively throughout the sell-off

    • Acquiring $140k BTC per month

  • “Shrimps”, or investors with > 1 BTC, are also stacking

    • Have been adding at most aggressive rate since March 2020

  • No signs of capitulation yet

Image

SEC rejects Grayscale’s application to convert its flagship trust product to a spot Bitcoin ETF

  • Another one bites the dust

  • SEC cited market manipulation, concerns regarding Tether, and the lack of a “surveillance-sharing agreement between a ‘regulated market of significant size” and a regulated exchange”

  • Grayscale is suing the SEC


MEME OF THE DAY


Here’s a look at the top trending tickers on WallStreetBets over the last 24 hours:

data from Swaggy Stocks

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