MAJOR CHANGES TO VIET HUSTLER

Steve, Linh Hà and the entire VH team greet everyone!

First, Steve and the team would like to thank all readers who have followed Viet Hustler over the past nearly 4 years. Steve started Viet Hustler in 2021 during the COVID period with the goal of providing the Vietnamese community with macroeconomic and market information quickly, concisely, accurately, and most easily understandable. Viet Hustler started from a small personal passion of a student studying abroad and now has become a news channel read by many people every day. However to be able to continue to exist and develop, Steve and the Viet Hustler team really need everyone's support. Starting from August 1, 2024, Viet Hustler will have the following changes:

Frequency and content of articles:

Mid-Day Market - written by Steve himself

Time: Every day during mid-trading session

Content:

• Analysis of important political and economic news of the day

• Observations on mid-session market changes

Equity Research - written by Steve and Thanh Le

Time: Every Saturday

Content:

• General analysis of a notable company on the US Stock Market

• General analysis of investment opportunities and competition in a sector group

PayPal - Continue or Stop?

Macro analysis written by Linh Hà

Time: Every Sunday

Content:

• General analysis of macro data released last week

• Commentary on an important trend in the World economy

Inflation before the FED cuts interest rates

The format of the articles will change starting tomorrow 07/18/2024, hope you all look forward to reading.

In addition, to continue serving readers and ensure article quality, Steve also requests to increase the subscription prices at Viet Hustler as follows:

• Monthly: $5.99 → $8.99

  • Price will change on 08/01

• Yearly: $59.99 → $89.99

  • Currently discounted to $74.99 for those who subscribe before 08/01

• Founding (Yearly): $89.99 or more, for all members who want to support Steve and the Viet Hustler team.

Currently there are only 2.5% of Viet Hustler readers are subscribers with subscription prices unchanged for the past 4 years. To continue maintaining, Viet Hustler will return to subscribers-only from 08/01 with monthly price equivalent to one Starbucks coffee to provide readers with all the necessary daily news. Steve hopes everyone can continue to support Steve and the team.

Trump announces economic plan if re-elected:

• Cut corporate tax to only 15% (currently 21%)

• Appoint Jamie Dimon, current CEO of JPM, as Secretary of the Treasury (US Sect of Treasuries)

• Let Jerome Powell complete his term as Chairman of the Federal Reserve

  • This clearly shows that Trump still respects the independence of the FED

• Eliminate federal land use laws and require states to do the same to serve:

  • Increase housing construction, solve supply issues

  • Increase mineral extraction, especially oil and gas

• Increase taxes on imported goods not only from China

  • This will have a negative impact on inflation in the near term

• Reduce the value of the Dollar and increase export competitiveness

• Raises big questions about protecting Taiwan, “requiring” Taiwan to pay protection costs to the US

  • This statement has caused many negative impacts on semiconductor stocks in today's trading session

Overall, Trump's main economic plan bets on economic growth outpacing debt growth, with a loose fiscal environment and focus on bringing manufacturing back domestically.

With the current budget deficit at -6.4% if Trump is re-elected, economic growth will need to be paired with government spending cuts plus debt restructuring so that economic growth can outpace public debt growth.

Market reaction:

• Chips and semi sector broke down in today's trading session amid fears over Taiwan, with Intel surging in the morning as a US-based manufacturer

• Gold rose in yesterday's session, hit a peak and pulled back today after Trump's dollar devaluation plan

• Banking sector quite pleased with Jamie Dimon's appointment

• Oil companies green due to potential reduction in barriers to domestic oil drilling

• USD weakens

New home starts hit 8-month low

• Total housing starts in June up 3% from May, better than +1.8% forecast

  • May data revised up to -4.6% from -5.5%

• Building permits up +3.4% vs +0.1% expected

  • May figure revised up to -2.8% from -3.8%

However, looking deeper into the report, most construction demand came from the multi-family sector with single-family hits 8-month low

• New single-family homes down -2.2%

• Single-family permits down -2.3%

Mortgage applications recover slightly +3.9% for the week with nationwide average mortgage rate down to 6.87%

Industrial production continues to recover

• June industrial production up +0.6% MoM vs 0.3% expected

  • Manufacturing +0.4%

  • Utilities +2.8%

  • Mining +0.3%

• Notably, industrial capacity utilization at 78.8%

• Most of this growth came from utilities sector, due to high usage demand in summer with computer and electronic products plunge -2.5% in the month

Crude oil prices surge as inventories hit bottom since February

• Crude inventories hit bottom, down -4.87 million barrels last week, much larger than -275,000 expected

• Inventories at lowest since Feb/2024

• US government continues buying into SPR last week with 650,000 barrels

• US crude production continues at all-time high while rig count dips slightly.

Contrary to promises to cut gasoline and release SPR stocks, President Biden's administration is continuing to ramp up production to meet domestic demand and may force OPEC to cut production once more.

Crypto market: SEC ready for Ethereum ETFs to list on 23

According to Bloomberg, the SEC requires the final S-1 filing today to prepare for launch on July 23

Crypto pulls back slightly in today's session after 2 gaining sessions. Note, both Trump and running mate JD Vance have favorable views on Crypto with JD Vance owning Bitcoin.

Earnings report: ASML - "Big" expectations for 2025

• Revenue -10% Y/Y to 6.2B Euro

• Gross margin 51% (flat Y/Y)

• Operating margin 29% (-3pp Y/Y)

• 2024 revenue guidance unchanged from 2023

• Strong outlook projected for 2025

An earnings report that can be called quite disappointing from ASML in particular and overall chip manufacturing demand in Q2 this year. Sales and margins declined while providing rather vague expectations for recovery in 2025.

Market: Buying runs out of gas as index retreats to find support

Big tech and especially the semi sector continue to be de-risked this morning, pulling QQQ down to 483. The trend of rotating money out of big tech has persisted from last week until now and continues to intensify following concerns about demand and political tensions.

VIX surges in the trading session with clear put hedge demand across the market. This is a sign that the market is going through a clear phase of “rebalancing” and “rotation” after most money flowed into Mag 7 over the past year. Something similar happened in September 2020 right before the presidential election.

IWM also pulls back today, with calls skewed too much, IWM call options are simply too expensive compared to the market so this pullback is understandable. This pullback may continue for another day.

Regarding SPX structure, the upper call wall has clearly appeared at level 5700 but the lower levels are still too spread out and no level stands out yet. With today's pullback and SPX trying to defend 5600, these levels will surely consolidate and give us a clearer view of the lower level tomorrow.

On internals, the market is actually quite stable with sell-buy flows not too imbalanced, just allocation shifted significantly between sectors. Banks and Value rebound, while capital exits tech. Yields also break with Trump's “devalue USD” view creating light flow into bonds. Overall, today is a healthy pullback session.