The Week Ahead
Volume 101 - Apple officially in the race
It was a great week for paid subscribers last week with the AAPL 06/21 195C, which we paid 3.8 for, and trimmed the majority for >20 still holding 10% of the original position to potentially take delivery of the underlying… Not only this we got long ADBE at 456.75 (5% weight) back in early June and trimmed it down to a 2% weight after the earnings spike for a 14.5% gain. After the Fed on Thursday morning, I said “I think there’s opportunity buying the USD dip. Carry still very attractive and still a great hedge” - thus far this dip buy has worked. Friday, I was off as my eldest dog sadly was put to sleep; subscribers had a 5420/5430 bull put at -6.4, which expired for max gain. Still hold the long position in oil, paid 74.8, which is now 78.22… (going to roll it out to Aug contract).
For core positions META and GOOGL. META is back at the highs nearly and was +2.27% last week. GOOGL somehow closed the week green +1.34%. Without going into too much detail, I think that GOOGL lost out with the AAPL AI. In my opinion, they literally should have been paying AAPL to use Gemini. AAPL chose the industry leader, though have left the door open to other models. The irony of it all is that Google is financing the use of OpenAI with the $20B they pay AAPL per annum.
I couldn’t have asked for a better week performance-wise, but I would give it all back to have my dog here with me.
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FX
We will start with FX, as there is not all that much to discuss, and my stance hasn’t changed. What better way to start the Euros than with the euro getting sold? Fresh political risk premia and cuts are one way to see the EUR crack through that 1.06 level to (finally) explore 1.05. Always remember that CHF is Europe’s safe haven currency during times of uncertainty.
Although I remain long USD/JPY, with recent EUR weakness and USD/JPY heading towards 160, I am considering selling EUR/JPY. I haven't decided on the entry just yet, as I can see the recent dip being bought, but I might look to sell at the 170-171 area with a 173.5 stop and 160 target. Positioning shows that there’s plenty of room for EUR shorts to be added to, too. I will touch base on this more when it gets to a more attractive level to short.
Still, hold the cable short… can see a small dip down to 1.25 in the coming fortnight.
The same rule applies to the greenback, as it has all year. Carry is still attractive; own it. It is still a great all-round hedge, and with the recent FOMC hawkish surprise of a one-cut median on the dots for 2024, the dollar should be well supported and bid back to the YTD highs.
Single Stocks, Index and Vol
CCL…