Trump exits briefing after shooting near White House

President Trump had to be abruptly evacuated from the White House briefing room by security yesterday as shots were fired outside the White House. However he came back to complete his briefing and didn’t seem rattled at all. He was all praises for his security team and it almost implied that the only people who are working in the country are his security team and himself.

It was total pandemonium at the house of Kodak. On Jul 29, Kodak was awarded a $765 million loan to produce critical pharmaceutical ingredients for the pandemic response. The shares moved up from $2 to $60. But the stocks actually started moving up on 27th July. To add fuel to the fire, the top management was awarded stock options ahead of the announcement as well. You know how these things work out.

Now, the SEC is involved and so is the DFC (Developement Finance Corporation) and the whole thing is on hold and no money will be paid out by the DFC until this mess is resolved. The stock is down by 82%.

Twitter has reportedly thrown their hat down in a bidding war with Microsoft for TikTok. My hunch is that it will be a better fit for Twitter but Microsoft may have better leverage and cash to pay. Twitter also doesn’t have any presence in China which works well for them whereas Microsoft has about 6,000 employees in China.

Will be interesting to see how this will finally play out. TikTok doesn’t have much of a choice. They are at the mercy of the US administration.

Equities

Sentiment remains at multi decade extremes. The 30 day CBOE put/call ratio is at .469. This is a 20 year low for the ratio. The last time option traders purchased this level of calls relative to puts was in Sep 2000. The bear market that came after that wiped out 51% of the market value in S&P 500. We are not saying the ratio still cannot move more lower but we are in dangerous zone.

Bonds

According to the structure a trend reversal can start anytime.

Euro

No change in the Euro view since the last report.

Gold

Gold’s move down so far is playing out well from its highs of 2072 last week. It has come down in a five wave pattern implying the move down is impulsive. Further move down should take it to 1960 to 1980. For this pattern to play out, it is important Gold remains under 2072 but we are more hopeful.

Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office and a hedge fund.