Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

While you’re here, join Bespoke Premium with a 30-day trial!

Energy Markets

Winter Storm Elliott (PJM)

A detailed slide deck offering preliminary explanations for the collapse of most of the East Coast’s electrical grid offers some fascinating insight: an unprecedented demand surge came as a wide range of natural gas generators shut off amidst shortages of fuel. [Link; 32 page PDF]

U.S. Department of Energy rejects initial bids to resupply oil stockpile by Richard Valdmanis (Reuters)

A first round of bids to replace crude sold from the SPR has been rejected by the Department of Energy as the government fine-tunes its procedures for the unprecedented management of crude markets that sales and purchases have entailed. [Link]

Vaporware

US farmers win right to repair John Deere equipment by Monica Miller (BBC)

A memorandum of understanding between John Deere and the American Farm Bureau Federation has cleared the way for farmers to repair equipment that breaks down. [Link]

Exclusive: Surveillance Footage of Tesla Crash On SF’s Bay Bridge Hours After Elon Musk Announces “Self-Driving” Feature by Ken Klippenstein (The Intercept)

A Tesla that was using the “Full Self-Driving” feature enabled by Tesla this fall caused a major pile-up on a San Francisco freeway when it abruptly braked and moved in to another lane. [Link]

Food & Drink

Digital nomads now come first for Mexico City’s gig workers by Samuel Burleigh and Stpehania Corpi Arnaud (Rest of World)

Lured by the lower cost of living and high quality amenities that elite enclaves offer within Mexico City, foreign digital nomads are making waves with their bland tastes. [Link]

A Nonalcoholic Amaro ‘Falso’ From St. Agrestis by Florence Fabricant (NYT)

The latest offering for dry January is a zero-ABV “amaro” that mixes bitter botanicals and a hint of carbonation to replace the alcoholic version. [Link; soft paywall]

Banking

JPMorgan claims entrepreneur Charlie Javice duped bank into buying $175M startup: suit by Ariel Zilber (NYPost)

A financial planning site purchased by JPMorgan in 2021 overstated its customer count by almost 4mm, defrauding the bank in the course of its acquisition. [Link]

Goldman Sachs Advises Investors To Go Risk-Free In 2023 by Tracey Longo (Financial Advisor Magazine)

High yields in money market funds are stiff competition for risk assets per a Goldman Sachs analysis that advocates for skepticism towards risk assets this despite a torrid start to the year. [Link]

Chinese Bank Offers Customers Free mRNA Vaccine in Return for $500,000 Deposit (Bloomberg)

“Tier 3” customers get the luxury treatment, including not only top-of-the-line COVID vaccines but also discounts at the Four Seasons a chance to test drive a Bentley. [Link]

Solutions

The ozone layer is on track to recover within decades as harmful chemicals are phased out, scientists report by Laura Paddison (CNN)

An international treaty has led to a 99% decline in the use of chemicals that deplete the ozone layer has been wildly successful, with expectations for full recovery by 2040. The results offer a hopeful model for climate action, including via geoengineering. [Link]

Riddle solved: Why was Roman concrete so durable? by David L. Chandler (MIT News)

Roman concrete included chunks of calcium carbonate thanks to its high-temperature manufacturing process. The result was a much stronger concrete than anything produced today. [Link]

House of Mouse

Disney Revises Pricing Policies at Its Parks by Brooks Barnes (NYT)

Theme parks will cut parking fees and reduce the number of park days offered at their lowest price but management insists they aren’t a reflection of softer demand. [Link; soft paywall]

Options Mania

Higher Rates and Tech Selloff Fuel Options Boom by Eric Wallerstein (WSJ)

The surge in options activity during the huge post-COVID bull market is sticking around, as investors are finding the derivatives just as useful for speculation to the downside as the upside. [Link; paywall]

Read Bespoke’s most actionable market research by joining Bespoke Premium today!  Get started here.

Have a great weekend!

The S&P 500 has rallied impressively in the past week leading up to Thursday’s CPI print, and bullish sentiment has lifted along with it.  While the reading remains low, the percentage of respondents to the weekly AAII sentiment survey reporting as bullish rose from 20.5% up to 24%.  Bulls were higher only two weeks ago when the reading was at 26.5%

That rise in bulls has meant bearish sentiment has fallen to a notable level. For the first time since the first week of November and for only the eleventh time in the past year, bearish sentiment came in below 40%. Bearish sentiment has now fallen for three weeks in a row, which is the longest streak of consecutive declines since last August as well.

Although bullish and bearish sentiment are sending a more optimistic tone, the bull-bear spread remains heavily in favor of bears at -15.9. That grows the record streak of negative readings to 41 weeks in a row.

Last week, neutral sentiment leaped higher given the mid-single-digit declines in bulls and bears.  Some of that move was given back this week with only 36% reporting as neutral. However, that remains an elevated reading at 4.6 percentage points above the historical average.  Click here to learn more about Bespoke’s premium stock market research service.

Initial jobless claims posted another low reading in the latest print, with national seasonally adjusted claims totaling only 205K.  That was down slightly from 206K the previous week; a number revised up by 2K. After that revision, this week’s reading was the strongest showing for claims since the end of September.

Before seasonal adjustment, claims were considerably higher at 339.29K.  At the end of the year and in the first weeks of a new year, claims tend to experience a significant seasonal increase which appears to be playing out in the current environment. This year’s reading is in line with the comparable weeks of the few years prior to the pandemic. As we also noted last week, this time of year tends to see the largest revisions in claims as well. In other words, from a seasonal perspective, claims can be a bit volatile in terms of actual levels and revised levels. So while the seasonally adjusted reading was solid and the non-seasonally adjusted number is nothing too concerning, the next several weeks will likely provide a clearer reading on how claims are trending.

Turning to continuing claims, this week’s print covered the final week of 2022.  Like initial claims, the end of the year saw declines in continuing claims with the latest reading falling to a low of 1.634 million; the strongest level since the week of November 19th.  Although that is a solid improvement following multiple months of claims rising rapidly, similary to initial claims, more weeks of data will help to provide a clearer picture given the effects of seasonality during the holidays.

We would also note, that although the drop in claims over the past two weeks has only put a small dent in the recent rise in claims, the 4.89% decline is historically large.  That drop impressively ranks in the bottom 3% of all 2-week moves on record.    Click here to learn more about Bespoke’s premium stock market research service.