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.

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Tech Wreck

Masayoshi Son owes SoftBank $4.7bn as side deals go sour (National News/Bloomberg)

The Japanese tech investor borrowed heavily from his own company to invest in hyper-aggressive tech funds he operated. The result is billions of losses from the world’s most optimistic buyer of technology companies. [Link]

Elon Musk Fires Twitter Employees Who Criticized Him by Kate Conger, Ryan Mac and Mike Isaac (NYT)

As the intemperate billionaire seeks to put his stamp on the social networking site, staff are being shown the door for any criticism of the boss, on top of other headcount reductions and mass departures of employees uninterested in ultimatums. [Link; soft paywall]

Battery Industrialization

The Battery Supply Chain Is Finally Coming to America by Tom Randall (Bloomberg)

With booming demand for large scale battery packs and fresh industrial policy creating huge incentives to produce batteries inside the US, domestic manufacturing of batteries is finally starting to scale up with downstream benefits for companies that make components in the US. [Link; soft paywall]

Carmakers switch to direct deals with miners to power electric vehicles by Harry Dempsey and Peter Campbell (FT)

In order to make sure they have sufficient supply, auto manufacturers are setting up joint ventures with battery makers and going straight to mines to buy input materials, a sort of vertical integration that harkens back to an earlier period for the global auto industry. [Link; paywall]

World Cup

World Cup Brings Two Million Visitors and an Epic Culture Clash to Qatar by Rory Jones, Stephen Kalin, and Joshua Robinson (WSJ)

Less than a week before the start of the World Cup, Qatar is proving an unreliable and downright uncomfortable host for the World Cup. [Link; paywall]

Qatar World Cup Faces New Edict: Hide the Beer by Tariq Panja (NYT)

Nothing goes together like the beautiful game and beer, but Qatar World Cup organizers are moving the goal as kickoff approaches in a confusing series of decisions that may keep fans from their brews. [Link; soft paywall]

The FTX Collapse

FTX Chapter 11 First Day Affidavit by Jon Wu (ThreadReader)

A step-by-step walk-through of the Chapter 11 filing offered by FTX as the exchange collapsed. The allegations are nothing short of shocking and reveal staggering malfeasance. [Link]

What happened at Alameda Research (milky eggs)

A detailed discussion of the collapse of Alameda Research, the FTX affiliate that was the alleged recipient of funding that blew a massive hole in the balance sheet of the exchange. [Link]

Let crypto burn by Stephen Cecchetti and Kim Schoenholtz (FTAV)

We don’t necessarily subscribe to this argument, but a thought-provoking call for regulators to let the crypto ecosystem collapse under its own weight and not offer any of the stability or legitimacy that comes from regulation. [Link; registration required]

Innovation

Stagnant Scientific Productivity Holding Back Growth by Greg Ip (WSJ)

The US spends a record share of GDP on research and development, but the long-term benefits of big investment in speculative technology or ideas has been illusory so far. [Link; paywall]

Your Phone Can Determine If a Bridge Is Busted by Matt Simon (Wired)

Phones inside the cars of drivers on the Golden Gate Bridge were used to identify and monitor the “modal frequency” of the bridge, providing a potential source of early warning for bridge collapses. [Link]

Wall Street Weakness

Wall Street Bonuses to Plunge as Much as 45% for Bankers – Study (US News/Reuters)

Crashing deal volumes after a massive run in 2020 and 2021 are going to lead to a famine for deal-driven bonuses at Wall Street investment banks. [Link]

Office Space

EY Future Workplace Index reveals surprisingly rosy attitudes on commercial real estate investment despite economic tightening (PRNewswire)

While the economy appears to be slowing and office demand doesn’t look spectacular, this new survey data shows surprisingly robust demand for office space and real estate more generally. [Link]

How We Spend It

6 Graphs Everyone Needs To See by Sahil Bloom (ThreadReader)

Time spent with friends and family eventually shifts towards time spent with children and coworkers. By the end of life, Americans are spending more than half of their waking hours alone. [Link]

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Have a great weekend!

It has been quite the week for Chinese stocks as stimulus and optimism over the easing of COVID restrictions has investors and traders buying up stocks leveraged to China.  The Kraneshares China Internet ETF (KWEB) was up over 11% heading into today which was the best week for the ETF…in two weeks!  If the gains for KWEB heading into today hold up through the end of the session, the four best weeks in KWEB’s history dating back to 2013 will have all occurred this year!

In addition to having two separate weekly gains of over 10% in November, KWEB is also on pace for its third straight weekly gain of 5% or more. In the ETF’s nearly 10-year history, there has never been another streak of three weeks where the ETF has rallied 5% or more.  It’s also interesting to note that three of the ETF’s five streaks of two or more weeks in a row have all come since the ETF peaked in February 2021.

An old maxim of markets is that big upside moves usually happen in bear markets, and the action in KWEB this year is a textbook example.  Despite the ETF having its four best weeks on record this year, and two separate streaks where the ETF was up 5% or more in at least two consecutive weeks, KWEB is still down over 25% YTD and is more than 70% from its high less than two years ago. Click here to learn more about Bespoke’s premium stock market research service.

As we noted last week, this week’s sentiment data is the first to encapsulate any reaction to last week’s CPI number as well as the subsequent market rally.  Although price action has been somewhat choppy and there have been plenty of other catalysts (FTX’s collapse, more yield curve inversions, the missile strike in Poland) to balance out the inflation data and put investors back onto their heels, the latest AAII survey has shown a surge in bullish sentiment. The percentage of respondents reporting as optimistic jumped from 25.1% last week up to 33.5% this week.  That is not only the largest one-week increase since the first week of June (when bulls rose by 12.2  percentage points) but is now the highest reading on bulls since the last week of 2021.

Bearish sentiment in turn dropped sharply falling to 40.2% for a decline of 6.8 percentage points.  While an improvement, at the start of the month bearish sentiment had fallen by much more (both the last week of October and the first week of November saw double-digit week-over-week declines) and was at a much lower level of 32.9%.

The bull-bear spread has narrowed but still remains negative for the 33rd week in a row.  If the spread remains negative into next week, it will tie the record streak from 2020.

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Neutral sentiment fell for a second week in a row with the total decline in that time eclipsing 10 percentage points. At 26.3%, it is down to the lowest level since the week of October 20th, implying that investors have become a bit more decisive in their respective market views.

The AAII survey’s more bullish turn this week was also seen in other readings on sentiment like the Investors Intelligence survey and the NAAIM Exposure Index.  As a result, our sentiment composite which aggregates the findings of the three surveys into a single sentiment reading is back up to its highest reading since mid-August.  Although the reading remains negative, it is no longer at the extreme levels that were common earlier this year. Click here to learn more about Bespoke’s premium stock market research service.