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Fifteen years ago 10,000 bitcoin bought two pizzas. Now that could buy Papa John’s. (0:15) Existing home sales unexpectedly drop. (1:03) Solar stocks get hammered. (3:19)
This is an abridged transcript of the podcast:
Our top story so far, fifteen years ago today, 10,000 bitcoins bought you two Papa John’s pizzas. Now that could buy you Papa John’s (PZZA).
Bitcoin (BTC-USD) is setting new highs on the 15th anniversary of the famous crypto pizza transaction that started it all.
On May 22, 2010, early adopter and miner Laszlo Hanyecz bought two large Papa John’s pizzas for 10,000 BTC, signaling the potential for real-world purchases and bitcoin as a medium of exchange.
At the time, BTC was only a small development among technophiles and gamers. This morning, it rose as high as $111,700.
So, those 10,000 bitcoins that bought two pizzas would be worth more than $1.1 billion today – almost enough to buy the entire Papa John’s company, whose market cap stands at $1.34 billion.
On the economic front, U.S. existing home sales dipped 0.5% M/M to an annual rate of 4 million in April, compared with the 4.13 million consensus and 4.02 million.
The median existing-home sales price increased 1.8% Y/Y to $414,000. The Northeast and Midwest saw price increases, while home prices fell in the South and West regions.
Pantheon Macro economist Samuel Tombs says: “Housing market activity remains lethargic, primarily due to the gulf between new mortgage rates – nearly 7% right now – and the average 4% rate on existing mortgages.”
“The tariff announcements and environment of heightened economic policy uncertainty also have made people less willing to make large financial commitments,” he added.
In the markets, Treasury yields are calling the shots as concerns about U.S. fiscal direction mount. The GOP budget bill passed the House by a narrow margin this morning and will go to the Senate.
According to the Congressional Budget Office, the proposed tax changes would increase the federal deficit by an estimated $3.8T over the next decade.
The 10-year yield (US10Y) is taking a breather, trading around 4.6% following a spike in the previous session prompted by a weak 20-year auction.
George Saravelos, head of FX research at Deutsche Bank, says: “The most troubling part of the market reaction (to the auction) is that the dollar (DXY) is weakening at the same time. To us this is a clear signal of a foreign buyer’s strike on US assets and the associated US fiscal risks we have been warning for some time.”
“It is hard for US equities to stay resilient in this environment,” he added. “The 2023-24 period saw a combined rise in US yields and equities as the market was revising US growth expectations higher. This was entirely reasonable. Today is very different.”
“It is all a building fiscal risk premium in to US assets. It is hard to make the case that such a (negative) driver of the rising cost of capital is positive for risk assets.”
Among active stocks, Snowflake (SNOW) is rallying as analysts praised its strong first quarter and increased guidance, which they say are evidence that its new products and the changes the company made to its sales operation are resonating with customers.
Jefferies analyst Brent Thill said the results were an “all-around clean print” and evidence that new product momentum is picking up, specifically citing Snowpark and Dynamic Tables.
Solar company shares including Sunrun (RUN), Enerphase Energy (ENPH) and SolarEdge Technologies (SEDG) are being taken to the woodshed, with the aforementioned tax and spending bill possibly ending numerous clean energy subsidies.
Among the changes included in the were revised language that would end certain tax credits for solar and wind energy by 2028 instead of a slower phaseout through 2031. In the new proposed timeline, solar or wind projects must begin construction within 60 days of the bill’s enactment and finish construction by year-end 2028 to remain eligible for tax credits. The legislation also would remove the 30% federal tax credit for taxpayers who install solar rooftop systems.
And for the first time in three years, Urban Outfitters (URBN) reported comparable sales growth in all three banners, including an inflection to positive growth in the Urban Outfitters brand.
This contributed to consolidated same-store sales growth of 5% for the first quarter, beating expectations of 3.4% growth, and contributing to a big rally.
And in the Wall Street Research Corner, Morgan Stanley looked at the latest batch of 13F flings to determine the most crowded hedge fund longs.
Those are the 25 Russell 1000 stocks with the highest percentage of public float owned by hedgies.
Todd Castagno, head of Global Valuation, Accounting and Tax, says: “Crowded trades come with the risk of overvaluation and increased volatility as it may be more difficult to attract the marginal investor, while avoiding overcrowded stocks can provide investors with an opportunity to capture unrecognized value when paired with strong fundamentals.”
Avis Budget (CAR) tops the list with a little more than half of the float owned by hedge funds.
Rounding out the top 10 are Loar Holdings (LOAR), Howard Hughes (HHH), Janus Henderson Group (JHG), Wendy’s (WEN), Incyte (INCY), Exelixis (EXEL), Formula One Group (FWONA), QuidelOrtho (QDEL) and Lyft (LYFT).
Check out the rest of the 25 here.
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