#MakeAmericaNormalWeightAgain

🧠 The Big Brain
China Makes The List

Loads going on in China that nobody really seems to be paying attention to…

Understandable considering everything else ~waves hands dramatically~ that’s going on in the world right now.

However, there’s a bunch of factors that are catching the eye, and making us wonder about the prospects of a bounce in Chinese stocks.

Rumours of a stock stabilisation fund hit newswires today.

Although the numbers involved aren’t huge, it could be another sign that Chinese authorities are getting ready to act.

Lots of Chinese stocks looking very weak…

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⚡ The Spark
More Yield Pain Ahead

We’ve seen massive moves in US bond yields over the past few months.

The Fed’s delighted with this as it means they don’t have to do any work can let term premium and lags carry the load.

Patrick Harker explains why rate hikes are probably done:

Gonna try this approach with the boss…

“yeah not doing anything today because I’m waiting for the lags from last years work to kick in - I’m still doing something, quite a lot, actually.”

Nah it’s genuine.

They don’t really need to do more right now.

Obviously If inflation spikes again, all bets are off.

For now though, the Fed’s winning, and they might get a little help from Auntie Janet in the Treasury Department.

See, there’s still so much borrowing to be funded, it’s hard to keep bond yields down.

TBAC (Treasury Borrowing Advisory Committee) recommends issuing nearly 340 BILLION of bonds in Q4:

And yesterday’s 30 year auction was horrific, adding to the terrible results earlier in the week.

Here’s what Newsquawk said…

Translation: Not enough demand, so the bonds had to be discounted to shift ‘em (& 3.7bps is big for treasury auctions).

Bid to cover is another gauge of demand. The ratio of the amount of bids in the auction vs the amount of bonds sold.

Nobody else wants (enough of) them, so they’re dumped on the dealers.

If buyers aren’t tempted at these yields, the supply mismatch could force yields even higher to close out the year.

Unless it all kicks off with a proxy war or a sudden economic downturn…

Keep a close eye on the auction results over the next few months.

💡 The Lightbulb
#MakeAmericaNormalWeightAgain

Ozempic, Wegovy and Rybelsus are probably names you have heard mentioned of late, right?

They’re all part of the semagluditde revolution that is taking the world (well, the US, where it’s most needed) by storm to try and counteract Project Fat™ from the food and drink makers.

Networks: but there’s an entire ecosystem being developed at the moment to do with the whole GLP-1 (semaglutide) product.

Y’know… insurers, drug companies, food companies and the end consumer, naturally.

There’s so much opportunity here it’s pretty insane.

The trick: so let me let you into a little secret…

It’s going to be just like the opioid epidemic for drug makers.

See, there is no way people sustain taking GLP-1s forever…

What will happen is the second they come off it when they inevitably think they have succeeded with their fat loss, the weight piles back on.

The opportunity is in the hype — provide it as a completely viable source of weight loss, but fall back on the opportunity of human habits overriding the actual success rate.

You want that. The more returning customers the better unfortunately!

And check this out: $UNH United Health Group has JUST today said they will add 1 MILLION new insurance customers next year and reduce the price of GLP-1 medication.

Remix: simply read this as ‘reduce the barriers to entry,’ since unfortunately, more obese people are of lower incomes with worse health insurance policies in the US.

And for us as traders/investors, looking at a thematic play on this, an insurer might be a decent bet (definitely check them out), but we reckon our way of looking at this will be better since there are a few assets involved with some nice hedging potential — so subscribe to get it next week!