Finally some good news on the energy front: Saudi Arabia is poised to increase output, and oil is trading down 2.5% in response. Risk assets are trading up approximately 50 basis points across the board, including even Gold. BTC is up slightly trading just below the psychological $30,000 threshold. Bitcoin has held up well over the last month, which is unsurprising. New technologies often proliferate then become an oligopoly - crypto is no different. We don't need 400 different coins, and one would expect that 15 or 20 coins start to dominate. You are seeing the beginning of this trend, and its becoming increasingly clear that stablecoins will be regulated, we just don't know if the announcement is 2022 or 2023.

News has been a bit scant recently, with Memorial Day slowing things down in the USA and now the Queen's Jubilee Holiday slowing things down in London. The big news late yesterday is that both Johhny Depp & Amber Heard were slanderous, but Johnny netted out almost $10 million richer, before attorney's fees of-course. The other big news was that Sheryl Sandberg is out at Facebook, and that FB is changing their ticker to META next week. Providing you with daily news and daily insightful analysis is an interesting and enjoyable task, but we are taking this holiday period to remind readers that:

• There is always News

• Most news is Noise

• Signal to Noise ratios are generally low

At this juncture, its likely that META can get someone more knowledgeable about current trends, someone more energetic, and someone cheaper than the $35 million she was paid last year. Seeing Sandberg's news at the very top of WSJ.com was a sign that there isn't much going on right now. No elections, Ukraine is more of the same, and earnings season is over.

Now is actually a good time to talk with all your friends about their spending patterns. Are they cutting back to offset huge increases in food, energy and rent? Sometimes this is the best way to get good unbiased information, as the news media is not designed to help your portfolio. In late 2020, a friend who was CEO of a 1,000 employee Boston based money manager told us that his employees had emphatically told him that they were never coming back to the office full time. At the time, 1/2 the news stories were saying that the office was dead & the other 1/2 were saying that work-from-home was temporary. Talking with a real data point made it clear that if the employees of this one particular firm were not coming back, then most other firms would not be either. So talk to your friends about their spending in response to the food, energy & housing situation - you will get an accurate economic picture for that demographic and won't need to worry about different "experts" pontificating daily. Of course, to get a pulse on the economy, you would need to talk with all the different demographics: rich & poor, young & old, etc.

No surprise, but, according to a release by realtor.com finally new home inventory is starting to rise. Things are still tight, with inventory 48% lower than May 2020, but inventory is rising in most parts of the country as people are trying to cash in on higher prices:

The median national asking price is $447,000 after just crossing $400,000 just in March. Wow. Of course, these are just asking prices, but low inventory, interest rates still at a reasonable level, and high asking prices mean that we are still in a sellers market. Homebuilding stocks look pretty juicy, trading around 5x earnings. PHM is $45 with 2022 earnings estimates of $10.97. Historically homebuilding has been cyclical, but PHM is projected to earn $11.65 in 2023. Homebuilders are growth cyclicals as opposed to autos or airlines that go negative and are truly cyclical. If you hold PHM for 5 years, there is no reason you couldn't sell that stock for 10 times $15 earnings in 2027. The homebuilders are not exactly AAPL of 7 years ago, where you could buy all that growth & cash flow for 12x earnings, but its a similar situation - quality companies making a semi-scarce product in high demand with pricing power and other tailwinds. Don't like Pulte? How about Lennar-B shares where you can buy a vote plus $17 of earnings for $67? Don't like Lennar? How about DH Horton? DHI is $76 for $17.47 of earnings. You wish you bought energy stocks in 2020? Well, now is your chance to buy homebuilders.

Yesterday's market action was strange indeed: the morning was positive, then everything got crushed, ostensibly in response to Jamie Dimon's statement that they are preparing for an economic hurricane. Dimon does have inside information, but he doesn't have information about the future. Remember when he said that bitcoin was going to be worthless? Dimon's comments on the present are valuable but his prognositications about the future are just monkey darts. Our main message in today's note is that there is a lot of noise out there and not too much signal.

Shanghai is finally open. Yesterday there were 2.7 million trips on the subway, up from 0.04 million the day before. Normal for Shanghai is 10 to 12 million trips, so this is good news that Shanghai is finally opening.

Earnings are still displaying the bipolar pattern. Hewlett Packard enterprises is down -8% premarket but Chewy (online pet products) is up 16%. Now is a good time to do your own research - corroborate what you read. For example, we hired a gent to remodel our bathroom. Yesterday he told me that the lead times on everything was 6 weeks. I went on Wayfair and found tons of acceptable materials for delivery in 3 to 10 days. Our bathroom remodel guys is a true Mensa genius - he was a lead mechanical engineer for a few companies in the UK but couldn't get a job when his wife relocated to the USA, so he fixes boats engines now. He can do everything in the house: plumbing, electrical and great finish work. He is a savant who is literally brilliant in many topics. But he thinks the lead time on building materials is 6 to 8 weeks. Well, let me tell you something: we are ordering building materials in both Europe and the USA and lead times are a week. We have ordered structural steel, rented heavy equipment, bought all types of tools, purchased both bespoke windows & off-the-shelf windows, roofing tiles, cement, dumpsters etc. The off the shelf windows have a lead time of 10 minutes and bespoke windows are 6 weeks, including the time for measuring and installation. You can allocate capital on what you read in the news, or you can verify before investing. Invest then investigate is not a strategy. Everyone knows there is a lot of bad news out there. Try and triangulate data points to get the correct answers. If the future is murky, don't predict it.

Again yesterday Amazon and Google were much stronger than the overall market. Now is a good time to pay attention to breadth. Look at the S&P yesterday:

Google was up a few basis points and Amazon was up 1.2% in an otherwise negative tape. The flight to "safety" is still happening. The market won't bottom until breadth improves.

Finally, the ten year bond is creeping up again:

See our recent note: the recent action in treasuries and copper are cause for concern. In a world with not too much good news right now, the Jubilee celebration in the UK is a good diversion. Lets tip our hat to the Queen of England for 70 years of grace - if we can all try to emulate her combination of perseverance and grace, things will improve. London trading will be quiet for the rest of the week - trust us, the UK is treating this celebration as a major liquidity event :-)