9th Week’s a Charm | The Daily Peel | 5/27/22

Market Snapshot

Futures yesterday morning pointed towards gains in the broader markets. Bit-c and Eth dipped. Crude climbed above $114, and the 10-year closed at 2.75%.

When the closing bell rang, the Dow was up 1.61%, the S&P had climbed 1.99%, and the Nasdaq was up 2.68%.

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For today’s first respondent with the correct answer to our brain teaser, we will mail you a sick Wall Street Oasis t-shirt.

Let’s get into it.

Banana Bits

You can buy clothes in an Amazon store now, apparently
Russia’s government is wheelin’ and dealin’ to keep its economy afloat
Fed’s Brainard to attest that a digital dollar could coexist with stablecoins
Airbnb is pulling out of China
If you can’t use excel without a mouse, there are resources out there for you

Banana Brain Teaser

The answer to yesterday’s BBT was that he was playing monopoly.

For today’s first respondent with the correct answer, we will mail you a sick Wall Street Oasis t-shirt. Good luck!

How many months of the year have 28 days?

Shoot us your guesses at [email protected] with the subject line "Banana Brain Teaser" or simply click here to reply!

Macro Monkey Says

Retail’s Wild Ride — Some fancy pants (literally) retailers like Macy’s, Nordstrom, and Best Buy have posted solid earnings this quarter, and we are seeing low-budget dollar store names make solid money; there is a bit of a disconnect.

The winners are in the places that consumers want now. Electronics, home improvement, cheap groceries.

The losers, like Wally and Target, as well as the world’s largest retailer ($AMZN, smartypants), are battered after their most recent earnings calls.

After hearing a mixed bag of guidance, it makes you wonder: who is right in their predictions?

The Macy’s and Nordstroms of the world would make you think that the affluent customer is still spending money, less affected by inflation.

The Wallies and Targets would make you think that the consumer is being pinched by it and that demand is softening in a hurry.

I tend to believe that pent-up demand was still a thing in this most recent quarter and that the consumer cared a lot less about their next dollar at the beginning of that quarter than they do today.

That being said, these retailers are experiencing shitcoin-esque volatility before and after their earnings calls. High volumes, big price swings… everything I was taught to love as a trader.

Is this wild ride a symptom of something bigger? These are companies that make their money catering to people - yes, even some of you, Apes.

The consumer is the engine of the Main Street economy. Where their money goes, so does economic prosperity. Here’s to hoping we’re not already in a recession.

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What's Ripe

Macy’s ($M) — Similar to Nordstrom, the shopping mall staple Macy’s had a stellar quarter. After a beat on the top and bottom line yesterday, their shares absolutely ripped.

They are not feeling a soft consumer just yet, and their guidance seems in line with other high-end retailers who are still raking in cash. On earnings news, $M ripped higher by 19.31%.

The Dollar Store Biz ($DLTR, $DG) — Both of your favorite dollar store names ripped higher yesterday after their earnings announcements.

Apparently, as consumers spend less at Wally and Target, they are throwing their money at products inside of the dollar store. Both of these names beat on both the top and bottom lines, sending shares higher. $DG ended the day up 13.68%, and $DLTR was up 21.87%.

What's Rotten

Kraft Heinz ($KHC) — Shares of $KHC retreated 6.10% Thursday. On a generally good day for stonks, these cats were one of the Street’s biggest laggards.

Investors are digesting two considerable headwinds. The first was a downgrade of the stock by UBS to a sell and a slash of the price target. UBS thinks that consumers might trade in the name brand for private label brands. The second is a shift in 3G Capital, the owner of the company, making it easier for their insiders to sell their shares. The Street seemed spooked by both of these revelations.

Medtronic ($MDT) — Medtronic’s shares took a bit of a dive yesterday after an earnings miss. Even though their leadership announced a boost to the dividend, shares slid after crappy earnings and downbeat guidance.

Even so, $MDT isn’t having that bad of a year, only down about 6% after yesterday’s move. On their mediocre earnings, shares slid by 5.78%.

Thought Banana

Metafraud — Welcome to the new economy. There’s an entirely new list of ways to get scammed:

You can have your IP stolen in the Metaverse.
You can buy a worthless token that will surely go to zero.
You can buy a stablecoin that is anything but.
You can buy shitcoins that have literally zero underlying value.
You can invest in shitcos that will perpetually be pre-revenue.

The technology behind blockchain is amazing. A distributed ledger that enables transparency, efficiency, and an immutable, auditable digital trail? Sign me up.

Idiotic valuations for assets with limited liquidity that, when under pressure, will crack and quickly split-S to zero? Yeah, I’m less into that.

What does it say about investment in the digital economy when there are markets dedicated to yolo-ing large sums of money into JPEGs?

Phishing scams are only your first concern. Sure, you can haphazardly give someone access to your wallet online; but even if you don’t accidentally get scammed out of tens of thousands of dollars, you could be speculating in the wrong shitcoin or NFTeenie baby.

As equity valuations tighten, a lot of us are trying to generate alpha elsewhere besides from stonks. It would appear that an adversarial Fed has our portfolios in its sight, so this is perfectly logical.

As the door is opened to increased speculation in the form of exposure to nontraditional, completely new, and 100% digital asset classes, you have to think: if it’s too good to be true, it usually is.

I’ll leave you with one piece of wisdom that I picked up from the Soviet movie The Diamond Arm. “The only ones who drink champagne in the morning are either aristocrats… or degenerates.”

Wise Investor Says

“The time to buy is when there’s blood in the streets.” — Baron Rothschild

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