A Reprieve from Red | The Daily Peel | 5/23/22

Market Snapshot

Last week marked 8 straight weeks of losses for US equities. There’s not a ton of good news to post here, Apes. On Friday, the Dow and the S&P were up slightly, 0.03% and 0.01%, respectively, while the Nasdaq lost 0.30%.

Our roller coaster of a year continues. BTC and ETH traded at 30k and 2k, key technical levels for related benchmarks. WTI Crude will open this morning just shy of $110 per barrel, and the 10-year yield is holding steady at just under 2.8% last time we checked.

For today’s Banana Brain Teaser, we will chop 50 bananas off of our Excel Modeling Course for the first fifteen respondents with the correct answer.

Are your MS Excel skills holding you back? Are you still using a mouse when you do your analysis? If you’re looking to master the tools that will make you successful as a finance professional or technical communicator, look no further than WSO’s Excel Modeling Course.

Let’s get into it.

Banana Bits

Banana Brain Teaser

Macro Monkey Says

Excel at Excel

What's Ripe

Eli Lilly and Co ($LLY) — Shares of the drugmaker climbed higher on Friday after a critical regulatory decision on human use trials in Europe was approved. On the news, $LLY moved higher by 4.41%.

These drug dealers are actually up almost 10% for the year - not bad, all things considered. They’re expecting other key regulatory decisions from the FDA later this year which could drive the share price higher… or deliver a crushing -30% blow to the stonk a la Teledoc or Amazon or Target, etc. depending on the outcome.

Palo Alto ($PANW) — Finally, a growth company that makes some money and has a quarter that beats expectations. These types of companies are few and far between in this market environment, but Palo Alto’s performance in these recent few quarters probably justifies all the attention they’ve been getting.

They posted solid earnings numbers last week, pushing out a beat and raise for the third straight quarter. Shares of the cybersecurity firm were up 9.70% on earnings news.

What's Rotten

Ross Stores ($ROST) — This one is kind of a shocker to us here at the DP. After seeing TJX post a solid quarter and become one of the few earnings darlings this spring, Ross brought us nothing but tears and disappointment, similar to many of you as children.

$ROST was down 22.47% Friday after posting weaker-than-expected EPS and revenue numbers. Their guidance for the rest of the year was anything but rosy, and even this discount retailer is at the mercy of Chinese supply chain hiccups.

Tesla ($TSLA) — The DP’s favorite EV-maker shed 6.42% on Friday. A few weeks ago, all we did was write positive news about Papa Elon, but lately, he has been taking it on the chin.

Investors are worried about a lot of $hit when it comes to Tesla. Supply chain, China lockdowns, C-19-related hiccups, financing for the Titter deal, Elon being spread too thin, and the potential for all of these issues manifesting as a miss on vehicle deliveries for this year.

Thought Banana

Pay Transparency — I have a hypothesis. Pay transparency is bad for companies that don’t pay as well as their competitors.

I think that it’s even worse for public sector employers.

You’re probably familiar with the concept of FOMO. Well, the fear of missing out is pretty significant for a high-quality candidate who now explicitly knows that someone doing his identical role in the private sector makes double or even triple his salary.

This is particularly true for innovators at public space organizations who work in analytics, advanced technologies, or even IT.

Last week, we wrote about knowing your worth. Well, this becomes an interesting concept when you make a value comparison in dollars.

Public space employees are typically paid less than their industry counterparts. Does that mean the work they do is less valuable?

Not in our eyes. Public service in any shape or form is valuable. It just turns out that the value doesn’t stack up that well when measured in dollars.

Fortunately for employers, some of these major pushes for pay transparency will only be enacted as the economy slows, interest rates rise, and the labor market loosens.

For example, the City’s new law on salary inclusion in job postings won’t go into effect until November. The state of the economy is going to be different in six months than it is today.

Companies that pay a healthy wage and share their wares with their most valuable assets will benefit. Job seekers will see employer generosity and award it with even more competition amongst quality candidates for slots at that company.

Pay transparency will also help close the gender pay gap, as well as silence some of the noise in recent years surrounding the topic.

At the end of the day, information is power. Elon Musk recently made jokes about controlling the teleprompter vs. controlling the country. The same is true of the narrative in the workplace: he who controls messaging controls the conversation. Pay transparency is another way for employers to manage this messaging.

Wise Investor Says