Green Day | The Daily Peel | 9/8/22

Market Snapshot

Stocks started out with modest gains and then grinded higher in the afternoon, providing a nice respite after a brutal few weeks.

Markets are expecting a 75 bps rate increase this month. The question is, what does the path look like for the rest of the year?

Some Fed governors would rather rip the bandaid off and get the rate increases over with this year, while others prefer a gradual approach that would bleed into 2023.

At the close, the Dow gained 1.40%, the Nasdaq jumped 2.14%, and the S&P rose 1.83%. Bond yields dipped slightly.

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What's Ripe

Twitter ($TWTR) — Turns out billionaires don’t always get what they want.

A Delaware judge denied Elon’s request to push back the trial over the $44bn purchase of the company.

Bots are at the heart of this trial. Elon says that if a much bigger number of Twitter’s users are bots than expected, the value of the company would be way less than the $54.20 per share he originally agreed to. (Note the 420 in there. This man is a child.)

$TWTR has been a poo emoji for the last month or so, but investors cheered a trial happening sooner rather than later.

It gained 6.62% by the end of the day.

Sweetgreen ($SG) — As the unofficial home of networking lunches, Sweetgreen has lagged this year as the RTO movement has been sluggish. Shares are down nearly 40% YTD.

But $SG got a nice bump Wednesday, about a month after it lowered its full-year forecast.

It’s cutting costs, including layoffs, to make up for lower sales, and investors hopped back in after a brutal selloff.

$SG rode the green wave and finished the session up 8.33%.

What's Rotten

The VIX ($VIX) — The CBOE’s fear gauge dropped Wednesday after rising steadily for more than a month.

Investors don’t like bad news, but they hate uncertainty even more. With a 75 bps rate hike increasingly likely during the September Fed meeting, markets can digest how the new rates are likely to impact valuations.

$VIX closed the session down 8.70%.

WTI Crude — OPEC+ agreed to cut production by a mere 100k barrels a day Monday to bring the price of crude closer to its target level of $100/bbl.

The cut was too small to affect the market price, which spiked on Wednesday on fears of a global slowdown.

Daddy JPow and crew are determined to keep hiking rates, Europe is teetering on recession, and China’s economy continues to struggle under the weight of zero-C19 and a real estate debt crisis.

Combine all these together, and you have a murky outlook for oil demand.

WTI Crude futures were down 5.56% by the end of the trading session.

Thought Banana

BS Jobs, Automation, and the Future of American Labor — The late anthropologist David Graeber published Bullsh*t Jobs back in 2018. The book expands upon his popular essay from 2013 and outlines the five archetypes of bullsh*t jobs—flunkies, goons, duct tapers, box tickers, and taskmasters.

The gist of the book is that, instead of only creating a new job when it’s necessary and adds value, businesses have inadvertently created a bunch of roles that don’t do much of anything.

Sure, people show up to the office (sometimes), work long hours, and look busy throughout the day. But does all the paperwork and email they generate add value to anyone?

Employees are incentivized to keep their heads down and do it on a daily basis since mentioning the pointlessness of their job to their boss wouldn’t end well for them.

How the f*ck did we get here? It has to be some collective insanity to create work for ourselves rather than let machines do it, like JM Keynes thought would happen.

Broadly speaking, there are a few factors that Graeber outlines as reasons for this phenomenon:

• Managers need underlings to feel important
• The collective belief in work as a virtue
• The wealth generated from technology has been invested into consumer growth rather than more leisure time

I’ve been thinking about the implications of all the people employed in bullsh*t jobs along with the millions of open jobs that can’t be filled and the perceived decline in American competitiveness.

Would something like a 4-day workweek cut much of the BS that employees deal with, allowing them to focus for a shorter time on truly productive tasks?

Maybe that’s not the solution, but maybe filling all these open jobs isn’t either. Maybe we need to take a fresh look at how organizations are structured, find how many jobs are truly necessary, and reevaluate.

That opens up a whole ‘nother can of worms around UBI, entitlements, and the like. That’s for another day, but Graeber’s theory is worth considering when thinking about the future of the American workforce.

Wise Investor Says