Have We Hit Bottom? | The Daily Peel | 10/14/22

Market Snapshot

Markets initially dropped on news that core CPI accelerated to 6.6% in September, up from 6.3% in August.

But they quickly bounced back and surged higher as certainty around a 75-point hike in November grew, and investors figured that the selling had gone too far.

The question now becomes whether the Fed thinks the current hiking schedule is still sufficient or whether it needs to tighten the screws further.

At the close, the Dow shot up 2.83%, the Nasdaq rose 2.23%, and the S&P gained 2.6%.

WSO’s DCF Modeling Course can get you up to speed on all things discounted cash flow that you will need to both survive and excel in finance. From the big picture, to fundamentals, to enterprise and equity valuation practice, you’ll take a deep dive into topics that are crucial for anyone who wants to work in Finance.
Master DCF Modeling today

Let’s get into it.

Monkey meme of the day

Banana Bits

Banana Brain Teaser

Macro Monkey Says

WSO DCF Modeling Course

What's Ripe

Domino’s Pizza ($DPZ) — You can have eye-watering inflation and the deepest recession imaginable, and people will still order large pepperonis on the reg.

Despite higher prices and labor challenges, Domino’s managed to grow its top line in the quarter.

It sets a positive tone for other major restaurant chains set to report earnings soon, including McDonald’s and Chipotle.

$DPZ was up 10.44% by the end of the day.

Barclays ($BCS) — The British bank was up big Thursday on the back of a wide-ranging market rebound in the U.K.

Hope for some sanity in financial markets sent the pound, bonds, and stocks higher in Britain. An announcement of a fiscal plan that makes more sense could add fuel to the recovery.

Barclays has lost 20% in the past month, so the bump was much needed.

$BCS was up 8.43% by the end of the day.

What's Rotten

Coinbase ($COIN) — Despite news of a partnership with Google in crypto cloud payments, $COIN continued losing ground Thursday.

The crypto winter is as dark as ever, and investors aren’t expecting much to change until rates stabilize and risk assets are on the table again.

For now, $COIN is playing the long game and betting on a crypto resurgence in the future.

$COIN is down 11.99% in the last month.

Etsy ($ETSY) — The e-commerce platform told investors that inflation was a primary factor that drove slowing sales in Q2.

Well, inflation has only gotten worse since then, and investors are expecting an ever sharper slowdown as a result.

The sharp decline comes less than a week after a buy rating from Goldman, so maybe there’s some value to be had.

By the end of the day, $ETSY was down 9.27%.

Thought Banana

Who Needs a Hummer EV? — The $110k Hummer EV Pickup weighs 6 tons, gets up to 1000 horsepower, and can reach 60 mph in 3.3 seconds.

For reference, an F1 car goes zero to 60 in 2.6 seconds.

It’s a f*cking incredible piece of machinery from a traditionally gas-guzzling brand.

Hummer, and other legacy car brands, are designing new EV models to be huge and incredibly powerful in order to cater to the traditional truck guy.

• EVs are starting to lap gas cars in terms of power and acceleration, and brands are souping up their vehicles to entice consumers with unbelievable speed
• It doesn’t take a rocket scientist to wonder how safe a 12,000-pound tank zooming down the road is
• Americans love big cars, and there isn’t any sign of that changing amid the transition to EVs

The U.S. has the highest traffic death rate in the developed world, so ensuring that the next generation of cars doesn’t regularly mow down pedestrians, or slam into each other, is pretty important.

Federal agencies have thus far been more focused on the climate benefits of EVs than the safety risks from their insane power and heavy weight.

These cars are basically computers on wheels, so hopefully, that intelligence can keep everybody safer on the road.

But if I see one of these Hummers zooming past me, I’m getting the hell out of the way.

Wise Investor Says