JPow Delivers Anotha One, but What About Future Hikes? | The Daily Peel | 11/3/22

Nov 3, 2022 | Peel #330

Market Snapshot

Not one, not two, not three…that’s four 75-point hikes in a row.

During his comments post-FOMC, JPow didn’t tease the rate-hike slowdown markets were hoping for, and stocks melted down.

The Nasdaq was hit especially hard, while the Dow and the S&P suffered more modest losses.


Banana Bits


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Macro Monkey Says

Price Increases Aren’t Hurting Enough

The likes of Mickey D’s and Chipotle have been giddy about persistent inflation this year.

They’ve continued jacking up prices with no effect on demand and plan to continue doing so for the foreseeable future.

That’s a big problem for our boy JPow.

  • The Fed would rather see a gradual decrease in demand on the back of higher prices rather than continue to hike and wait
  • Putting the economy into a deep freeze just to drain consumer savings and stamp out inflation isn’t a great option
  • Companies with pricing power are getting further ahead, leaving the real payers of inflation on life support

Meme of the day

meme

Source


What's Ripe

New York Times Company ($NYT) ↑ 7.38% ↑

  • Even the NYT got caught up in the C-19 bubble, and it’s been trying to claw its way out of heavy losses in the past year
  • Nice subscriber gains and bottom-line growth proved to investors that its digital plays are working

Litecoin USD (LTC) ↑ 1.34% ↑

  • Been a minute since anything DeFi-related has been ripe, but Litecoin broke that trend with a huge leap Wednesday
  • MoneyGram announced it’ll allow users to trade/store the coin, giving it an actual use case

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What's Rotten

AMC Entertainment ($AMC) ↓ 5.53% ↓

  • AMC continued its rotten week Wednesday due to a crappy earnings outlook and weird decisions by management
  • It bought a huge stake in a gold mining company earlier this year for some reason as it watches its core business crumble

Self-Storage Stocks ($EXR, $PSA) ↓ 10.92%, 8.00% ↓

  • People bought all kinds of durable goods during lockdowns last year (furniture, outdoor toys, etc.), and demand has fallen this year as a result
  • Less bulky stuff being bought means less offsite storage required by consumers, and storage companies are feeling the pain

Data Peel

chart

Source


Thought Banana

We Need to Un-F*CK the Housing Market

The American housing market is more out of balance than 

.

Ever since ‘08, when homebuilders lost their shorts, new housing starts have been lagging. That’s left us sorry a$$ renters locked out of homebuying for the foreseeable future.

  • Homebuilders (understandably) thought Armageddon was coming in March 2020 and were caught flatfooted when demand actually spiked soon after
  • People were lining up around the damn block to look at a single open house last year, yet builders were slow to respond
  • Nobody wants to build homes in a tightening cycle, but long-term trends still point to a desperate need for more shelter

The big question: Does Uncle Sam need to step in to bring some semblance of sanity to the housing market?


Banana Brain Teaser

Yesterday — You hear it speak, for it has a hard tongue. But it cannot breathe, for it has not a lung. What is it?

Bell.

Today — It’s 50 bananas off the M&A Modeling Course. LFG!

I fly without wings, and I cry without eyes. What am I?

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



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