Rishi to the Rescue | The Daily Peel | 10/25/22

Oct 25, 2022 | Peel #323

Market Snapshot

Rishi Sunak is the latest holder of the Prime Minister hot potato after the spectacular Truss flameout.

The market seemed happy with the pick, but he has one epic clusterf*ck to get his arms around.

Stocks ground higher despite rising bond yields. Big Tech earnings are on the docket later this week, along with Boeing and Coca-Cola.

Banana Bits

Macro Monkey Says

Meme of the day

What's Ripe

What's Rotten

Chinese Tech Stocks ($CQQQ) ↓ 9.40% ↓

• Alibaba, Tencent, Baidu, and their peers tanked on fears that a changing political landscape will hamper growth
• The government’s insistence on “C-19 zero” at the expense of the economy hints at a priority of political wins over economic ones going forward

Las Vegas Sands ($LVS) ↓ 10.29% ↓

• Political ramifications coming out of the CCP gathering over the weekend are likely to hurt the casino industry
• Despite beating Q3 estimates last week, $LVS’s especially large presence in Macau has investors worried about future growth

Data Peel

Source

Thought Banana

Big Tech Haircuts

It’s hard to know what Elon’s bullsh*t level is on any given day, but his pledge to cut 3 out of every 4 workers at Twitter once he buys it has Big Tech employees trembling.

The days of essentially free capital are over, and the industry is starting to reckon with the implications.

• Throughout the free money era, Big Tech has vacuumed up gobs of engineers without demonstrating a clear need for the extra hands
• Startups have been starved for talent as a result, widening the moat between the big boys and everyone else
• When treasuries are paying over 4%, all of your Opex needs to have a clear purpose of staying competitive

The big question: If Big Tech hiring is dramatically slower in the coming decade, will startups be able to close the gap?

Banana Brain Teaser