the bird is freed | The Daily Peel | 10/31/22

Oct 31, 2022 | Peel #327

 

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Market Snapshot

Here we go. Elona Musk began his run at the helm of Twitter guns a-blazin’, canning several execs and promising to further clean house.

In the markets, the Dow had a helluva Friday and is nearing its best-ever October performance.

Apple led the charge and is the only Big Tech name left unscathed after awful months from Amazon, Meta, Microsoft, and Alphabet.


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Macro Monkey Says

Big Tech’s Index Stranglehold Loosens

Plenty of people that buy cap-weighted passive index funds don’t realize that they’re basically just buying a ton of Apple along with tiny slices of hundreds of other companies.

Big Tech earnings used to drive index performance almost by themselves, but that era could be ending.

  • The S&P was up over 3% this week, while Amazon and Meta lost over 15%
  • Higher rates and slower ad spending are denting Big Tech profits more than other industries
  • The comeback of value stocks has been overhyped in the past, but the Russell 1000 is gaining momentum

Meme of the day

meme

Source


What's Ripe

GameStop ($GME) ↑ 8.64% ↑

  • See you on the moon, b*tches! Short interest has been building in $GME in recent weeks, and the squeeze is well underway
  • The apes are at it again, and hedgies haven’t learned their lesson

Intel ($INTC) ↑ 10.66% ↑

  • There’s nothing investors love more than costs cuts in a down market
  • Despite posting 85% lower EPS than last year, a promise of $10 billion in tax cuts had shareholders giddy

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What's Rotten

Amazon ($AMZN) ↓ 6.80% ↓

  • It took a while for Big Tech to get walloped like the rest of the market, but the collapse is in full force now
  • A strong dollar didn’t help $AMZN in Q3, but projections of a weak holiday szn ahead really cratered the stock

DaVita ($DVA) ↓ 27.09% ↓

  • The kidney dialysis company’s profits plummeted in Q3, and prospects for Q4 aren’t much better
  • Labor market and pandemic headwinds were the cited reasons for the drop, but investors are over those excuses at this point

Data Peel

chart

Source


Thought Banana

Life in Plastic, It’s Fantastic

The only way to keep Americans from racking up credit card debt might just be locking them inside.

Soon after lockdowns took effect, credit card debt began to plunge as people spent their time dancing on TikTok rather than slamming $20 espresso martinis.

  • The sum total of U.S. credit card debt stood at $916 billion in September, a jump of nearly $200 billion since April 2021
  • Stimmies that weren’t dumped into Robinhood helped people pay down debt and pad savings
  • Since then, real wages haven’t kept pace with inflation, which has forced people to resort to credit to maintain their lifestyle

The big question: Could a recession, along with higher rates, blow up consumer balance sheets and lead to a painful downturn?


Banana Brain Teaser

Friday — Dead on the field lie ten soldiers in white, Felled by three eyes, black as night. What happened?

Bowling.

Today — It’s 50 bananas off the DCF Modeling Course. LFG!

A man builds a house with all 4 sides facing south. A bear walks past the house. What color is the bear?

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



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