The Copycat Corporation | The Daily Peel | 8/25/21

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Market Snapshot

 

Traders walked out of the office with smiles on their faces yesterday as U.S. stocks broadly performed well. The Dow crept up just 0.09% while the S&P rose 0.15% and the Nasdaq led with a 0.52% gain. Let's get into it.

 

Macro Monkey Says

Housing – In classic American tradition, high prices can't stop us from spending money. This is easy to see in the housing market; as prices continue to creep up to newer and newer records, demand isn't going anywhere. Sales of single-family homes ticked back up in July to an annual pace of 6 million after declining for several months. If you were getting 2007 housing market vibes, maybe rethink that theory, as demand is there like never before and there's enough cash in the system to make even JPow consider turning off the money printer. Low rates, stacks of cash, and steady demand, what could go wrong...right?

 

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Preparing for Powell – The annual Fed policy meeting held in beautiful Jackson Hole, Wyoming will get underway this Friday. Although this year's gathering will be held via Zoom, we're just as excited nonetheless. All ears will be pressed to their speakers listening for discussions around tapering of asset purchases, as hinted at in recent weeks. Also top of mind, Fed watchers have been (im)patiently waiting for a thorough discussion on inflation, given the recent reading being the highest in a decade. It's likely that the information we learn will largely determine the course of asset prices for at least the rest of the year, so make sure those end of year options plays will be at least a little less OTM than when you bought them.

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What's Ripe

Airbnb ($ABNB) – Positive PR > increasing net income, all day. This is a lesson Airbnb has been giving a masterclass on this week, as the online lodging company announced it will be housing 20,000 Afghan refugees around the globe. In response, Wall Street pushed shares up 10.0% or, in other words, gave the firm $11.5bn in market cap as a thank you. Meanwhile, travel stocks overall saw a good boost as the ever-indecisive market voted for a positive outlook yesterday.

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Chinese Stocks – The rollercoaster ride Xi built for Chinese tech names appears to be rounding its final loop, as names from Tencent to DiDI were largely in the green yesterday. We can see this in the Chinese Internet ETF $KWEB, which soared 10.9% as analysts start to understand the new regulations out of Beijing. Alongside, the pace of new regulation is expected to slow, giving these companies more breathing room on their quest for global domination.

 
 

What's Rotten

BioNTech($BNTX) – One day's trash is another day's treasure, and while certainly treasure on Monday, BioNTech and other vaccine makers were complete trash yesterday. Falling 3.6%, BioNTech and peers fell victim to some good old fashioned profit taking. With the news of the FDA's full authorization, shares got a nice (and expected) pop on the day of the announcement. Seeing that pop, many investors took their profit and ran.

Dividend Yields – Who the f*ck would want to get paid just for owning stock, right? Definitely not me, and apparently not the Street either. Stocks in the Bloomberg group classified as high dividend yields lagged behind almost every other per group yesterday. This is likely due to renewed optimism in more risk-on names that had been fizzling as a result of tapering and inflation. Either way, free money for owning shares is honestly just too easy...gamble away your life savings, be a man.

Thought Banana:

Walmart Goes Amazon – If you can't beat 'em, copy their exact strategy and hope it works for you too. That might not be how the saying goes, but it's the blueprint Walmart is following. Seeing the corpses of once great retailers stack up, Walmart said "not me" and has leaned into an omnichannel approach. The online unit has been working well to the point where the firm runs its own ad business, just like Amazon. Now, also just like Amazon, Walmart will launch a delivery service for other businesses, coming about a year after the firm launched Walmart+, their direct Amazon Prime competitor. TLDR: Walmart wants all the smoke, and we can't wait to see the cannons start firing.

 

Wise Investor Says

"Only enter a trade after the action of the market confirms your opinion and then enter promptly" – Jesse Livermore

 

Happy Investing,

Patrick & The Daily Peel Team

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Comments (1)

Aug 25, 2021 - 6:15am
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