Too Many Jobs | The Daily Peel | 10/10/22

Market Snapshot

The September jobs report was too good, sending the market lower to end the week. As long as JPow continues to see decent job gains, expect him to stay aggressive.

Major indices finally closed a week in the green. Barely.

Oil rocketed higher to end the week, adding more reason for the Fed to stay hawkish.

At the close, the Dow sank 2.10%, the Nasdaq dropped 3.8%, and the S&P fell 2.8%.

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Let’s get into it.

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What's Ripe

Credit Suisse ($CS) — The downtrodden Swiss bank flexed its muscles Friday when it bought back $3 billion worth of bonds, proving to the market that it’s just fine.

Despite hoopla on r/wallstreetbets and elsewhere about a $CS blowup around the corner, investors believe it will survive.

It’s down big for the year, but it’s still kicking.

$CS was up 13.19% by the end of the day.

Madison Square Garden ($MSGS) — The home of the woeful Knicks and Rangers had an early Christmas present for investors in the form of a one-time $7/share dividend.

Shares soared on the news. MSG looks to be capitalizing on its relatively low share price compared to the lofty valuations of the pro teams it owns.

Unfortunately, the dividend won’t help the Knicks on the court.

$MSGS was up 8.21% by the end of the day.

What's Rotten

Roblox ($RBLX) — Roblox went public in a red-hot market, and it has struggled to maintain its valuation since.

Kids being home all the time during lockdowns helped the game spread, but fads fade quickly with that age group.

Analysts are skeptical about recently-announced feature updates, as well as the company’s ability to fend off increasing competition.

$RBLX ended the day down 11.06%.

Coinbase ($COIN) — $COIN’s YTD returns are awful, but it’s actually been on a slight uptrend since May.

Shopify’s CEO is one of several high-profile buyers recently, but the stock plummeted Friday after a report showed slowing retail user participation.

It’s fun to trade magic internet money when sh*tcoins are going to the moon, but it’s not the same when the party ends.

By the end of the day, $COIN was down 9.35%.

Thought Banana

Protecting the Chips — Semiconductors have been a flashpoint in the economic rivalry between the U.S. and China.

The world heavily depends on Taiwan for these chips and ensuring a secure supply has been a focus for recent American presidents.

Joey B upped the ante Friday when he announced limits on chip technology sales to China for the public purpose of slowing its military programs.

• Experts are calling the rules “the broadest export controls issued in a decade”
• Graphic processing units (GPUs) are a focus of the restrictions, as they are central to AI programs
• China is expected to retaliate by imposing its own restrictions, the extent of which is unclear

It should be expected that the two world superpowers would compete on technology, but the worry is that this could ignite a broader conflict.

The Taiwan issue has been bubbling below the surface since the start of the Russo-Ukrainian war, and diplomats are worried that restrictions like these could be a catalyst for escalation.

The two countries have a wide-ranging economic relationship that benefits them both, so fingers crossed that the semiconductor issue remains merely an economic competition.

Wise Investor Says