un-Happy Monday | The Daily Peel | 8/23/22

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Market Snapshot

Stock futures fell Monday morning as the markets sputtered to start the week. Wall Street is worried about Main Street, particularly as more than 50% of businesses surveyed by PwC plan to cut jobs or freeze hiring in the coming months.

WTI Crude closed above $90 again, and the 10-year yield was back above 3% as fears mount amongst investors.

At the closing bell, the blood bath finally ended. This was the worst day for markets since June. The Dow closed down 1.91%, losing more than 640 points. The Nasdaq was down 2.55%, and the S&P cratered 2.14%.

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What's Ripe

Chinese Tech Stocks ($KWEB) — Some of the biggest (and only) positive gainers in the Nasdaq yesterday were some of your favorite k-web names like Pinduoduo, JD.com, Netease, and Baidu.

Yesterday was generally rough for growth and even worse for US tech stocks, but these Chinese names were still scurrying about after yesterday’s atomic valuation bomb went off.

Shares of the China tech ETF were up 1.28%.

Bright Minds Biosciences ($DRUG) — This biotech name, which you probably haven’t heard of, has a fantastic ticker and was through the roof yesterday after higher than expected volume.

Perhaps, it is a meme stock in the making, or the Street appreciates that its board axed a good chunk of its leadership team earlier this summer.

On a day when I lost several percent of my net worth, I need funny tickets to write and laugh about, so here you go.

Yesterday, shares of the drugmaker $DRUG were up YUGELY, closing up 72.80%.

What's Rotten

Meme stonks ($BBBY, $AMC) — Monday was not a great day to be a meme stock holder.

Your favorite names left their investors holding a bag after taking it in the face during the trading session.

Shares of $BBBY dropped like a pound of bricks, closing down 16.23%.

In the same breath, shares of $AMC fell 41.92% as its preferred APE shares began trading, and its biggest brick-and-mortar competitor began publicly discussing a bankruptcy.

Netflix ($NFLX) — Investors have moved against $NFLX after Disney’s streaming service has passed it in terms of subscribers. Netflix is also struggling to monetize its brand and retain subs.

Analysts have been downgrading the former streaming behemoth, sending shares lower as investors panic about owning the next tech growth name.

Yesterday, shares of $NFLX dropped 6.06%.

Thought Banana

Pastries Not Getting Soft — Consumers are feeling this inflation tax right in the wallet. While the Inflation Reduction Act hasn’t taken effect yet (sarcasm), the price of just about everything is still on the rise.

We cheered at July’s inflation numbers because it meant that the rate at which prices were rising had slowed. Prices are still going up, lest we forget.

Consumer spending has slowed of late, and we’ve been hearing about it in almost every earnings call from CEOs who are worth a sh*t and who tell it like it is.

Not just in retail but also at restaurants, the consumer has dialed down their spending.

But, there is a slight exception to this rule.

Coffee shops, bakeries, donut shops, and pastry shops all saw solid demand, especially when you compare this uptick to the downtick in restaurant spending.

The reason: as more and more workers (are forced to) return to the office, buying a bagel and a cup of Joe seems like a small treat in an otherwise meaningless office-dwelling-existence.

Kidding aside, a muffin with a latte is a relatively small indulgence compared to grabbing drinks or going out for a meal.

This is perhaps an overgeneralization. In places like Boston, San Fran, or the City, a muffin and a latte can easily run you more than $10, more than the cost of a burrito bowl at Chipotle in most places.

People are addicted to caffeine. We love the stuff. Literally can’t get enough.

But workers are even more addicted to their routines. If you stop at the same pastry maker every Friday to grab that pumpkin spice scone, you’re probably going to tolerate an extra buck out of pocket to keep things sane in your life.

The fix is in; commuters spend more money on coffee. So whether it’s instant coffee from a vending machine or some frou-frou gourmet drink with an extra shot, a fiver here and there on coffee bean juice isn’t unreasonable.

I don’t know about you, Apes, but a cup of coffee gives me at least as much joy as the cash that I pay for it. I think that’s why Americans keep coming back for more every morning.

Wise Investor Says