Wishful Thinking and Unpredictable Consequences | The Daily Peel | 12/22/22

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• Micron basically air-balled a free throw last quarter, missing expectations on the top and bottom lines by a wide margin
• We talkin’ bout taxes. Specifically, big Donnie T’s taxes over the past 6 years will drop and give nerdy CPAs a seat in the spotlight for at least a hot minute
• Okay, apes. SBF landed in NY last night. We’re still jumping him, right?
• This very basic and seemingly sensible digital privacy law will probably get lobbied away (let’s be real), but for now, it seems to give some hope to social media users

Omnibus Spending Package

Now, let’s be honest. Most of us half-ass our jobs (like, imagine if I actually tried at writing this?) but still somehow convince our bosses we deserve money (really hope Patrick doesn’t read this).

Anyway, you may think you’re the GOAT at BSing for a paycheck, but let me introduce you to 535 of my closest friends.

The US Congress has once again shirked ~80% of its responsibility for 11.75 months in preference of doing everything all at once, minutes before a crucial deadline. Sound familiar?

At midnight this Friday, the US government will shut down once again unless this spending package is signed. For Congressional leaders, this self-imposed deadline is actually much more of a blessing than a curse.

The 4,155-page bill, accompanied by ~2,600 more pages serving as essentially a glossary, is basically a hodgepodge of 35 separately proposed bills horrifically stuffed into one gargantuan embarrassment of legislation. The thing was just formalized this week, so don’t even think for a second that a single Congressperson read this thing.

Aside from being a clear tell of a barely functioning national legislature, this bill introduces a lot of “hurry up and spend” ideas not seen before. Some of the key pieces include:

• $858bn in defense spending, a 9.7% annual increase
• The Electoral Count act, clarifying the role of the VP and state legislatures during the Presidential transfer of power…wonder why they need that??
• Further appropriations for already passed legislation like the CHIPS Act
• A 20% boost in funding to the Office of the Assistant Secretary for Preparedness and Response under the HHS
• A 17% increase in funding to Border Patrol

And that’s about it. I mean, just from those alone, you can likely already tell this omnibus bill is running over what should’ve been at least three dozen individual bills.

Also notable are items that got kicked from the legislation, such as:

• Removal of the marijuana banking act that would allow banks to actually serve these companies on a national level
• Axing of the expansion to the child tax credit system
• Scrapping of plans to boost IRS spending (phew, that’s a relief!)

Honestly, we could fill a week’s worth of Macro Monkey just on this “bill” alone. I mean, it’s more like electing a whole new government. Plus, at a $1.7tn price tag, JPow certainly won’t be receiving much help from his fiscal compatriots in his death match against inflation.

The government does need money to spend, but dammit, why can’t this be done in a transparent, reasonable way where we can actually get some minor semblance of an idea of where our tax dollars are actually going? Wishful thinking, I know.

Nike ($NKE) ↑ 12.18% ↑

• The sportswear maker that doesn’t hire flaming racists for sponsorships (looking at you, Adidas) was up tremendously yesterday. Shares popped a massive 12.2% on a stellar earnings report.
• Sales, margins, and EPS all eviscerated expectations. Meanwhile, the firm’s lingering excess inventory problems are getting relieved like a sunburn after a fresh dose of Aloe.
• In summary, Nike Just Did It™

Carnival Corp ($CCL) ↑ 4.69% ↑

• Shares in this cruise line sailed off into the sunset yesterday, gaining almost 5% on the first positive, idiosyncratic news, maybe since before C-19 showed up.
• Like Nike, Carnival killed it in its latest quarters, at least according to investors. Shares surged as last quarter’s loss came in slimmer than expected, while top-line revenue still missed and debt piled up like it was trying to recover a fumble.
• Cruises still have a long way to go. As a result, investors seem to be cutting ‘em some slack on typical metrics and pivoting their focus to things like bookings, which increased, and C-19 protocols, which decreased. We’re sailing off in the right direction, team.