Billionaire Beef | The Daily Peel | 8/2/21

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Market Snapshot

 

Capping off a big earnings week, the S&P & Nasdaq fell 0.5% and 0.7%, respectively, as laggard days from large tech and financial companies crushed bull's dreams.

 

What's Ripe

Digital Currencies – Is greed good? We'll find out shortly, as 12 consecutive days of upward movement for BTC has pushed the asset into "Greed" territory according to the "Fear and Greed Index". This index measures current momentum and social sentiment against past trends to guess what might be going on in the digital currency market. With BTC's 21.2% increase over the past 7-days, the market has been heated like a microwave dinner, much to the satisfaction of all you diamond-hand Chad hodlers.

DexCom ($DXCM) – You may not know DexCom now, but after gaining 13.0% on Friday, I'm sure you're wondering what you missed out on. The maker of continuous glucose monitoring (CGM) devices thrilled investors on their Q2 earnings call, with sales and earnings beating expectations. But perhaps the biggest reason for the boost is management asserting that their next-gen CGM, the G7, will be released in 2021, which hyped up investors like Gata on Dave.

U.S. Steel ($X) – Reddit and retail investors generally swarm around consumer facing, high tech-enabled companies to "pump the sh*t out of". Recently however, much attention on the now (in)famous subreddit that need not be named has been given to U.S. Steel. Founded in 1901 by Andrew Carnegie, the company is still kicking with large dominion over the U.S. steel market...as well as that of Slovakia apparently. Shares rose 4.0% in what could be the start of the next market-triggered Congressional hearing. I mean, has anyone checked if there's steel on the moon?

 

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What's Rotten

Amazon ($AMZN) – Somebody get Bezos some tissues, the man has some tears to wipe. In the company's first quarterly call with freshly appointed CEO Andy Jassy, Amazon reported pathetic revenue growth of only 27% YoY. The firm's cloud and marketing businesses carried the team, but e-commerce slowed dramatically, bringing other e-commerce stocks down with it. To put it in perspective, AMZN's 7.6% drop on Friday was a loss equivalent to the entire market cap of Target and larger than the market caps of 87% of S&P 500 companies.

Pinterest ($PINS) – Every mom's favorite app had a rough week losing 22.7%18.2% of which on Friday. You guessed it, disappointing earnings did it again. Pinterest's 125% YoY revenue growth and a $170mm gain in net income couldn't overcome a 5% loss in U.S. based monthly active users, worrying investors that the stock could be past its prime.

Discovery ($DISCA) – It's possible Shark Week could be the single best thing about summer as Discovery claims, but traders certainly don't think so. As the company behind shows like Naked and Afraid and Battlebots gets ready for their earnings call on Tuesday, investors sent shares down 3.9% and 4.0% for class A and C shares, respectively. This quarter will provide an enhanced view of the success (or failure) of their streaming service Discovery+, and could shed more light on the supremely strange deal with AT&T. Judging by Friday's performance, expectations are low.

 

Macro Monkey Says

Make it Rain – Consumers have a lot of money - and recently, they definitely have not been shy about it. Personal consumption expenditure (PCE), the measure of consumer spending for a period of time, continued its upward trend to a new high in June. As scarcity in much of the labor market drives wages higher, government checks light up bank accounts across the country, and equities continue to experience a massive run up, consumers have been living large for some time. On the flip side, PCE is also a decent measure of inflation, giving further evidence that this whole "transitory" thing just might be a load of bs.

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Food for Thought:

Fight! Fight! Fight! – Oh baby, fights between billionaires on Twitter is something I never knew I needed, but now can't live without. This past week, none other than Elon Musk was going at Apple over their app store fees, calling them a "de facto global tax on the internet", showing support for Epic in their ongoing lawsuit. This isn't the beginning of the beef, as Cook and Musk have never been huge admirers of each other. Cook even claimed that Musk expressed an interest in running Apple back in 2016 when there were merger rumors between the their companies. Musk wholeheartedly denies this, giving us a great reason to get out the popcorn.

 

Wise Investor Says

"Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it."

 Albert Einstein

 

Happy Investing,

Patrick & The Daily Peel Team

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