Macro Monkey Says

What's Ripe

Walgreens Boots Alliance ($WBA) – As a loyal CVS’er, it pains me to say this but Walgreen was one of the markets top performers yesterday. Rising 4.4%, WBA got a boost from increasing virus test demand along with raising wages to $15/hr. We know that the market loves good PR, and with millions of Americans headed back to school or the office, a negative test is the only way to get past the bouncer.

Valuations – Question: Does it smell like March 2020 in here to anyone else? Answer: Traders today finally realized that elevated stock valuations may not be sustainable without pandemic era stimulus, and with JPow getting close to turning off the printer, shares largely traded lower today. Now, the market is weird, and as we learned with market breadth, some markets have had mini-corrections on their own. Recall when most people say “the market”, they mean the S&P 500, which is basically just FAMGA at this point. Be smart, apes, it may be smart to batten down the hatches.

What's Rotten

Wells Fargo ($WFC) – Like Red Sox and Yankees fans, regulators and Wells Fargo just never get along. This week's scandal for the bank isn’t really a scandal (yet), but it builds off of all of the firm’s other scandals. The bank was ordered to pay restitution payments to the victims of their too-many-to-count earlier scandals, and they apparently have not been nearly fast enough in doing so. As a result, further regulatory action has been threatened, sending shares down 5.6% yesterday.

Zoom Video ($ZM) – In case you hadn’t heard, Zoom stock is for sure no longer zooming. After the perfect storm that was 2020 for videoconferencing, demand has slowed dramatically. As revealed in recent earnings, revenue beat by only 3%, and they should’ve known that the Street expects the firm to beat expectations by a mile. I don’t even think I need to explain why this is happening, but with the pandemic over, meetings can happen in person again. Shares were down 16.7% yesterday.

Thought Banana:

Holmescoming – Charles Ponzi, Ivan Boesky, and Bernie Madoff...add Elizabeth Holmes to the list? We’ll find out soon, as the Theranos founder's long awaited trial gets underway this week. Here’s a quick reminder of how we got here: Theranos claimed to have a new technology to vastly reduce the amount of blood needed for testing which turned out to be false. This spiraled into criminal charges as losses hit the billions and the public began to question the “fake it ‘til you make it” culture of Silicon Valley. In the coming months many of the questions we’ve had will be answered, so you better stay tuned.

Wise Investor Says

Happy Investing,

Patrick & The Daily Peel Team

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