Trumps World | The Daily Peel | 10/22/21

Silver Banana goes to...



Market Snapshot

Attempting to make sense of the current economic environment has been difficult for markets, kind of like when you give a toddler a book and they're not sure which way to hold it. The Nasdaq rose 0.62% and the S&P rose 0.3%, while the Dow once again barely fell, lowering 0.02%.

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Let's get into it.


Macro Monkey Says

Checkmate, Globalists - Humanity's path towards one big super country took not one, not two, but maybe ten steps back after the pandemic and never has this been more clear than right now.

Global value chains, as represented by the WSJ, have slumped since a 2008 peak and took a big dive in the throes of COVID. The metric is an indicator of connectedness between global economies, counting any good that has to cross at least two borders before reaching its final destination as part of the "global value chain." Anyone who has taken Business 101 knows a value chain is nothing more than a bullsh*t MBA term for supply chain, so it's really just a measure of how often goods have to travel the globe before reaching the end consumer.

To no surprise, the share of the global goods market this pertains to dropped precipitously over the last year. Supply chain onshoring has become the choice for ensuring robust national supply chains, particularly of essential goods like drugs.

The implications of this dynamic are far more than they seem. See, countries that trade with each other are generally much less likely to drop nuclear bombs on each other, for one, but it's an interesting representation of how much nations trust goods produced in other nations. Maybe most important, it's a stark reminder that most pieces of plastic will travel the world more than you likely ever will.




Energy - You haven't heard this in awhile, but energy stocks and commodities finally stopped just mindlessly ripping upwards yesterdayEuro natural gas futures actually fell, and not by a little, losing 5.3% while stateside natty gas continued up a decent 1.3%. Euro gas fell as well, with Brent losing 1.4% on the day while WTI here in the U.S. barely even moved. Only one stock in the S&P 500 Energy Index, Valero Energy, actually rose, gaining 1.2% while everything else fell. Kinder Morgan led the fall, melting a sizable 6%.

Who's to blame you ask? Well, who else but China? The CCP earlier this week came out with measures to ease part of the global energy crisis, letting basically every energy market in the world relax a little, except the U.S. Meanwhile, an industry report came out with projections (or, dreams) of increasing crude stockpiles incoming shortly. Bad news for an energy bull, but great news for anyone who likes having heat in the winter.


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What's Ripe

Tesla ($TSLA) - Well, Nikola Tesla can be proud of at least one of his namesake firms. Tesla is just completely OP at this point. In the same quarter that GM CEO Mary Barra issued a warning on their shipment numbers because of the chip shortage, Tesla set yet another record for its shipments and quarterly profit. According to analysts at New Street Research, Tesla's operating profit is roughly double that of a typical auto manufacturer. Wow.

Match Group ($MTCH) - After Match completed its breakup from former partner IAC, the dating app holding company has done rather well in the single's market. Shares burst up a much welcome 10.3% on a little bit of this, a little bit of that, and a lotta bit of Google. That's right, Google announced yesterday plans to cut app-store fees across the platform, which, paired with the potential benefits brought to dating apps from the economic reopening, turns out to be quite the recipe for success. But still, good luck getting those matches on Tinder, I'm sure you'll need it.


What's Rotten

International Business Machines Corp. ($IBM) - The fall from the top is a hard one, but rarely are they as drawn out as that of IBM. As the non big-tech, big-tech firm, IBM might be the ultimate contrarian play, but yesterday's 9.6% loss certainly shook out some of those investors. Like everything else lately, this comes after their latest earnings release. Revenue missed by 1.2% on slower growth in their IT management system, dragging down decent performance in IBM cloud.

Snap Inc. ($SNAP) - Falling 0.69% on the day was like taking a Pre-Calc class in preparation for a 400-level physics final exam. Shares absolutely tanked post-market, falling over 27.3% on the firm's Q3 earnings release. Revenue rose 57% over the period, but still managed to miss estimates, coming in at $1.07bn on the $1.1bn expected. The real issue however, was details on the ill effects of Apple's latest privacy changes. Can't wait to see what kind of carnage is in store for today.


Thought Banana:

Just Won't Quit - Real estate mogul, billionaire, President, and reality TV show host apparently wasn't enough for Donald Trump. After teasing doing something weird since he left the presidency, Trump's organization finally did a thing...and it is pretty weird.

The Trump Media and Technology Group (TMTG), seemingly an attempt to fit as many buzzwords in a company name as possible, went public via a reverse merger with Digital World Acquisition Corp ($DWAC) yesterday. The first day, in short, was phenomenal, with shares gaining 357% while warrants on the stock exploded 2,071% - the most a stock featured in the Peel has ever moved. And that's not even the most out-of-the-ordinary part.

To be fair, out-of-the-ordinary is relative, and I wonder if the former President could even pass that threshold for himself anymore. But still, the highlight of the firm is a new "non-cancellable" social media platform, humbly called "Truth Social." Unfortunately, we don't have time to point out all the interestingly peculiar things going on with this new company, but I beg you to please just peruse the firm's investor presentation here. You won't be disappointed.

Wise Investor Says

"Greed is normally balanced by fear"Peter Schiff


Happy Investing,

Patrick & The Daily Peel Team

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