Markets

A key to calming markets is settling war in Ukraine. Pipeline blown up. Donbas annexed. Zelensky pushing for Nato.

Hurricane Ian. Biden says get vaccinated. Actually, let’s keep it real. As I was Googling this video to queue up, it appears it was cherry picked from something in 2022. $30-$50b.

Layoffs and Freezes and Downgrades and Upgrades

Lyft has frozen hiring.
Meta froze hiring.
Docusign cutting 9% of workforce.

Apple downgrade: The iPhone maker dropped 4.9% after Bank of America cut its rating to neutral from buy, warning of weaker consumer demand for its popular devices. The selloff erased roughly $120 billion from Apple’s market capitalization.

Nike down 10%. Inventory up 44% QoQ. Nike’s inventories in North America grew by 65% compared with the prior year, management said, and by 44% on a global scale. The company will be forced to heavily discount its products to get rid of the excess off-seasonal goods, management said, which will have a negative impact on margins.

Netflix

Netflix upgrade:

Last week.
Two this week. $283.

Netflix up 35% in quarter from $175 to $240.

Advertising $’s. $65/1000 views.
Advertisers may allocate from Meta to Netflix.

Federal Reserve

The Fed led by Jerome Powell raised the Fed Funds rate 75 bps to 3.0 - 3.25%. Expectation is now 4.0 - 4.5% by year end. Powell is determined to sink the economy to drive inflation to 2%. Why 2 and not 3%. We have a strong economy, strong underlying demand, low unemployment and the Fed is determined to destroy that. Data suggests inflation is retreating.

CathieDWood (@Cathie Wood) Tweeted: The Fed is basing monetary policy decisions on lagging indicators: employment and core inflation. Leading inflation indicators like gold and copper are flagging the risk of deflation. Even the oil price has dropped more than 35% from its peak, erasing most of the gain this year.

Commodities

Commodities are down.

Lumber: $410 down from $1300 in February 2022.
Copper at $334 from high of $494 in March.
Iron Ore $150 to $109.
Oil? Not so much

Housing

Housing: 30 year mortgage rate is up from 3% to 7%. This has the effect of doubling the payment on the median house over the last year. 2 years ago: 30-yr mortgage rate was 2.88% & average new home price in the US was $405k. Today: 30-yr mortgage rate is 6.7% & average new home price is $522k.Result: $23k increase in down payment (assuming 20% down) and 100% increase in monthly payment (from $1,345 to $2,694).

Home Sellers are Scarce: Homeowners with low mortgage rates are balking at the prospect of selling their homes to borrow at much higher rates for their next homes, a development that could limit the supply of houses for sale for years to come.The number of newly listed homes in the four weeks ended Sept. 18 fell 20% year-over-year, according to real-estate brokerage Redfin Corp.

Tesla

Tesla Recall. NHTSA FUD. Tesla is recalling more than a million cars because of defects in their automatic windows that could injure passengers, the nation's auto safety regulator said.

Great example of why its important to seek the truth and understanding. Stock is down for no logical reason; save market fears.

FSD Beta. Rolling out to all owners with driving score >80.

Margin domination: 50% CAGR Revenue and earnings.

- direct distribution w/o 3rd party dealers

- vertical integration through owning their supply chain

- manufacturing & materials innovations

- higher ASPs

- industry leading output rates

- FSD & software rev

Tesla AI Day. https://twitter.com/elonmusk/status/1575499184764899328?s=51&t=_58cbojJsDAvJdNOoPt_-g

Note, this event is meant for recruiting AI & robotics engineers, so will be highly technical
As well as advanced chip & supercomputer engineers for next-gen training & inference

What are Jim and Mary thinking?

Tesla Twitter: https://twitter.com/techemails/status/1575598387335901190?s=51&t=zkcLpxX1jtdlxESfptGgiw

Recommendations:

Dahmer??
Elvis? Maybe.
House of Dragon. Last episode jumped 10 years.

Quote: Children are happy because:

They’re not self conscious.
They lack a sense of time pressure
They’ve no goals.