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.
- 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.
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 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: 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 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
- 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.