Dimon’s Down Bad

Sponsored By April 14, 2022 Good morning traders, Welcome back to The Daily Setup. Markets were up yesterday, led by the tech sector. Here’s what’s on the docket today: - JP Morgan kicks off earnings szn - Meta wants a 50% cut in the metaverse - GlaxoSmithKine is buying Sierra Oncology The boys at HQ will be off for Good Friday and Easter, so we won’t be sending a newsletter for the next couple days. Have a great weekend and we’ll see ya on Tuesday. Nick How'd the markets look? Market Outlook Dust yourself off and buy again Biggest Mover [Activision Blizzard, Inc. ]( Antares Pharma got high on its own supply on Wednesday, gaining 49.20% after agreeing to be bought by Halozyme Therapeutics. Halozyme’s [$960M purchase]( price will amount to $5.60 a share, [marking a 49.7% increase]( from Tuesday’s $3.74 close. So who is Halozyme you may ask? They’re mostly known for their Enhanze product, an enzyme allowing intravenous drug treatments to take effect more quickly. - Antares stock had risen 4.76% YTD prior to Wednesday's big announcement. - Before the stock jump, Antares had a market value of around $640M, while Halozyme currently sits at $5.7B. - Halozyme restructured in 2019 after it failed a clinical study for a pancreatic cancer treatment drug. Typically, one drugmaker buying another wouldn’t be a big deal, but in the case of 2022, M&As in the pharma space have fallen significantly. Since January, just $78B worth of healthcare deals have occurred, down from the $162B over the same course last period. Market uncertainty amid Russia’s invasion of Ukraine and regulators getting trigger happy have lent to the downturn, and global deal volumes across all sectors are [down 28%]( from last year. Oh, Whoa, Oh, Jamie’s Cryin’ Street Stories [Cycling Downhill] Those poignant [Van Halen]( lyrics sum up [JP Morgan’s]( quarterly results and dour outlook on the economy as reported on Wednesday. The company reported a 42% drop in profits from the same period last year and issued a less than stellar forecast about the state of the American economy. The bank is setting aside $900M in new reserves to [prepare for a downturn]( driven by inflation and the ongoing turmoil in Ukraine. JPM fell 3.18% during trading. - Revenue was also down from 2021, posting $30.72B in Q1- a 5% decrease YoY but still ahead of the expected $30.59B. - One third of the $900M new loan loss reserves are related to Russia (of course), with the rest earmarked for fallout from the rising rate environment, which could cause a recession. - Meanwhile, Blackrock ([BLK]() was busy flexing during their earnings call yesterday, reporting a [20% increase in revenue from last year]( on strong asset management fees, despite a drop in AUM due to market volatility. JPM was the first of the big banks to report, so the negative sentiment could be a harbinger of what could become a parade of horribles when the rest of the financial giants release their numbers. If JPM ends up being the canary in the coal mine, the canary has contracted black lung and investors should plan accordingly when its [BAC](, [WFC](, [MS](, and [GS’s]( turns to report. Sponsored By: Electric Mowing Making the "Cut" Gas prices have risen [126%]( in the last 2 years. Job openings have [doubled](. And now, commercial landscapers lie smack in the middle of both crises. As these costs soar through the roof, they need cost-effective solutions to manage the world’s parks, golf courses, and solar fields. Fortunately, [Graze]( developed a smart mower to cut through the biggest problems facing this $100 billion industry. Their 100% electric, autonomous mower cuts labor costs by 50%, slashes fuel costs by 75%, and boosts margins by as much as 5x. Groundskeepers are chomping at the bit to access [this cutting-edge AI technology](. It’s no wonder Graze already brought in $32M in preorders. You can still [invest in Graze today](, but time is running out! Join Graze in sweeping this market [Invest here](. *See Disclaimer Below How to Get Robbed in the Metaverse Token Talk [Token Talk] In 2022, not only can you pay real money to buy fake land, but now you can pay Mark Zuckerberg a [commission of almost 50%]( for the privilege of doing so. Meta ([FB]() is planning to take a cut of 47.5% on the sale of digital assets in its Horizon Worlds virtual reality platform which sounds like a great strategy for building creator loyalty. I’m no McKinsey consultant (because I have a soul) but charging fees that the Mafia and the payday lending industry would consider onerous doesn’t seem like a winning play. - The commission rate works out to be 30% for a “hardware platform fee” and 17.5% for the pure cost of doing business. - A quick scan of the NFT marketplace tells us that OpenSea charges 2.5% of each transaction and LooksRare charges 2%, which begs the question to Meta, what in the actual f*ck is your plan here? - The [pilot program]( to let creators sell assets in the metaverse will take place in Horizon Worlds, which is accessible via the company’s Oculus VR headsets. People are out here buying digital land for absurd sums of actual money, meanwhile your humble correspondent is just trying to grind away one email newsletter at a time to hopefully save up and invest enough to not have to go to conference calls all day. I try to stay current on digital asset trends, but this one has me looking into retirement homes because I just don’t get it. Thankfully, that retirement home isn’t in the metaverse. Cancer is the New COVID Deals and Rumors [Deals and Rumors] Flash in the pan airborne viruses are so 2021, and big pharma companies may be looking to build their pipelines with cancer drugs going forward. British giant GlaxoSmithKine ([GSK]() is [buying Sierra Oncology]( for $1.9B. This acquisition, which sent Sierra shares up nearly 40%, is all about Sierra’s drug Momelotinib, which targets a rare bone marrow cancer known as myelofibrosis. Sometimes I lament not having gone to medical school, then I realize that since it took me 5 minutes to figure out how to pronounce Momelotinib it is probably best that I didn’t. - GSK is paying $55 a share for Sierra ([SRRA](), which is a 39% premium from the Tuesday closing price. - Patients with myelofibrosis often develop anemia, which causes them to stop receiving treatment. That’s where Sierra’s drug comes in to help combat this effect. - Industry analysts expect Momelotinib sales to reach $630M in annual sales by 2030. This move is a continuation of GSK’s strategy to focus on higher value drugs and exit lower margin businesses such as consumer healthcare- which the company plans to spin off in July. GlaxoSmithKline, which sounds like a law firm, is currently [under pressure]( from activist investor Elliot Management to make improvements, so expect more moves to come. Link Roundup Other News + In this economy? - Supplier prices rose 11.2% from a year ago in March, the biggest gain on record ([link]() + Better start peddling - Peloton activist Blackwells Capital takes aim at new CEO, again pushes for sale ([link]() + What cloud? - Google Is Betting Billions on Offices and Physical Locations ([link]() + Is this good, nerds? - Hasbro buys digital Dungeons & Dragons toolset with 10 million players ([link]() + I didn’t ava think it would happen - Ava Labs hits a $5B valuation ([link]() + What’s this charge, sur? - Amazon adds 5% surcharge to merchants for shipping costs ([link]() Meme of the day My enemies are after me, I need a larger raise, [via @swoph]( [other news] 62 Calef Hwy #233 Lee, New Hampshire 03861 United States Questions or concerns about our products? 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