Big Tech in the Red

Silver Banana goes to... [Bobacino. ]() Market Snapshot Futures were in the red Tuesday morning, weighed down by earnings misses from the likes of GM and Wally World. Earnings season rolls on. Treasury yields retreated, while oil slipped below $95. DeFi benchmarks sold off. The VIX closed around 25. At the end of the day, the Dow was down 0.72%, the Nasdaq lost 1.87%, and the S&P dropped 1.16%. 94% of consumers in their 20s drink “boba”, which could generate 128% market growth in five years. You can invest in the company at the center of that growth with robotic bubble tea kiosks. [Become a Bobacino shareholder here.]() Let’s get into it. Banana Bits - What are the chances of a [100 bps rate hike]()? - Student loan servicers have been told to hold off on [sending out bills](=) - It’s not too late to book a flight or two for this summer, and there are [some hacks](=) we think you should be aware of - [Automation is the future](), and getting in before the next boom is the best way to get your nut - [Personal finance](=) habits are important, but sometimes you have to live a little while still making it work Banana Brain Teaser Yesterday — What can’t speak but will talk back? An echo. Today — It’s 50 bananas off of ANY of our $97 [courses]( for the first 15 correct respondents. Don’t miss your chance to take your pick and master one of these important subjects. Let’s go, Apes! During which month do people sleep the least? Shoot us your guesses at [vyomesh@wallstreetoasis.com](mailto:vyomesh@wallstreetoasis.com?subject=Banana%20Brain%20Teaser) with the subject line "Banana Brain Teaser" or simply [click here to reply!](mailto:vyomesh@wallstreetoasis.com?subject=Banana%20Brain%20Teaser) Macro Monkey Says Energy Hostages — Russia is holding Europe hostage. Yesterday, European nations reached an agreement to chop down their energy use in the next eight months, with the possibility of a cutoff from Russian NatGas on the horizon. The overall chop is a 15% voluntary reduction by next month across the board, but there are other stipulations for some nations whose grids are built “Texas style,” i.e., not completely connected to the rest of the European grid. Analysts think that this 15% reduction should get the Eurozone to the spring without blackouts or a deep recession. While some of us have logically asked, “why can’t they just go back to using coal?” that is simply not possible at this point in the game. Reopening a shuttered coal-fired facility to generate power for the public’s consumption is not an overnight affair. It requires an infrastructure project and couldn’t happen quickly enough to make a significant difference. The government has not really clued consumers in Europe into how much they should plan to throttle their own energy usage. It might be too soon to really talk about last week’s heat wave, but most healthy people don’t sweat to death when it’s hot – they are just miserable. However, in the winter, people can actually freeze to death, and that is a legitimate risk in the coming months. The government wants to leave residential power consumption off the table, but I’m not certain that industrial power consumption cuts alone will be enough to solve this problem. After hearing that Russia is chopping Nord Stream energy flow from a mere 40% of pipeline capacity down to 20%, it’s pretty likely that problems are only going to get worse. It was easy to jump onboard a combined western anti-Putin platform when the war in Ukraine kicked off and when many officials expected a “short and sweet minor incursion” into Ukrainian sovereignty. Things look way different five months later. Europe is already in inflation hell, and its economy is slowing. Further energy issues could be a catalyst for another geopolitical crisis and/or catastrophe, or they could be a concrete cinder block around Europe’s ankle as these disparate Eurozone economies attempt to stay afloat during a coming recession. Putin isn’t a healthy guy. There are even rumors that he used a body double on a recent trip abroad. He is a wildcard with unpredictable behavior. I wouldn’t be shocked if things got worse before they got better. Invest In The Robots At The Center Of 128% Market Growth [image]() The ”boba” market could grow from $1.9 billion to $4.3 billion in five years, thanks to a [bubble tea tidal wave]( on the horizon. But the only way to ride this one is with automation. Bobacino can operate at 6X the profit margin of other boba vendors, making it easy to add locations in high-traffic areas like malls and airports. [Become a Bobacino shareholder before the boom]() What's Ripe 3M Co ($MMM) — This was an earnings call full of news. Whether we are talking about lawsuits from the federal government, spinning off new businesses, declaring bankruptcy, or just the boring top and bottom lines, this call had it all. After slightly beating EPS estimates and delivering revenues in line with analysts’ expectations, shares of $MMM climbed 4.85% yesterday on all of the extra news in the earnings report. General Electric ($GE) — This one is a tale as old as time: post-blowout earnings, and you can earn favor with the bulls. That’s exactly what happened for $GE. These cats almost doubled bottom line estimates, sending shares absolutely ripping yesterday. The key to their success this quarter: their engine business, particularly as it rode on the back of a recovery in aviation following the craziness with C19. Shares of $GE finished the day up 4.56%. What's Rotten Amazon ($AMZN) — Big Tech got rekt yesterday, and $AMZN was at the front of that pack. Investors are generally worried about Big Tech’s earnings, and after last quarter’s shellacking, they’re exceptionally worried about Amazon’s. Yesterday, shares of the everything tech giant dropped 5.23%. Their earnings release is scheduled for the 28th – mark your calendars; there could be fireworks. Walmart ($WMT) — After a tough first quarter with inventory management challenges, Wally World lowered their margins even more in the second quarter, leading to a reduced bottom line. In general, the consumer is softening, but Wally really noticed it this quarter. After a crappy quarter, shares of the retail giant shed 7.64% yesterday. Thought Banana Not Gonna Take It — Earnings season is in full swing, and that means plenty of news with interesting surprises here and there. Factor in a monster week for economic data and an update to the definition of a recession by people who obviously know what they’re talking about, and that’s a recipe for excitement. One interesting earnings season story is Walmart. Their shares were down 10% pre-market yesterday, and the bulls did not win the day. For a company with a $360Bn market cap, this is a huge hit to the broader market in a single move. The pandemic really messed with their supply chain, and with supply chain problems come inventory management problems. We had already noted that growing inventories of the wrong kinds of goods were slowing some retailers down. Walmart is no exception. They announced in May that their inventories were jacked up, forcing them to run deeper discounts at lower margins than usual. These discounts are bringing in revenue, but Wally is struggling to sell higher-margin products. They already operate near cost in their grocery business; now that they’re discounting a whole slew of goods to move some inventory, it was time for their leadership to slash guidance. Retailers nationwide have started to notice a softening consumer. The only people who are continuing to spend at pandemic levels are the rich; they keep swiping their credit cards left and right. Bed Bath & Beyond and Gap are in the same camp as Wally. They’ve chopped their guidance, issuing profit warnings for the rest of the year. This take is actually contradictory to news from a few weeks ago that showed strong retail numbers in spite of weakening sentiment and a softening consumer. What does this mean for markets? Well, it’s likely that the roller coaster ride is just getting started. Equities markets are one of the greatest tools to glean insights into human psychology. Right now, it looks like investors don’t think that the consumer is feeling confident about the short-term future of the economy. Wise Investor Says “The only reason to save money is to invest it.” — Grant Cardone Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? Sign up for the WSO Daily Peel [here](). [ADVERTISE](=) // [WSO ALPHA]() // [COURSES]( // [LEGAL](=) Don't want The Daily Peel? [Unsubscribe here](. Click to [Unsubscribe]( from ALL WSO content IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States (617) 337-3353