4th Quarter Comeback

Silver Banana goes to... [image]() Market Snapshot Stocks started the 4th quarter on a tear after a miserable first three to start the year. Bond yields and the USD are both retreating, giving equities some breathing room. Fears that the 10-year would sail past 4% have moderated, for now. The labor market is loosening up a bit, with layoffs increasing and job growth slowing. While bad for workers, it could help ease inflation. At the close, the Dow jumped 2.80%, the Nasdaq skyrocketed 3.34%, and the S&P soared 3.06%. WSO has partnered with Bloomberg Exam Prep to offer a whopping 100 ‘naners off regular GMAT prep plans. For this application cycle only, use their prep technology to crush the GMAT. Get the score you need to set your application apart. [Use this link]() Let’s get into it. Monkey Meme of the Day [image]( [Source]( Banana Bits - Cargo ships are [staying docked]() as global shortages turn into gluts - The UN [warned central banks]() to slow their pace of tightening, citing risks of global recession - The job market is still incredibly tight, but it’s also showing [signs of loosening up]( - Home builders are [selling bundles of properties]() to investors as they struggle under falling prices Banana Brain Teaser Yesterday — Forwards I am heavy, but backwards I am not. What am I? Ton. Today — It’s 50 bananas off of our [Investment Banking Interview Prep Course]() for the first 15 respondents. LFG! A man lives on the top floor of a hotel. When he is out with a friend or out on a rainy day, he comes back, goes to the elevator, and goes to the top floor. When he goes out alone or on a sunny day, he goes half-way up and walks the rest of the way up. Why? 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 Searching For the Other Shoe — Investors woke up on Monday with the nightmarish third quarter behind them, wondering if early gains were a sign of a strong Q4 to come. Some questions going into the final stretch of the year include: - Is most bad news priced in? Could good news on the war or inflation cause a face-ripping rally? - Wtf is happening with Credit Suisse? Are they doomed, or is the hype about them going under overblown? - Are we in a recession, is a recession coming, what will it look like, and how do we even define a recession anymore? Opportunists are looking for signs of peak inflation, as big rallies tend to follow once inflation is broadly thought to have reached its high point. More layoffs will also be something to keep an eye on, especially in big tech. If the most well-funded companies on the planet can’t afford to keep people, everyone else could be in trouble. Across the pond, fingers are crossed for a mild winter that allows the European economy to function as well as possible without the burden of sky-high energy prices. The Best Way to Prep for the GMAT [image]( WSO has partnered with Bloomberg Exam Prep to offer a whopping 100 'nanners off regular GMAT prep plans. For this application cycle only, get the score you need to secure your seat at a T20 or even a Magnificent 7 MBA program. The admissions process is rigorous & highly competitive. Set yourself apart with a prep plan to master the entire exam curriculum. Leverage adaptive learning technology, premium content and one-on-one tutoring to earn your best score, guaranteed. [Use this link]( What's Ripe Peloton ($PTON) — Yup, embattled Peloton joined the rally Tuesday on news that its bikes will be in [all Hilton-branded hotels]( going forward. Despite its struggles, it still has a strong brand. Investors liked the pivot away from its direct-to-consumer model. The Hilton news builds on top of its recent announcement that Peloton bikes will be sold in DICK’s Sporting Goods, hinting at a traditional-retail future for the company. $PTON was up 18.61% by the end of the day. Shopify ($SHOP) — Shopify rode the wave of growth stock optimism this week as investors saw solid value after a brutal year. $SHOP may not be the threat to Amazon it was once hoped to be, but with a P/E less than half of where it was at its IPO, value signals are blaring. Side note, Shopify’s CEO has been [loading up on Coinbase](=) stock in recent months. $SHOP was up 13.58% by the end of the day. What's Rotten The VIX (VIX) — It’s been quite a ride for the VIX over the last six months. After sharp rises in May and June, it lulled for a while until another spike last week. Investors are assessing whether the recent moves are a head-fake or something more. It’s sitting at a hair below $30, and many have been waiting for it to cross $40, which has been a reliable signal in the past few decades of a market bottom. The VIX ended the day down 3.59%. The US Dollar (DXY) — Although it can cause a host of global issues, a really strong dollar is a great inflation-fighting weapon domestically. But the biggest US companies, which heavily influence the direction of the economy, have global operations. For them, the benefits of dollar strength are tempered by foreign exchange headaches. All-in-all, a pause in the dollar’s rapid rise is probably good for the global economy at this point. DXY is down 3.45% in the past week. Thought Banana JPow Needs Better Data — After the stock market freefall in March 2020, the Fed took immediate action, cutting rates to near-zero in just a few months. The market responded swiftly, returning to its pre-C-19 peak by the end of that summer. Yet rates stayed near the floor for another year and a half while JPow and team dismissed the inflation that was surfacing as “transitory.” It kept ballooning its balance sheet with bond purchases all the while. Investors have been asking all sorts of questions about this reactivity: - Why has it been so behind the curve, reacting to problems instead of managing monetary policy to prevent them? - Could better data have revealed earlier that recent inflation wasn’t quite so transitory? - Will it time its current set of rate hikes better, or will it be behind the curve again? Some of these are hypotheticals, but more real-time data is out there, sitting in spreadsheets at the likes of Visa, PayPal, Zillow, and grocery stores across the country. Relying on labor and price data that lag multiple months would be like using a GPS that tells you what turn to make 15 minutes ago. It’s limited in how helpful it can be for decision-making. I have no idea what a data-sharing agreement between payment companies and the Fed would look like, but we would all benefit from more informed monetary policy based on the most current data JPow can get his hands on. Wise Investor Says “Don’t look for the needle in the haystack. Just buy the haystack.” — John C. Bogle 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. 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