Waiting With Bated Breath

[The Daily Peel... ]( Mar 9, 2023 | Peel #415 Silver banana goes to... [Brilliant. ]() Market Snapshot Happy Thursday, apes. We all know by now that just one day of JPow spittin’ game is never enough, but sadly (maybe gladly?), yesterday’s testimony was a lot less eventful. Markets, fortunately, didn’t absolutely roll over again, with the main U.S. indices trading down for most of the day only to gap up late in the session, finishing mostly green unless you’re the Dow. On the downside, there was less hilariously total incompetence in macroeconomics on the part of our just wonderful Senators. Yields did retreat, although mildly, with the 2-year still parked above 5% while the 10-year can’t make up its mind around the 4% level. Dollar movements were more muted as well, from thrilling on Tuesday to more so just chilling yesterday. Let’s get into it. [image] Small Investment, Massive Returns [image](=) The secret to keeping your edge in investing and everyday life? 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Now, it’s time for the 21-gun salute as the [firm takes its final breath]( - Hold up; we be making sh*t again? Apparently, as [U.S. manufacturing growth]( outperforms *checks notes* everyone else - “Quite a lot of turmoil” is about the most PC way JPow could’ve described the current state of crypto, but he (allegedly) has [no plans to bust the party]( from a policy perspective (allegedly) Macro Monkey Says The Moment You’ve Been Waiting For I know, I know, it’s been a grueling and borderline traumatic past 24hrs since I teased a “JPow Speaks: Part 2” yesterday. Well, unlike literally everyone and everything else in 2023, we don’t want to disappoint. To sum it up in a word, we’re unimpressed. Your personal economic overlord and Chair of the Fed Jerome Powell came out so hot, so fiery on Tuesday only to cap such a spicy testimony with a Fed speech so boring I thought we were in pre-pandemic times again. Instead of a Fed Chair, we might as well have just had a regular chair sitting there. But despite the conventional monotony of JPow’s remarks, we sure did learn a lot over the past few days. Yesterday, we went over much of the message Powell tried to relay to markets. Today, let’s take a look at what the marker actually heard. To hit some of the big points up front: - The Fed is not going to stop raising rates until the labor market loosens up a bit, meaning we are aiming for higher unemployment and spiking Elizabeth Warren’s blood pressure - Friday’s jobs data and next week’s CPI drop are expected to be make-or-break moments in deciding the size of the rate hike - JPow is likely leaning towards a 50 bps hike because there’d be little other reason for him to scare the market into peeing its pants like that - He made damn sure the market and the broader public know that he and the FOMC gang can’t do sh*t about the debt ceiling Prior to this week’s testimony, we wouldn’t blame you for thinking the Fed might be incorporating things like the cost of financing a home purchase, government debt, or consumer loan payments into their rate-hiking escapades. Now, it’s clear there’s pretty much just one thing in focus: JOBS. Yesterday’s JOLTS reading confirmed there remain nearly 2 available jobs for every 1 unemployed American. Keep in mind, however, that those figures incorporate only those actually considered to be in the labor force, which is approximately 165mn people, or about half the U.S. population. There are still plenty of us out there jobless that don’t need diapers. Since peaking right around 2000, the labor force participation rate across the U.S. has been in a secular decline, only reinvigorated by a dose of C-19, as the chart below shows. Why exactly that has occurred is way above my pay grade, but it seems likely that digitization, outsourcing, rich parents, and the social decline of respect for a 9-to-5 have something to do with it. This will add a layer of difficulty to JPow’s goals. I mean, the FOMC effectively has to make short-term decisions with long-term impacts, given the frequency of meetings along with the lag of monetary policy effects. No one’s ever gonna be happy with the Fed’s decisions, so just like an umpire, as long as both sides of the argument stay mad, we’re looking good. Expect hella volatility to linger until at least the 22nd, when Powell gets another chance to shock the nation. It’s gonna be a fun end to the week as Mr. Market steeps in anticipation for Friday’s jobs report. To say we’re excited is an understatement. What's Ripe Swedish Match ($SWMAY) ↑ 5.05% ↑ - Makers of addictive products are often viewed as safe places to park cash and wait out the storm of a dreary macro environment. With that in mind, Swedish Match had this last quarter zyn the bag. - The make of popular nicotine products like America’s Best Chew (aka Red Man), White Owl cigars, and the king of them all, Zyn nicotine pouches, crushed its latest earnings report despite approximately 0 people knowing what the hell this OTC name even is. - The U.S. listed ADRs surged on the beat, gaining over 5% on still-low volume. Both the top and bottom line beat the one reputable analyst expectation I could find, but who even cares; they’ll be wholly owned by Phillip Morris soon anyway. - Nicotine is a difficult zyndustry, to say the least, and outside of the big dawgs like Altria and PM, it’s almost zynpossible to succeed without zynsecurity. Okay, I think my brain is broken; will someone pass me a tin of Spearies already? CrowdStrike ($CRWD) ↑ 3.19% ↑ - Maybe AI isn’t the only thing working in tech lately? Looks like the homie cybersecurity is helping carry the team. - At least, that’s what CrowdStrike’s latest earnings report suggests. The cloud-based cyber firm posted a beat on both earnings and revenues, raking in $0.47/sh on $637mn in top line sales vs. guesstimates for $0.43/sh on $625mn. - But that wasn’t the only strike the company threw at the crowd. Guidance for the firm’s next fiscal quartet smashed expectations as well as Wall Street remembered that security is something that most companies do kinda care about. - If that wasn’t enough, seemingly every Wall Street firm raised their price target on CrowdStrike, helping the firm avoid the wrath of JPow felt by the rest of the market over the past two days. What's Rotten United Natural Foods ($UNFI) ↓ 28.05% ↓ - It’s not just this company’s stock that was rotten yesterday; it was their entire damn product line. - There were all too many brown bananas in United Food’s latest quarterly report. Earnings of $0.78/sh were off 43.1% from market expectations, while sales missed too, but not as bigly. - United specializes in all those cringey organic/“all natural” foods that your pretentious friends post on their IG stories. Apparently, demand is drying up as, along with last quarter’s dumpster-fire performance, guidance for the year was chopped like onions. - Obviously, our top priority is, of course, the company’s bananas. Unfortunately, United doesn’t segment out this product line, but based on yesterday’s price action, it’s safe to assume they’re definitely not Silver. Silvergate ($SI) ↓ 5.76% ↓ - I guess Silvergate heard us all humming along to Taps earlier this week because the company has officially confirmed they are all but dead. - Late in the day on Wednesday, the non-crypto crypto bank announced its intention to decapitate itself and rip its own guts out. Basically, they’re shutting down operations and liquidating the bank’s holdings. - It’s the death knell crypto-haters have been praying for nightly for far too long of a time now. RIP Silvergate, gone but never (actually, probably soon) forgotten. Data Peel Labor Force Participation Rate (April 1989-) [image] [Source]( Thought Banana The Clock Is Ticking More accurately, the clock is Tik-Toking. And, no, I don’t mean that it’s doing some weird Jackson Mahomes-esque dance that everyone hates. Rumors have been swirling 5-ever about the potential for a TikTok ban in the United States. It’s basically every pre-teen’s worst nightmare, but thankfully, those punks have a good few years before any politician actually gives a damn what they think. The Restricting the Emergence of Security Threats that Risk Information and Communications act, aka the RESTRICT act (damn, they get creative with these acronyms), has been introduced by 2 Senators and backed by 10 more, including 6 Democrats and 6 Republicans behind it. But settle down, not so fast. The bill does already have the backing of Joey B’s White House, but it’s not an outright, direct ban on the mentally-poisonous app. Basically, the Senators introducing the bill carry the goal of allowing the secretary of commerce in the U.S. to place broad restrictions on technologies out of 6 countries in particular: Cuba, Venezuela, North Korea, Iran, Russia, and, of course, China. “Adversarial” is the term we often label these countries as, but maybe “spooky, scary enemies” would be a better way to describe the government’s feelings here. Now, we all know I’m a bonafide idiot, but I might call my parents to tell them to re-mortgage their house and put all the cash on a bet that this bill passes. And that’s because it’s one of few (very, very few) legislative suggestions in recent history that isn’t dripping in partisanship. Both sides of the aisle are on board (for similar and different reasons at times), but one thing is clear: Congress hates TikTok. After all the lesser bannings, like on certain college campuses and government-issued hardware, this bill could be step one to an outright blacklisting of the app. To be fair, YouTube Shorts aren’t a bad replacement, but Instagram Reels still sucks. Banana Brain Teaser Yesterday — I have one, and you have one. If you remove the first letter, a bit remains. If you remove the second, bit still remains. After much trying, you might be able to remove the third one also, but it remains. It dies hard! What is it? “Habit.” Remove h and “a bit” remains; remove a and “bit” remains; remove b and “it” remains. Today — It’s 150 bananas off the [Venture Capital Course]( for the first 3 correct respondents. LFG! A man wants to enter an exclusive club, but he doesn't know the password. Another man walks to the door and the doorman says 12, the man says 6, and is let in. Another man walks up; the doorman says 6, and the man says 3 and is let in. Thinking he had heard enough, he walks up to the door and the doorman says 10, he says 5, and he isn't let in. What should he have said? 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) Wise Investor Says “If you’re not a little confused by what’s going on, you’re not paying attention.” — Cliff Asness How would you rate today’s Peel? [image]() [image]() [image]() [All the bananas]() [Decent]( [Rotten AF](=) 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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