Moving Down South

U-Haul, the moving and storage services provider, released its annual Migration Trends Report. [The Daily Peel... ]() January 5, 2024 | Peel #620 Silver banana goes to... [CFA Institute. ](=) In this issue of the Peel: - According to the ADP National Employment Report for December, the U.S. economy added 164k jobs during the period. - Peloton and Digital Asset Stocks had a ripe day, while Mobileye and Walgreens suffered share price declines. - U-Haul, the moving and storage services provider, released its annual Migration Trends Report. Market Snapshot Happy Friday, apes. Alright, it’s been a whole 4-days of working in a row—can we finally go back to the days when our only job was to say “Happy holidays” as frequently as humanly possible? Damn, I miss Santa. But on Thursday, equity markets tried their best to play that role of Santa I personally miss so much. It didn’t work out well after about 11 am as markets sold off for pretty much the remainder of the session, but we respect the effort. 2024’s 3-day “year of the Dow” trend continued, however, with the index gaining 3bps to lead for the day once again, while the Nasdaq’s 0.56% loss led the way lower. The apes at WSO Alpha showed off their true power of outperformance again, too, losing only 0.21% while our benchmark fell much further. Nice job, guys, but how about you just stop losing my money instead? Meanwhile, bond yields reversed their recent trend of moving lower as the 10-year crossed the 4% line again and actually held its position at or barely above that line to close the session. The 2-year moved higher as well, crossing over 4.40% a few times on Thursday but mostly chilling between 4.35% and 4.40%. Let’s get into it. Set the standard. [image](=) If you care about the state of the world and want to set it on a better course, we have a solution that may be somewhat surprising: work in finance. At CFA Institute, our courses are deeply rooted in ethical perspective. But we don’t just teach — we create codes of conduct, and impact key policy issues with global governments and regulators. Visit [cfainstitute.org/setthestandard](=) to join a global network of investment professionals setting the standard through performance with purpose. [Get Started]( Banana Bits - While stocks have been falling, at least one thing is on the rise: [bankruptcies.](=) - Zuck is going through tough times, apparently, selling almost [$500mn worth of Meta stock](=) in the past 2-months… we just hope he’s still able to feed his family. - Investors are [bailing on Industrial stocks](=) at Bank of America just like how customers bailed on SVB last year. Macro Monkey Says The Previews I can’t believe I’m saying this, but while applications for summer 2025 analyst positions have begun to open the floodgates at investment banks, so too have the floodgates opened at Harvard for [this TA position]( in the school’s “English 183ts: [Taylor Swift and Her World](=)” class. I'm not sure which one of those jobs sounds more tortuous, but if you get in on the latter soon enough, you too can be part of the report we’re about to talk about for next month. That’s right, apes. It’s officially jobs day on this glorious Friday as the Bureau of Labor Statistics is set to release the final employment situation report for 2023. But yesterday, we got a little bit of a preview of the action to be released (or that was released already, depending on when you decide to roll out of bed) today at 8:30 am. Shoutout to anyone out there reading this who put some trades on, but let’s get to the numbers from Thursday. According to the ADP National Employment Report for December, the U.S. economy added 164k jobs during the period, beating out both the 130k expected and the 101k seen in November. "... the U.S. economy added 164k jobs during the period, beating out both the ..." Leisure & hospitality and construction jobs led the way for growth, while manufacturing continued to try to bring us down. Financial activities jobs saw a healthy gain as well, adding 18k last month that I can only assume came entirely from The Daily Peel email list. Not only did the number of job additions beat expectations, but so did wage growth. Workers who stayed in the same job in December that they had in November saw their earnings get a 5.4% bump, a slowdown in growth but still higher than expected. Meanwhile, workers brave enough to tell their old bosses to f*ck off saw an 8% increase in their earnings. I guess fortune really does favor the bold. But, the ADP report—despite stealing the show on Thursday—isn’t the only Preview to last month’s jobs data we’ve received so far this week. "The Job Openings and Labor Turnover Survey (JOLTS) report was released ..." The Job Openings and Labor Turnover Survey (JOLTS) report was released on Wednesday, giving us a read on employers’ appetite for fresh meat*—I mean new employees. In the report, we learned that job openings—and, by proxy, demand for labor—have fallen to their lowest level in nearly 3 years. Openings are now officially at 8.79mn, right in line with the 8.8mn expected and the lowest we’ve seen since March 2021. The real shocker there might be that March 2021 was almost 3 years ago, but the main point is that the ratio of available jobs to unemployed Americans fell to 1.4, a still-high level by historical standards but drastically improved from the 2-to-1 ratio we saw for much of 2021 and 2022. And once again, both reports further suggest that Fed Chair JPow might be a better pilot than [Sully](=). This data supports the narrative for a soft landing as job additions are still plentiful, but demand for those jobs from employers continues to recede. That means wage growth will slow, which should lead to further reductions in the growth of inflation. Plus, at 5.4% growth, wages are outpacing inflation by 2.3% compared to the 3.1% CPI reading we saw from November. We get December’s CPI this coming Thursday, so stay tuned because that report could be the biggest vibe killer of 2024 yet. Although we’ll only be 11 days in by then, as we’ve seen so far, killing the vibe has been common practice for many this year, so the competition is already stiff. We’ll see. What's Ripe Peloton (PTON) $6.13 (↑ 13.94% ↑) - Fairly sure Peloton was supposed to go bankrupt at least 69 times by now, but clearly, the people running the simulation want to keep us entertained a little longer. - And, by partnering with TikTok, Peloton itself is making sure its customers stay entertained as well. On Thursday, the e-bike-based exercise company announced a partnership with TikTok cringe-il-y named “#TikTokFitness Powered by Peloton.” - Despite the fact that I just threw up after typing that, the market is pretty excited. The goal here is apparently to shed Peloton’s reputation that it’s only for rich people to work out for a few weeks and then use their bikes as really expensive coat racks. - To do so, the company will offer short-form video exercise classes on TikTok along with longer-form live stream sessions as well. Idk about the longer ones, but workouts that are limited to 1 minute or whatever the max video length on TikTok is sounds sweet to me. Digital Assets (BTC) ~$44.22k (↑ 3.90% ↑ last 24 Hours) - Math is hard, especially for investors. But yesterday, one brave analyst decided to take on the beast of numbers and figure some sh*t out about the coming spot BTC ETF. - At this point, the launch of those funds from BlackRock, Fidelity, and certainly others is almost a given—it’s now just a question of time. Optimism appears to be growing that we might not see a delay beyond the current Jan 15th deadline for the SEC to issue approval, and BTC bulls are hyped. - So, despite the rally in coin prices this increased optimism has brought along, analysts at Mizuho are less confident this will actually translate to a material growth driver for associated stocks like Coinbase. - Basically, he argues that the custodial business Coinbase will provide to these fund managers for holding their actual BTC for them may only amount to $25-$30mn worth in fees for that custody. For an industry used to ungodly massive growth, that might not actually move the needle, but despite the FUD, Coinbase shares still gained 2.21% on the day. What's Rotten Mobileye (MBLY) $29.97 (↓ 24.55% ↓) - For a company with “eye” in its name, they sure didn’t see this one coming. With that said, they absolutely should have. - Shares in the 88% Intel-owned maker of self-driving technology for major automakers tumbled as the firm apparently just became “aware of excess inventory at our customers.” - Apparently, all the stocking up and over-ordering done by these firms since the pandemic shredded global supply chains wasn’t enough of a hint. Now, the firm is issuing revenue warnings as it expects customers to burn through their overwhelming supply of chips as opposed to purchasing new ones. Walgreens (WBA) $24.26 (↓ 5.12% ↓) - Like a screaming toddler, shareholders in Walgreens don’t care about actual business results—they want their cash, and they want it now. So, when Walgreens slashed their dividend yesterday, the selling was off to the races. - From $0.48/sh each quarter to $0.25/sh, Walgreens cut their dividend by ~48%. That eviscerated any optimism the market may have had after seeing the company deliver a solid beat on the top and bottom lines. - Walgreens reported earnings of $0.66/sh on $36.7bn in top-line sales vs expectations for just $0.61/sh on $34.9bn. - But obviously, no one cared because along with those results came the loss of the title of “highest paying dividend” in the Dow Jones. That 48% of dividends getting cut is planned to get reinvested back in the business, but again, screaming toddlers only care about what’s happening now. Thought Banana U-Haul Growth Index When I think about U-Haul, a few things come to mind. Moving, loading up trucks, and, most of all, an angry dad in the driver’s seat getting reminded of why he’s always so disappointed in his children. The point is—never once have I heard “U-Haul” and thought “macro data trends provider” or “demographics tracker.” But apparently, that’s just as true as my parents' disappointment. Nevertheless, the moving and storage services provider released its annual “Top Growth States” on Tuesday, where they detail the U.S. states that had the highest number of net residents moving in along with the highest number of net residents moving out. Launched in 2005 under the name “Migration Trend Report,” the 2023 numbers appear to have only continued to build on trends established during the pandemic. "... but it’s a realistic, real-time perspective ..." So, the data is measured by counting the number of one-way U-Hauls going from one state to another state. It’s not perfect, as this only accounts for DIY movers using U-Haul, but it’s a realistic, real-time perspective on the general popularity of moving to certain states vs others, unlike the “estimates” from certain government bureaus. In 2023, the top 5 states to move to include: - Texas - Florida - North Carolina - South Carolina - Tennessee That marks the 3rd-year in a row where Texas and Florida top the list. Keep in mind this isn’t necessarily the highest rate of migration—it’s absolute, net numbers. So, it makes sense that a state like Texas, with nearly 30 million people, would routinely beat one with 10.5 million like North Carolina. And, of course, the states with the least amount of net movers include: - California - Massachusetts - Illinois - New Jersey - Michigan Notice anything? The pandemic-era trend of moving to states with better weather and a lower overall cost of living is still alive and well even if C-19 no longer is. "... it appears that Florida would absolutely dominate that #1 spot ..." If we’re going by rates, however, it appears that Florida would absolutely dominate that #1 spot as U-Hauls says that “Florida remains equally appealing to new residents, netting almost as many one-way U-Haul customers as Texas in 2023” despite having only ~73% of Texas’ population. Compared to the rest of the country, the south wins again. Thank god we couldn’t say the same thing in 1865, but it will be interesting to see how long this trend can last, if at all, from here on out. I mean, after all, snow does suck. The Big Question: How long-lasting will the migration to Sun Belt states last? What can states like California and Massachusetts do to attract residents again? Banana Brain Teaser Yesterday — A souvenir vendor purchased 1,000 shirts for a special event at a price of $5 each. The vendor sold 600 of the shirts on the day of the event for $12 each and 300 of the shirts in the week following the event for $4 each. The vendor was unable to sell the remaining shirts. What was the vendor’s gross profit on the sale of these shirts? Answer Gross profit is revenue minus the cost of goods. Therefore, $8,400 (600 shirts at $12 and 300 shirts at $4) minus $5,000 equals a gross profit of $3,400. Today — There are five sales agents in a certain real estate office. One month, Andy sold twice as many properties as Ellen, Bob sold 3 more than Ellen, Cary sold twice as many as Bob, and Dora sold as many as Bob and Ellen together. Who sold the most properties that month? Shoot us your guesses at vyomesh@wallstreetoasis.com. Wise Investor Says “Owning stocks is like having children—don’t get involved with more than you can handle” — Peter Lynch How would you rate today’s Peel? [All the bananas]() [Decent]() [Rotten AF](=) Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? [Be smart like your friend](=). [ADVERTISE](=) // [WSO ALPHA]( // [COURSES](=) // [LEGAL]( Don't want The Daily Peel? [Unsubscribe here](. 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