🔬Shoplifting is a Boon for eCommerce, Newspapers are Disappearing, and Much More.

"The four most dangerous words in investing are: 'this time it's different.'"
- John Templeton

“If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem”
- JP Getty

Table of Contents

🔥 Hot Headlines
🤭 Joke Of The Day
📈 Market Movers
🙋‍♂️ Trivia
📊 Market Update

Hot Headlines

SHOPLIFTING LEADING TO ONLINE SALES - As retailers increasingly lock up items to combat shoplifting, including products as commonplace as Oreos, consumers are turning to online shopping for convenience, driving a surge in e-commerce sales of personal health and beauty products. Frustrated by the inconvenience and delays in accessing locked merchandise in stores, shoppers are opting for online platforms like Amazon and Costco, further intensifying the shift to digital retail. (Bloomberg)

FOOD DEFLATION - Walmart CEO Doug McMillon predicts a potential shift to deflation in the U.S. food industry after years of significant price increases, a change that could lower grocery costs but also signal weakening demand and economic challenges. And I’m sure the industry will pass all the prices savings on to the consumer... (CNN)

AMAZON TO SELL CARS - Starting next year, Amazon.com Inc. will enable customers to directly purchase Hyundai Motor Co. vehicles on its website, marking a first-of-its-kind partnership and potentially revolutionizing online auto retail, while traditional car dealerships and online car retailers like Carvana Co. face declining shares as a result. Online used-car dealer Carvana closed the day down 5.3%. No word yet if these will be Prime eligible. (Press Release)

BOEING SELLS LOTS OF AIRPLANES - At the 2023 Dubai Air Show, Boeing significantly outperformed Airbus with 295 aircraft orders, including a major deal with Emirates, signaling a strong market demand for wide-body jets and marking a robust comeback for Boeing after recent safety scandals and underperformance in previous years. (CNBC)

GM RATIFIES UNION DEAL - General Motors union workers narrowly ratified a new deal with the United Auto Workers, despite opposition at major assembly plants, while similar contracts at Ford and Stellantis are likely to pass with higher support. If I never write about auto unions again I’ll be happy. Nm, it’s a four and half year deal. Shoot me. (CNBC)

DEATH OF THE NEWSPAPER - The decline of local newspapers in the U.S. has accelerated, with projections suggesting a one-third reduction from 2005 levels by the end of next year, leaving many communities without a local news source. This trend has resulted in 204 counties without any local news outlets and about half of all U.S. counties relying on just one, often a weekly newspaper. There are now roughly 6k newspapers in the U.S. down from 8,891 in 2005.

I’mma miss local reporting.

(Verge) Lucid announces next electric vehicle, the ‘Gravity’. The SUV comes with a 440 mile range, an $80k price tag, 0-60 time of 3.5s, and I surprisingly don’t hate it. It’s…kinda nice.

That’s my new company mascot, Labby.

(Business Week) Cover story of this week’s Business Week is the incredible story of some hedge fund dudes turned Treasure Hunters.

(CNBC) Amazon says its first Project Kuiper internet satellites were fully successful in testing. Company plans to launch 3,236 satellites and spend over $10 billion in effort to compete with SpaceX’s Starlink.

(USA Today) World’s most famous pot advocate gives up on joint ventures.

(CNN) Thousands of Starbucks workers stage ‘Red Cup Day’ strike in union push. Apparently elections at 368 stores have voted for a union but as yet there is no contract with any of them.

(BNN) US homebuilder confidence falls to lowest since April, says National Association of Home Builders.

Joke Of The Day

🤦‍♂️I got an email asking me to invest in Egyptian architecture. Sounds like a pyramid scheme.

Market Movers

Winners!

• Sonos (SONO) [+17.1%]: Q4 results surpassed expectations, with a new $200M share buyback program. Guidance for FY24 is lower due to weak audio demand.

• Intel (INTC) [+6.7%]: Upgraded to buy at Mizuho Securities USA. Intel is expected to announce major new server products and Foundry customers in the next six months.

• Williams-Sonoma (WSM) [+6.2%]: Q3 EPS outperformed, but revenue fell short.

• Macy's (M) [+5.7%]: Q3 comps decreased less than anticipated, with a slight GM expansion and significant EBITDA and EPS outperformance. Key points include better-than-expected guidance and a healthy credit portfolio.

Losers!

• Children's Place (PLCE) [-24.9%]: Q3 EPS was terrible. Q4 EPS guidance significantly lower than market expectations.

• Cisco Systems (CSCO) [-9.8%]: Q1 EPS surpassed consensus and guidance, however, a 20% y/y decline in orders and weaker fiscal Q2 and FY24 guidance were noted.

• Alibaba Group (BABA) [-9.1%]: Q2 earnings exceeded expectations with steady 9% y/y revenue growth. Plans to fully spin off the cloud group were halted due to U.S. chip export restrictions, affecting the reorganization into six business units. Additionally, Jack Ma's family trust plans to sell 10M founder shares - because he’s still in a re-education camp somewhere.

• Walmart (WMT) [-8.1%]: Q3 EPS and revenue slightly surpassed expectations. Despite positive results, there's caution regarding disinflation and weakening consumer trends, along with a shift towards high promotional items. Target had the same quarter yesterday and shot-up 17%…because they were in the dumpster and Walmart is at all-time highs.

Trivia

Just some general investing trivia today.

1. The typical definition of a ‘Small-Cap’ stock is that it has a market capitalization between what goalposts?
   A) Between $250 million and $2 billion
   B) Between $2 billion and $5 billion
   C) Under $4 billion
   D) More than zero but less than a Large-Cap
   

2. Enterprise value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to market capitalization. What is included in the basic definition of EV?
   A) Assets - Liabilities
   B) Debt + Market Cap + Cash
   C) Debt + Market Cap - Cash
   D) Debt - Market Cap + Cash

3. What does 'Beta' measure in finance?
   A) A first order derivative of a stock's price movement
   B) A stock's volatility relative to the market
   C) A stock's liquidity
   D) A stock's price-to-earnings ratio

(answers at bottom)

Market Update

Trivia Answers

1. A) Market Cap between $250 million and $2 billion is the typical definition of a Small-Cap stock.

2. C) Debt + Market Cap - Cash is the basic definition of Enterprise Value.

3. B) Beta measures a stock's volatility relative to the market.

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