The Morning Market Feed, June 14th

We were expecting a PPI and Jobless claims report which were supposed to confirm the CPI report and make stocks run, but we already know one of those things didn’t happen. We saw the Musk pay package approved, and another push in court against him. Adobe posted earnings and is up 14.8% in the gap between market close, and pre-market. PayPal also had some news which resulted in the stock being down 3%. So let’s dive straight into it!

• PPI and Jobless Claims

As the PPI numbers came in, there were some good signs. Stocks popped up initially as the number came in as follows, and in the following order:

Month-Over-Month, Year-Over-Year | MoM Expectation, YoY Expectation

• PPI: -0.2%, 2.2% | 0.1%, 2.5%

• Core PPI: 0%, 2.3% | 0.3%, 2.4%

• PPI Ex Food, Energy, Trade: 0%, 3.2% - -

These numbers support the case for rate cuts, because we see inflation pressures fall quite a bit in this report.

We also saw the initial jobless claims come in a bit hot, as they came in at 242K, where 225K was expected, this was the highest number since the middle of August last year so it’s quite up there. We must also admit the chart of the continuing jobless claims, because we can see the tail pointing upwards towards a level where it has previously bounced back from.

The initial reaction from the markets was favorable, but as we can now see, most candle sticks on the charts are pointing downwards, even Shopify is down after 12 days. Not so great after all. So what is my theory about it?

It’s a bit of a tough one, because the 10Y-Yield is down, and rate cut expectations were up. So the difference here is worrying. With the increased rate cut expectations, stocks should rally, but it was only a small group that did so and pushed the S&P500 up 0.20%, the equal-weight S&P500 was down 0.28%. Seeing this discrepancy is quite worrying as good news is perceived as bad. This is the first time seeing this, so it’s a bit early to raise panic, but it’s a noteworthy development.

• Tesla can hold on to Musk

Tesla was successful in the pursuit of shareholder votes in favor of Elon Musk’s pay package, this was seen as a very important step by Tesla, but only one part of the problem. The issue here can be seen from multiple angles and we have also seen it interpreted that way. In my opinion, all of them make sense.
Because there was a contract, and however excessive it may have been, the targets set also seemed to be… let’s call it optimistic.
But about the excessiveness, the stock hasn’t performed all that well since it peaked in late 2021. Over the past 3.5 years, the stock has been down over 50%, and since money managers aren’t that widely known to be thinking about many other things than their own pockets when it comes to investments, the underlying reasons for the underperformance won’t be as interesting for them.
The ownership of shareholders is also quite diluted with the acceptance of this new package, because Elon will be holding many more shares or voting power.

In my opinion, there was a contract, and it was accepted by shareholders. I agree with the lack of independence of the board at Tesla, and I also still believe that it may be time for Musk to look at xAI, and SpaceX as his main occupancies. He has brought Tesla to a very good position for the future, but may now be in need of a more conventional CEO, that sticks with plans better, in stead of trying to capture everything and drop projects for the next best thing.

However, despite all the discussions on the pay package, now comes the fun part. Persuading a Delaware judge to recognize the pay package, through the same court that canceled his previous deal.

• Adobe Earnings

At market close yesterday, Adobe was 8.85% of the Growing Quality portfolio, but that number seems to be increasing slightly at market open today. How the stock will trade during the day will have to be seen. Remember lululemon being up 10 or so percent and dropping towards being almost flat during the day after. But we can look at the numbers the company posted.

Revenues were up 10% to $5.31 billion, while GAAP EPS was up 24%, and Non-Gaap was up 15%. Operating margin was 35.5%, and Net margin was 29.6%. A very welcomed recovery. Furthermore, the company repurchased 4.6 million shares. Later today I will be releasing a YouTube video in which I will take a way deeper dive into the numbers and the fears before the report.

• So why did PayPal drop 3%?

PayPal yesterday announced that Ebay will offer the option to pay with Venmo. In my opinion, a good development as we have seen the argument made that Venmo was under-monetized. So it’s good to see the options expand with the app. PayPal however can’t seem to get a break after the announcement of Apple allowing its users to hold phones together in order to pay anonymously. This is something that Apple already offers in some way, except for the change in now being able to pay anonymously by holding two phones together, it’s through a normal tap-to-pay. Now excuse my lack of understanding of this “new” competitive threat, but it seems like nothing really new. The drop in share price, combined with the update Alex Chriss gave does offer a buying opportunity for those who want to, as the future seems to get less risky.

That was it again for today. Let’s see how the market will end the week, and although it may still be early, have a good weekend!

The Morning Market Feed, June 13th

We saw markets absolutely take off on the CPI report which came in cooler than expected. The 10Y-Yield dropped over 3% to 4.25% and the Russell2000 jumped 3.25% before the rate decision. Following the FED speak/dot plot this somewhat clawed back and the day ended with the 10Year at 4.32%, and the Russell2000 up 1.53%. I will also have to come back on a story from earlier this week, which turns out to be different than first thought and reported.

• CPI

CPI came in flat on a month-over-month basis, and up 3.3% on a year-over-year basis. This compares to expectations of 0.1% (MoM) and 3.4% (YoY).
The core CPI number came in at 0.2% on a Month-over-Month basis, and 3.4% on a Year-over-Year basis. The expectations were for 0.3%, and 3.5%.
The cooler-than-expected CPI numbers sparked wide enthusiasm and hope for rate cuts, as this is what the markets are anticipating and keep on wanting.

• Powell’s speech and the dot plot

The dot plot wasn’t all too favorable, as most FED members saw 1, to 2 rate cuts in 2024. What needs to be said is that these projections were made before the latest CPI report, and although the FED members can readjust their projections on this new information, it’s rarely done, this was said by Jerome Powell during his press conference. It couldn’t de-rail markets, however. As for the speech, this is a place where very little new information is shared most of the time, journalists try to look for hints in the response and Powell tries to answer as neutral as he can. What traders look for are hints of tonality. As for most of the meeting, the tonality felt quite neutral, with some dovish comments in between them, like the fact that no FED members are looking at rate hikes. These are comments that markets feel really good about. All in all, the reaction of the market says it all, a more dovish Powell was hoped for, although it wasn’t a disaster.

• PayPal falling

PayPal is taking a step back after last week’s enormous inflow of bullish sentiment. This comes as there have been a few other developments that underscore the difficult competitive nature of the payments market. The Apple tap-to-pay update would be a challenge to Venmo, and Apple's partnership with Affirm will see the BNPL competitor integrated into the payment products. You can read the report by BofA here.

• Celsius Holdings

Earlier this week I came out with a story that I checked and found through Twitter to justify a negative 9.6% move. As surprising as it may be, this story was wrong. When I checked, I couldn’t find anything on the investors’ website from Celsius, nor on any of the websites I check for news, but apparently, there was. Now, don’t blame me too hard because they have a WordPress website and the webcast was hidden in this mess below. I find it somewhat charming as it shows the focus of the company, but they have a market cap of $15 billion, a bit more effort can be made for the investor website.
But what was said? Pepsi, the supply partner of Celsius will be reducing inventories by 20, to 30 million dollars. This comes as Pepsi initially bought a large supply to make sure they have enough inventories, and is now adjusting their inventory for the wanted amount of days at hand.
The article covering it can be found here, and the conference can be listened to here.
One of the things the conference started with is the slowdown of the energy drinks sector, not really something investors want to hear in a growth story like Celsius, this also makes more sense than a story about some twist on vitamin B12.

• Apple The Great, for a minute

Apple had reclaimed its throne as the king of the markets. After pushing almost 15% in 2 days, about 400, to 500 billion dollars in market cap, it overtook Microsoft as the most valuable company in the world. Unfortunately, in the final 45 minutes, the stock fell about 3.5% from $220, to $212, which means the throne was given back. I must admit, I feel like the throne belongs to Apple, even as it comes after the anticipation of a growth story I don’t believe all too much in, I just think Apple sounds better as the most valuable company.

• What am I looking at today?

There will be a PPI report, as well as the weekly jobless claims. These two data points will have to confirm the CPI story from yesterday in order for markets to make sustained upward moves. PPI Month-Over-Month is expected to come in at 0.1%, with the Year-Over-Year number expected at 2.5%. Core PPI is expected at 0.3% Month-Over-Month, and 2.4% Year-Over-Year.

The initial jobless claims, which have to come in hot for the rate cut story to continue, are expected at 225K. Coming in hot would mean a number higher than 225K, continuing jobless claims are expected at 1800K.

Then there is one more thing I will be looking for after the markets close, which is Adobe’s earnings. The stock is under a microscope as investors are afraid the moat is deteriorating for the company due to increased competition as a result of generative AI. I am not expecting generative AI to crush the moat all too much, but it may have a slight impact. What I will be looking at is the margins, comments on investments, and also how the Digital Experience side is doing as this might be somewhat lagging. This is based on the Salesforce earnings report.
Revenue is expected to come in at $5.291 billion, with EPS of $4.39

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The Morning Market Feed, June 12th

Stocks rallied into the close, as many stocks closed green that were still very red well into the morning trading session. Two stocks that stood out in my portfolio were PayPal, and Shopify. Other stocks that made notable moves were Tesla and Apple. I also owe you an apology, so let’s dive straight into it!

• Let’s start with PayPal

I saw the drop attributed to yesterday’s Apple event, but that was the day before yesterday. Yesterday Jamie Miller, the CFO, joined the RBC Financial Technology Conference. The conference started with notes on how the company has done with re-organizing. What stood out to me directly afterward was however enthusiastic Alex Chriss was about the future, the visionary he was, Jamie Miller was way more down to earth and dialed it back a bit, this was the reason the stock fell. The conference also felt way more informal and not as directed.
Miller was diving way more into the advantages the stock has seen, and the challenges in the comps later into the year. Miller also dove into the PayPal Fastlane checkout, how it works, and what the advantages are for PayPal, as well as for the customer. It was once again confirmed that the company was giving away some products to enterprise customers, and that they will not do so anymore. You can listen to the conference yourself here.

• Shopify

Shopify is moving really interesting, because I have owned the stock for about 2 weeks now, waiting to add a bit to it. I am up about 10% on the name already, because the stock has been up for 11 days straight. Reporting on it is of course asking for the streak to break, but what do I think is happening there? Very simple actually, FOMO. The stock has sold down after the most recent earnings, something that doesn’t happen very often, but now that it is down everybody who wanted to buy it, bought it, also, now that the stock has moved up all these days in a row, everybody who kinda wanted to own the stock sees it running away.

• Tesla news cycle continues

Tesla has seen so much negative news, that I simply don’t want to bring bad news on the company every single day. I’m not a Tesla shareholder, nor am I an Elon fanboy, but we have to admit that the media has a passion for being negative about Tesla, however justified it sometimes may be. Yesterday, JPMorgan analyst Ryan Brinkman, came out with a note to clients in which he noted that the Tesla Robo-Taxi launch is likely years away.
This comes on top of all of the negative reporting on Elon’s pay package voting. This is of course the hottest topic in the market and all large holders are asked for what they do. I believe, however excessive the amount, it was approved based on what was seen as unreachable goals. They were met and now Elon is entitled to the compensation. I can understand however, that people feel different about it at this point. The stock has been slumping, Elon has gone off on a political warpath, and reversing the compensation takes back shares, basically doing the same as a very large buy-back.

• So Why did Apple gain over 200 Billion in market cap?

Apple Intelligence of course, but indirectly. What happened is that due to the OpenAI partnership, Apple got a bunch of new price targets and profit targets. Analysts were all over the stock like a bunch of hungry hyenas, and what else could have been expected? It seems as if analysts aren’t the fastest learners. Apple will see an increase in replacements according to Morgan Stanley, but this sounds ridiculous to me. This sounds like the same as when Bing would for sure replace Google in search due to integrating OpenAI. You can guess what happened, nothing. I have seen no indications that the average consumer gives a single … about AI, if anything, I have seen more signs about the average consumer being held back on it because it is quite intimidating.
The rumor is also about iPhones getting bigger, now this is something I do see the consumer actually care about, I’d like a larger phone as well, it has its advantages, but any increase in sales will be simply attributed to AI.

• My apology

It’s Wednesday and normally this would mean a stock analysis. I have been so busy this week, that I just couldn’t get it done. It would not only be half done, it wouldn’t be thoughtful either. This means that I will make up for it next week with an analysis in which I will dig deeper into the company I’m looking into.

• What will be important today?

It will be a very big day in the market. We will not only have a CPI report, but also a rate decision and the press conference after. On top of this, we will also get a summary of economic projections, better said, a dot plot. The dot plot will provides us with the actual expectations from the FED members on how many rate cuts they expect. This will affect the hope for rate cuts as I have explained many times before.

CPI is expected to come in at 0.1% on a month-over-month basis, and 3.4% year-over-year.
Core CPI is expected at 0.3% month-over-month, and 3.4% year-over-year
Rates are expected to remain unchanged and during the FED speech of Powell afterward, Powell is expected to take a reasonably hawkish stand as economic data hasn’t supported rate cuts just yet.

That was it for today. Let’s see how markets react to the CPI reports, FED speech, and the dot plot.

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The Morning Market Feed, June 11th

We saw the announcement for new inclusions into the S&P500, with the reshuffle, 3 companies were added to the index, and 3 removed. AMD is having a rough day, whilst Celsius Holding is trying to one-up it. Now let’s dive straight into what happened yesterday!

• S&P500 inclusion

It may be a bit of a tough one for Palantir shareholders as I saw them once again rally the idea of inclusion in the S%P500, but just like the two quarters prior, it wasn’t included. Three other companies were, however, and those stocks made big jumps. These companies were Crowdstrike (+7.3%), KKR (+11.2%), and Go Daddy (+1.9%). The difference may come from the amount of buying that would need to be done into the companies, as Crowdstrike and KKR will get significantly higher weights within the index.
The companies that will be dropped from the index are Illumina, Comerica, and Robert Half.

• AMD Downgraded

Morgan Stanley downgraded AMD from “Overweight” to “Equalweight” while it maintained the $176 price target. The downgrade comes as Morgan Stanley says it likes the AMD story, but investor expectations for AI seem to be too high. The stock was down 4.5% on the news.
This is quite the discovery from Morgan Stanley. Because if we look at the latest earnings report, the Data Centre segment may be up 80% YoY, but overall revenue is up a whopping 2%. Margins, which are what makes the Nvidia story so incredible, are up 3bps YoY for AMD’s gross margin, now at 47% on a GAAP basis. Operating margin was an amazing 1%, or 21% on a non-GAAP basis. The difference here is SBC and a large amortization cost.

After that latest earnings, I was quite vocal about not liking what I was seeing at all because it made no sense, those earnings were simply terrible. AMD trades on hopes of getting business from Nvidia clients who don’t want the far superior product. But it’s good to see that it only took 1.5 months for Morgan Stanley to pick up on it after some other bad AI earnings reports.

Source

• Celsius is the actual liquid death apparently

Now this came from a short seller report as it appears from the good old Twitter, or X I should say. I understand the reliability of this source, but it was the only thing I could find. Normally I get my news through Tradingview, and Yahoo Finance, while sometimes looking for explanations on Seeking Alpha. None of them had anything to share on the name so down the well I had to go. Apparently, Cyonide would be a form of vitamin B12, and you’d never be able to get enough of the drink in your system for it to pose a threat. I have added the screenshots at the bottom about the possible reasons for the downward move and included my quick Google search of the B12 theory.

• AI now stands for Apple Intelligence

If you own an iPhone 15 (or newer when IOS 18 will be released) you will be able to integrate ChatGPT with Siri. The upgrade to IOS 18 will probably come with the new iPhone 16 which can be expected later this year, just like every year around September. The ChatGPT integration wasn’t the only innovation presented at the developer conference, but the others were mostly small integrations which are small improvements.
You can find all the innovations here

That was it for today, I hope you will have a good day, and that markets will turn around again just like they did yesterday, as futures are pointing downwards slightly as of writing this

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• The news regarding Celsius Holdings

Morning Market Feed, June 10th

I hope you enjoyed the weekend as much as I did, and are rejuvenated for a new week in the markets. Futures are still looking sleepy with now much going on, although we did see the 10Y-Yield jumping 3.4% last Friday. I also promised an overview of the Growing Quality Portfolio which I will go over today. Let’s jump straight into it!

- The Growing Quality Portfolio
I have previously called it the social media portfolio, but will refer to it as the Growing Quality Portfolio going forward. As it became a rather large article, I decided to link to it instead of pushing it through the newsletter. This means that you can read it here if interested. I will also try to communicate the goal of this portfolio better going forward, so let me state the philosophy, and goal here. I want to buy high growth stocks, which need to have their volatility and risk compensated by more mature, and stable growth stocks. This strategy will have large upside, and has the challenge of protecting downside. The goal of this portfolio is to show what can happen when funds are added continuously, and thoughtfully.

- The 10Y Yield increase
Last Friday saw the release of jobs data, which was expected to come in below expectations, just like all other jobs data point came in throughout the week. But this was the big official one, and was supposed to confirm the idea that the jobs market was slipping, which would result in the FED needing to cut interest rates. As said last week, institutions have falen in love with the idea of rate cuts, but when they happen, I’m not expecting too much of a favorable reaction to it, as it would mean a deteriorating economy. Anyway, last Friday, quite the opposite happened. Jobs data came in way hotter than expected and as a result, the 10Y-Yield which was falling quickly in the day prior, bounced back up by 3.4%, which then resulted in interest-rate-sensitive stocks to fall flat on their face. For me, this was Enphase, which fell by 7.2%, although the stock is still up 12% in the last 4 weeks.

- What will I be looking for in the coming week?
Adobe will be reporting earnings coming Thursday. This is something very important as the stock has been falling since February, and will provide an update on the AI threath. I will be listening to it carefully, look at the details, and of course, give my thoughts of it.

On Wednesday, we will also see a new CPI report with expectations being an inflation rate of 0.2% month-over-month, and 3.4% year-over-year. Core inflation is expected to coming in at 0.3% MoM, and 3.5% YoY. This is followed by the interest rate decision, which is not expected to change, but the following Press Conference will be important to judge the path going forward.

Friday will see the Michigan Consumer Sentiment Preliminary number coming in, which is expected at 73. I will explain this number better in Friday’s newsletter.

That was it for today, I hope you have a good day and markets will have another good week.

Morning Market Feed, June 7th

I have been extremely busy yesterday, busy writing articles, and got a few good ones to refer to, so get ready because it will be a good one, let’s dive straight into it!

- lululemon Earnings

As I already told you my first thoughts about the lululemon earnings, I won’t go into it much further here, however, I did write an article in which I went into all my thoughts about it. This is quite the article as I listened to the earnings call twice, to pick the best parts from it and just to be sure that I had it all, went through the transcript as well. The article first goes into the operating metrics, what other parts stood out and my full opinion on the earnings. You can check that article here

- The Top Is Here, Honestly, This Time For Real

I see more and more people saying that the top is being made for Nvidia, this time it will be a blow-off-top. Just like it was too overvalued at $350, impossible to grow further at $500, and overdone at $900. I quite like that order if I may say so myself. Anyway, you might have guessed it, but I’m skeptical of those opinions, especially when I know these accounts are reporting on it since $500, $750, and $900. I wrote an article on this as well because I find it funny, because it’s not like I own or plan to own Nvidia, but it’s an obvious scream to be right. Not to upset too many people, but Nvidia simply doesn’t fall in my circle of competence. All I know about the sector is that it used to be cyclical, but with all the investments in AI it seems to have created some new dynamics. All I know is, I had a lot of fun writing this article

- PayPal has seen its bottom

I’m not one to make predictions in the market, however, what I have heard from the latest conference of BofA securities where Alex Chriss, the CEO of PayPal was a guest speaker was really impressive and exactly what the street was waiting for in my opinion. There were lots of gems dropped in the interview, one of them was the note Alex Chriss has received from a CEO of a mid-size airline. You can read the full article here, as well as what that exact gem was…

- Another “good” jobless report

The weekly jobless data that’s released on Thursday came out as scheduled yesterday. The expectation was for 220K initial jobless claims, and 1790k continuing jobless claims. The actual numbers came in at 229K initial jobless claims, and 1792K continuing jobless claims. This is another jobless report that is leaning towards the side of rate cuts.

- So what to look for today?

Today will brig us the average hourly earnings, non-farm payrolls, and the unemployment rate. These will move the market, so let’s look at what is expected, and how these numbers compare to last month.

Average hourly earnings:

• Expected to come in +0.3% month over month, compared to 0.2% last month. An acceleration in hourly earings

• Expected to come in at 3.9% year over year, compared to 3.9% last quarter

• Average weekly hours are expected to come in at 34.3 hours, same as last month. This is important because it can be an underlying explanation to earings directions

Non farm payrolls:

• Expected the addition of 185K jobs, compared to 175K last month. This number often misses expectations however as last month the expectation was 243K, and the month before the April expectation was 200K, with the actual number coming in at 303K. Remember, this number includes illegal immigrants, a fact that has been slightly controversial about the report.

Unemployment rate

• Expected to come in at 3.9%, compared to 3.9% last month. So no change on a percentage basis.

- For next Monday

Monday, I will give a short write-up about my holdings, why I own them, and the philosophy behind my portfolio. If you have any questions for me that you want answered about this topic, please e-mail me at info@growingquality.net and if I get a few of the same questions, I will answer them as well in the newsletter.

Let’s see if we can finish the week on a strong note and make an absolute push towards new highs on the S&P500, and Nasdaq

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What to expect from it?

- One growth stock analysis per week
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You can unsubscribe from the newsletter at any moment, this is of course without any questions asked.

Morning Market Feed, June 6th

Markets made a big upward push as jobs data came out which we will get into, both the good and bad of it. Furthermore, I got the video for the Duolingo analysis out, so I will include a link to that at the bottom of this newsletter. We will also look at the lululemon earnings as this is the largest stock in the social media portfolio. Talking about the social media portfolio, PayPal also had another executive introduced, so let’s dive straight into it!

- ADP Jobs Report

The ADP Jobs Report was released yesterday and this wasn’t particularly great, but good for the markets. So what does the ADP Employment Change measure and why did the markets move up on it? The ADP report measures the change in non-farm payrolls for private companies. So why is it important? The ADP report is released on the Wednesday before the Non-Farm Payroll report of the Bureau of Labour Statistics on Friday. It is often seen as a somewhat leading indicator of the big number. Yesterday the ADP number came in at 152K, as 175K was expected. This means slower job growth than expected.

So why is this bad? Slowing job growth is a sign of a slowing economy, this is fine when it’s just a random report that comes in slightly lower, but in this case, we are talking about a slowdown that is widely expected, and will be used as proof that we are heading towards a recession. I’m not saying that I see it that way, but it will be used in that argument.

So what’s good about that? Funds want rate cuts. Or I think it’s better worded as “funds and institutions want the hope for rate cuts”, because lower interest rates make for a lower risk free rate, thus would support higher valuations for stocks, as well as more money moving from the sidelines into the market. It would also mean that the cost of capital would move down which is also good for stocks, smaller caps mostly.

- lululemon earings

Yesterday I released an article under the “Hot Takes”, which is where I put my blogs about things I want to write about between the Morning Market Feeds, or when I want to share an extended opinion. The article went over what I wanted to see from the earnings of lululemon. You can read that here. But at a first look, the earnings look decent. So let’s look at how they compared to the expectations.

EPS: $2.54 VS $2.40 expected
Revenue: $2.208B VS $2.199B expected

This means we see revenue growth of about 10% year-over-year, and EPS growth of 11%. Furthermore, the board approved a $1 billion stock buy-back program, even as we saw negative free cash flow in the latest quarter. This amount is only $3 million, which is a substantial improvement from the same quarter 1, and 2 years ago.

In terms of guidance, the company expects to see EPS in the range of $2.92, to $2.97 on revenues of $2.4, to $2.42 billion, this compares to expectations of $3.03 of EPS on revenues of $2.45 billion. This is a miss that other stocks have been punished quite hard for.
For the full year, EPS guidance came in at the range of $14.27 to $14.47 on revenues of $10.7 billion, to $10.8 billion, this compares to expectations of $14.13 of EPS, on revenues of $11.76 billion. This means that the full-year guidance came in slightly ahead on an EPS basis, but all other measures missed slightly.

Later today I will listen to the earnings call and read the transcript in order to pick up on hints and be able to give better feedback on it, and see how the company reported on the issues I’d like to have answered, you’ll read about this tomorrow. As of now, before the pre-market opens, the stock is up about 10%, but missing guidance numbers haven’t always gone down as favorably with institutional investors so I’m not celebrating a good quarter just yet.

- PayPal announces another additional executive

PayPal announced a new Chief Accounting Officer, or better said, the addition of a Chief Accounting Officer. Chris Natali will join from Alteryx, where he currently holds the position of CAO, and interim CFO. Before Alteryx, Natali held roles at Hewlett Packard, Gymboree, Hyatt Hotels, and Hewitt Associates. Natali will start his new role at PayPal on June 10th

- A side note

I have referred to my social media portfolio from time to time lately, even though this is a very small account, coming Monday, I will explain the philosophy behind the account, and what stocks I’m holding, and at what size, with a slight explanation why. I will do so to be fully transparent and so you know what I am talking about when I refer to the social media portfolio.

- Any economic data?

We will see the weekly update on initial jobless claims, which is expected to come in at 220K. This number will probably get the same reaction as the ADP number mentioned earlier. We will also see import, and export numbers.

That was it for today, let’s see if the markets can keep their momentum going as the S&P500 and Nasdaq had new ATH closings yesterday.

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What to expect from it?

- One growth stock analysis per week
- Monday through Friday you’ll receive the Morning Market Feed in which I go over the news of yesterday with a skeptical/cynical twist. Finance should be fun, personal finance is serious enough by itself.

You can unsubscribe from the newsletter at any moment, this is of course without any questions asked.

Morning Market Feed, June 4th

We saw the return of GameStop as monday and Celsius fell around 5% while interest rates took another leg down. We also saw some economic data coming in which was a bit counter to one another and I will explain the consequences of it, so let’s dive straight into it!

- Keith Gill doubles down

 You may have seen the news already, but Keith Gill, the person behind X account Roaring Kitty and DeepFuckingValue on Reddit, seems to have doubled down, to say the least. And even as I don’t want to spend too much energy on the meme stocks, this position is quite noteworthy. This is for 2 reasons, but first, let’s see the position because it consists of 5 million shares at an average price of $21.274. But besides this, the shared screenshot shows 120.000 call options at $20 which will expire on June 21st. This means a total position of $181.4 million with the options making up $65.7 million of that.

What I want to highlight here is that it is not verified that this is in fact his holding, as it is vastly larger than the capital he would have under any of his net worth estimates, but then again, the internet can’t really see into his portfolio. The second thing is the jump in the value of this trade. The options part of the trade is verified to be real due to the immense volume of the options chain, it’s simply unclear if it truly belongs to Gill. But these options multiply in value on price moves based on the premiums.

- ELF was upgraded

I have made my opinion known about the latest earnings release of ELF Beauty. But in case you missed it, I found them great, except for the guidance, which was simply bad. I do have to mention with it that ELF guides low, to beat and raise, and this is what they have always done. It does however make it difficult in an environment where all competitors seem to struggle. But going back to it, ELF Beauty didn’t get an official upgrade, what did happen is that ELF Beauty was added to a “Best-of-Breed Bison Initiative” by D.A. Davidson, as the firm recognizes a sustainable competitive moat.
I do think ELF has a unique way of marketing which helps them start with massive demand in new markets, but it is something that I am very cautious about, even as the stock is on my watchlist because we can not ignore the massive growth numbers the company posts, especially the introductions into new markets are impressive. What should be questioned is if a make-up, or cosmetics brand can really be seen as having a moat, because switching brands is so easy. The source for the article can be found here.

- Economic Data

There were two types of manufacturing PMIs, first, the S&P Global Manufacturing PMI was released which came in at 51.3 as 50.9 was expected. The number over 50 suggests growth, and under 50 a decrease in manufacturing. So this means that the manufacturing grew slightly according to this survey. But we also had the ISM manufacturing PMI. The approach is slightly different and the ISM PMI is seen as more important. With that said, the number was expected at 49.6, with the same going at the above or below 50. Economists were therefor already expecting a minor slowdown, but the the number came in at 48.7.
The issue here is that we have opposite numbers, one giving a slight increase, and the other a slight decrease. The slight decrease may increase the anticipation for rate cuts, while the slightly stronger number may anticipate rates to stay higher for longer.

For today, we are expecting JOLTs Job Openings, and be ready for this number to move the market. Investors are on their toes about the economy and looking for catalysts as we are possibly missing one at the moment. This causes markets to look like they want to roll over. The forecasted number for the Job Openings is 8.34 million, this would be the lowest number since February ‘21, but as mentioned previously JOLTs Job Openings have never been above 8 million prior to the covid crash, and following recovery. But with that said, let’s see what the number will do, and see if markets can make a renewed push higher.

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Morning Market Feed, June 3rd

May has come to an end as institutions had one final show for us into the close Friday, which I didn’t mind as it lifted my portfolio from red, to green. But as we look ahead we have one fairly important earnings report coming for me, we also have some important economic data points coming this week for which we will see what is expected

- lulu earnings coming up…

lululemon is expected to report earnings this coming Wednesday, and they are of slight importance to me as lulu became the largest holding from my social media portfolio. I have also covered this stock twice in a YouTube video lately, first in a stock analysis which you can see through the button below.

More recently, I made a video going over the issues the company is facing and why it has sold down 35% since the last earnings report. In the most recent days, the stock has seen some life again as investors may anticipate an earnings report that is not as bad as feared. Analysts are projecting $2.40 of EPS, on $2.2 billion of revenues, this compares to $2.28 of EPS on $2.0 billion of revenue in Q1’23. The video going over the problems the company is currently facing can be seen by clicking the button below.

- Economic Data Points

In the coming week, we are expecting some important economic data points, which may cause troubles or relieve in the market. The first of them is the JOLTs Job Openings. This number will be released Tuesday, and is expected to come in at 8.35 million. Having this number come in higher will make the economy look strong and delay expected rate cuts, having this number come in low may signal economic troubles, but faster rate cuts.

On Friday we will see the Average Hourly Earnings and nonfarm payrolls. This number has also been a source of head scratches as hourly earnings have been coming in hot in recent reports. The forecast for this number is 0.3% for the MoM figure, and 3.9% for the YoY number. The increased wages bring fears of inflation that keep ticking up, and creating a wage-price spiral, where earnings keep increasing to cover the additional costs of inflation, to in turn, cause more of it.
We will also see the unemployment rate which is expected at 3.9%.

So let’s get started with the week and see if it can be a week where new highs are being made.

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What to expect from it?

- One growth stock analysis per week
- Monday through Friday you’ll receive the Morning Market Feed in which I go over the news of yesterday with a skeptical/cynical twist. Finance should be fun, personal finance is serious enough by itself.

You can unsubscribe from the newsletter at any moment, this is of course without any questions asked.

Morning Market Feed, May 31st

The name of the day was software. The drop in Salesforce dragged all software stocks down with it, for me personally, monday.com and Adobe weren’t able to evade that chaos. This was slightly offset however by positive news coming from PayPal, always the spin when you are about to drop a negative piece of something, anyway, let’s just dive straight into the news of yesterday!

- Sales with no force

As I already mentioned yesterday, Salesforce missed their revenue numbers for the first time in 18 years and I would listen to the earnings call to see if there would be any knowledge to gain, and I’d have to say, not really. There were however three things that stood out to me. 1, They called out OpenAI for stealing data and that is how they build their AI algorithms, or as they call them models. This is of course a short snippet as Marc Benioff was praising the newest GPT version for how good it is, but initially built on stolen data. 2, The call got really cheesy when some pushback was given over the numbers. Benioff went into how great the margins and the free cash flow of the business are. 3, But this really is a personal opinion and feeling I got from the call so listen to the earnings call instead of just taking this opinion as a fact, but the praising of Salesforce sounded like somebody who is in a hole and hasn’t figured out what to do against it yet, but does everything to distract from giving that impression. It’s on the bad side of the earnings calls I have listened to this earnings season and the market seems to agree as the stock has sold off even more to be down 20%.

- PayPal with some life in it?

Just when I was about to dive into the negative aspects of the business, the stock got upgraded to “Buy” from “Hold” by Mizuho with a price target of $90, which increased from $68. The report cited developments in the market and a valuation position compared to rivals. You can read more about it in this article

- Costco did what?

Costco is seen as one of the holy stocks in the market. A favorite of Charlie Munger as one of the best businesses out there and always trading enormously rich due to the certainty of the subscription business which allows the company to give really competitive prices amongst other very good policies. But the impossible happened, the company missed revenue expectations, barely. The company came in with $57.4 billion, compared to expectations of $58 billion. As a result, the stock sold down 1% following the release, but before the earnings call.

As we have reached the final trading day of the week already, I hope that the markets hold up better than the previous two days in order to go into the weekend on a good note.

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What to expect from it?

- One growth stock analysis per week
- Monday through Friday you’ll receive the Morning Market Feed in which I go over the news of yesterday with a skeptical/cynical twist. Finance should be fun, personal finance is serious enough by itself.

You can unsubscribe from the newsletter at any moment, this is of course without any questions asked.

Morning Market Feed, May 30th

It wasn’t a particularly good day in the markets as most of the companies I follow were red. There were however some odd ones out that had news. Salesforce reported earnings which we will go over as well, so let’s dive straight into it!

- PYUSD is now on the Solana blockchain

Now before commenting on this, I must admit, I’m not quite the expert when it comes to crypto or the blockchain technologies. So I will just repeat what this article says on that front, it’s quick and cheap. So why do I comment on it? PYUSD is PayPal’s stablecoin. As PayPal is the biggest holding in my personal portfolio and one of the (relatively) larger holdings in my social media portfolio, the developments of the company do interest me, however small it is. As PayPal is not doing all too great since the latest earnings call, I will release a video this coming Friday on my YouTube channel in which I explain the struggles I see the company, and stock is having.

- lululemon is going to beat expectations?

Well, Morgan Stanley says so. They did adjust their price target from $490, to $404 but reiterated their “overweight” rating. So what was it they said in more detail? Morgan Stanley expects lululemon to post a high single-digit sales growth in the US, this would be an upside surprise and potentially what holds the key to a rerating higher. The firm also believes that a slight increase in the EPS guidance for the year might be in the cards. To me, this would be surprising. I’m not looking at the data sets the Morgan Stanley analysts are looking at, but we see more and more companies cutting prices. Walgreens and Target doing price cuts, McDonald’s doing “value” deals are examples. This means that I would be surprised if lululemon raises their EPS guide, but it would certainly be welcomed.

- No more sales force

As we can see from the after-hours drop, Salesforce is the latest stock that is basically being dropped as if it has lost all steering and is a company adrift. And we can’t argue how true this is as the company missed its revenue expectations by 0.2% and beat EPS expectations by 2.8%. This made the stock drop 16%. Okay, now I’m being really sarcastic, and I’m also cherry-picking from their earnings and not telling the entire story. So what is the entire story? It is the first revenue miss since 2006, so that’s 18 years ago, in most countries, children born in 2006 would now be allowed to drive, as well as buy alcohol. It’s pretty surprising when such a streak ends. Furthermore, they missed on guidance expectations for both revenue and EPS, as these came in at $2.34, to $2.36 of EPS on revenues of $9.20, to $9.25 billion. This compared to expectations of $2.40 of EPS on revenues of $9.35 billion.
The company also said it saw “enlonged deal cycles, and high levels of budget scrutiny”. So that means potential customers are not willing to pay up for their products. You can read a full market watch article about the earnings here, or check the earnings report yourself here. I do still need to listen to the entire earning call, which I will do today, so if I hear any other notable things, I will comment on it tomorrow.

- More Musk Problems

Tesla continues to put everything on the pay package for Musk. They are trying to sneak up to the edge of what is legal, and I wouldn’t be surprised if they step over that limit. We know Tesla is already running advertisements to influence the stockholders’ vote. As Musk has now also promised to give a factory tour to 15 people who vote in favor of his pay package, you can read more about that here. But the more noise the company makes for investors to vote in favor of the issue, the more large investors seem to say they will vote against the matter. The latest being Calpers, the largest state public pension fund in the US, and a top 30 holder of Tesla shares. A better look into some institutions that will vote against the matter here.

Let’s see what today brings as we know that Costco and Dell are expected after the markets closes, and I will tell you about it tomorrow!

Morning Market Feed, May 29th

Celsius takes a not-so-refreshing plunge as the Duolingo bird flies away with a 8.8% gain. We also saw something happening that I wouldn’t have bet on happening but investors bet on some impact. Let’s see what yesterday brought and dive straight into it!

- Let’s start the day on a positive note

Duolingo got an analyst upgrade and was up 10% on the day as the analyst said that Duolingo would survive the AI threat and gave it a price target of $260 which implied a 46% upside from where the stock was trading. In my opinion, that makes sense because of how dominant the company actually is. I also think it’s a stupid move as the stock is on my watchlist and I was hoping for it to go lower, so I may be slightly biased with my opinion. I’m currently working on the analysis of this company so that will be released in the coming weeks as well.

- I’m getting delulu

Shares of lululemon dropped another 2.5% yesterday as both Stifel, and Goldman Sachs adjusted their price targets for the company while keeping the “Buy” rating. Stifel adjusted the price target from $539, to $410, while Goldman drops the price target from $521, to $463. Additionally, shipping rates should be on the rise again with prices for shipping containers being up as much as 88% in recent weeks in China according to this article. Not a really good development for a business that has a big part of its production in Asia. My expectation is for this stock to keep dropping into the earnings as the uncertainties start mounting which will need to be cleared by management.

- I wasn’t betting on it

Draftkings was down as much as 13.4% at some point yesterday as Illinois Senate approved their budget for 2025 which includes a sports betting tax increase. According to an article by IGB, the state is expected to almost triple the tax rate on sports betting. It will result in the highest revenue players in the space having to pay up to 40% in taxes. That will affect the net income numbers of the business and this was reflected in the stock as the shareprice ended the day down 10.3%.

- So what about this non-refreshing plunge?

Well, if you thought Draftkings was having a bad day, Celsius Holdings was down as much as 18.8% at some point today, before somewhat recovering towards ending the day down 12.85%. So what happened? Morgan Stanley maintained their equal weight rating with a $75 price target as they cited data from Nielsen which showed that sequential sales growth was supposed to have dropped to 39%, with market share dropping to 10.5%, from 10.8% three weeks ago. The Nielsen data is often used in order to see energy drinks market is doing. So was it all bad? Well… Stifel came out with an increased price target after meetings with the company’s management but this seemed to not be important yesterday.

- So what is there to look for today?

There are no real macro environment catalysts, but there will be earnings from Salesforce after the market closes. Besides Salesforce, I may look into the Dick’s Sporting Goods earnings to see how they talk about the retail market for sporting goods. It may hide some hints for lululemon even as they don’t really compete or have true cross-over.

That was it for today, I will see you again tomorrow when I will include the numbers from those earnings in the report

Morning Market Feed, May 28th

The markets will re-open after a long weekend so it’s time to start looking at the week ahead of us. But first let’s look at what happened last week because due to the long weekend, it feels like ages ago. Let’s dive straight into it!

- INTU The Deep

During Friday’s trading session, Intuit shares closed the day down 8.35%. This happened after the company released earnings in which they reported lower-than-expected guidance. Not only was the EPS guide below expectations, but also the projected users of TurboTax were guided to be down from a year ago, which is never a very well-received thing by Wall Street. So what was the exact problem? As this article states by Barron’s, analysts expected guidance of $1.92, but Intuit guided for “only” $1.80 to $1.85 of EPS. So now that we know that the company will go out of business by WallStreet standards, let’s quickly glance over the actual numbers really quick, because maybe this one small-ish number disappoints in one way, the revenues it produced grew 17% YoY, and the $1.4 billion for FY’24 Turbo Tax is expected to bring in, is only about 8% of the total company. Quite the overreaction. Even more so as they upped guidance across the board.

- The Most Troubled Company In The Markets, According To Analysts

Last week I made the joke about needing to put everything in from an incredibly bearish take on this company, as this is how everybody writes about it. Even as the company is facing many struggles, for a large part due to the macro environment, it is the only stance the media seems to be able to take about the company. You can probably guess the stock already, but it’s Tesla. And just to be clear, I’m not defending the stock because I own it (I don’t), or because I’m an Elon fan boy (I’m not). But there was more bad news about the company over the weekend. Tesla slashed Model Y output by 20% from the Shanghai factory. Not really ideal as Musks said they will beat last year's 1.8 million deliveries, but this seems more, and more unlikely as the FED is also more unlikely to lower interest rates this year with every passing CPI report so far this year.
Musk also seems to be more distracted than ever as his newest start-up xAI has done a new funding round, at a valuation of $24 billion. And no, it doesn’t produce any revenues yet. We are at that level of sustainability again… But as Elon Musk says he doesn’t feel comfortable pushing AI at Tesla if he doesn’t have 25% of voting rights, he already set up another company to chase AI.

Model Y Output Cut
xAI Funding Round

- So What Will We See This Week?

Earnings. Not an incredible amount of them, but a few big ones. We will see Costco, Salesforce, and Dell. So on what day are they expected, and what do analysts want to see from these companies?

Costco - Costco will report on Thursday. Analysts expect EPS of $3.71 on revenues of $58.13 billion. As the retailer is now trading at a 53PE, and 46F/PE, the expectations are extremely high. These levels are extremely overvalued in my opinion, as this is quite a bit higher than Nvidia for example. Costco is seen as way more predictable due to the membership. Those memberships will need to keep growing at about 7% YoY, at a retention rate in the high 92%.

Salesforce - After last week’s earnings report from Workday, investors will be looking at how Salesforce is doing this quarter. Analysts will be looking for at least $2.37 of EPS, on $9.151 billion of revenues. Shares in the company are down about 15% from the highs after the company was rumored to acquire Informatica which wasn’t very well received by investors, but then didn’t go through. The buy-out was poorly received as the company was supposed to be more capital-efficient with more organic growth, so investors probably want comments on that situation. Eyes will also be on the performance obligations.

Dell - After receiving a shout-out from Nvidia, Dell is basically an AI company. They are not, but since Nvidia said their name, they are. Shares are also up 115% YTD because of it. Is this supported by revenue growth or earnings growth? No, not really, but that doesn’t seem to matter. Analysts are looking for $1.27 of EPS, on $21.71 billion of revenues. Matching this EPS number would mean growth of….. -3%. I do need to say, in order to say fair, that in the past 8 quarters I have in front of me, Dell has smashed EPS expectations on all of them. Revenues seem to be more susceptible to misses of expectations, as they did so twice in the past 8 quarters with the other 6 having slight beats.

- What About The FED This Week?

There are no real big releases this week except for Thursday and Friday. On Thursday we will see the PCE numbers, the FED’s preferred inflation gauge. We will also see Q2 GDP Growth estimates and Q2 corporate profit estimates. On Friday we will see the personal income and personal spending numbers MoM.

Now let’s see what the markets will bring today and I will talk to you again tomorrow!

Morning Market Feed, May 24th

It’s another volatile day in the markets as Snowflake drops from +10% to -5.3% and ELF continues its recovery from -10% towards +20%. About the earnings from ELF I want to give a second remark as I had quite bearish comments on them yesterday. I still do, but I think I know what happened. Furthermore there was other news I didn’t get to touch on like the massive run solar all of a sudden went on, they gave back some of those profits but the reasoning for the move is sound. Now let’s just dive straight into it and see what the last day of the trading week brings!

- Let’s begin with the Beauty

Share in ELF initially dropped 10% on the earnings release, after which the stock recovered during the earnings call. My comments on the earnings yesterday were quite bearish, and even though the market tells me I’m wrong, I will stand my ground and not give in to the well make-up positive twitst I think happened.
So what is that twist I’m talking about? During the earnings call, some analyst asked about the guidance to which Mandy Fields, the CFO of ELF Beauty responded that it has always been their strategy to guide conservative and then adjust that guidance on a quarterly basis, and that what they are seeing is very positive. I have added the part of the earnings call in the transacript below where this was said.

Part of ELF Beauty earnings call transcript

- The Solar Run

Solar had a huge day on Wednesday and this was quite easily explained after I dug around a bit to find the source. It therefore took me an extra day to report on it because when one of my stocks is up 8.7%, I will try and explain why this happened. But it wasn’t Enphase that had the news, it was First Solar that brought us the extremely bullish move. What happened was that a UBS note highlighted First Solar as a big AI winner. I thought the writer used a little too much of the good stuff myself as well, but they explained that an AI reply on Google would use about 10x as much electricity as a conventional search query. When you combine this with the recently imposed tariffs it makes for quite the bullish news. And, because that wasn’t good enough yet, it also with a clear break over $220 a technical breakout that has the stock now pushing $250, a level it has never seen after 2008.
Here is a link to the article from Barron’s

- The Polestar needs a Polestar

A few days ago I already explained how Polestar delayed their annual report after getting a warning from the Nasdaq that they did not comply with regulations and would be removed if they didn’t file their annual report within 60 days. Now Polestar hit a new low, they also delayed their Q1 earnings report in order to finish the annual report first. That sounds like a great cycle to be in.

Polestar Quarterly Filing Delay

This was however moreso an intro towards the stock I actually wanted to talk about. One that I have covered more in recent weeks and one for which I will first have to put my “everything is terrible” hat on. Maybe you can already guess what company I’m talking about.

- The Second One In Need

The company I’m talking about is Tesla. And, the news I’m talking about is that in their sustainability report, they no longer state the goal of having 20 million deliveries in 2030. This goal was set in 2020, when everybody seemed to want a Tesla and the goal made sense from that perspective I think. The now silenced goal of long term 50% annual growth goal which is now far out of reach is also named as an example of recent execution. I think everybody knows Tesla won’t deliver 10 million customer cars by 2030, and some magic is needed for their robo-taxi which is set to be revealed on August 8th.

Source

- So What Will We Be Looking For?

Today will bring 3 big economic catalysts for the markets. The first is durable goods order, a MoM reading of -0.8% is what economist are forecasting. After that, we will move to the Michigan Consumer Sentiment survey, where we expect to see a 67.5 number. That’s a bad number and missing to the down side will go down a little to well in the current market. Finally, we will be looking at inflation expectations, that ate expected 3.5%. The are no earnings that spark my interest today.

With that being said, let’s hope for good economic numbers so we can go into the long weekend with a calm mind.

Morning Market Feed, May 23rd

It was a very important day for the markets as we saw the FED minutes, a publication in which we get a look into the minds of the FED officials and see how they talk about the issues at hand. For the last period in time, that would be inflation of course. Besides the FED minutes, we also saw Nvidia report earnings after the market close and that was a big, and extremely important one. Besides the Nvidia earnings, Target, and ELF Beauty also reported earnings, so instead of making this an extremely long letter, I will link the articles in which I dive into the numbers and just give the highlights here. Let’s dive straight into it!

- Let’s begin with Nvidia

We can’t talk about the earnings without first talking about what was expected from Nvidia going into the earnings release. By saying that, analysts expected revenues to come in at $24.59 billion, creating EPS of $5.58. Analysts expected guidance to come in at $26.84 billion.
Nvidia reported $26.04 billion of revenues, which resulted in $6.12 in EPS. Doing some calculations means that they did bring slightly less to the bottom line than expected on a percentage basis, but absolute numbers beat expectations by a very large margin. The Q2 guidance came in at a revenue of $28 billion, plus or minus 2%. Again, well above the consensus estimate. For my full thoughts on the earnings report, you can click the button below.

- So what about Target?

Target reported EPS of $2.03, missing the expectations but also coming in slightly lower than EPS from the year-ago quarter. This came from revenues of $24.53 billion, a slight beat of expectations, as well as a slight increase from last year, however, this mostly came from, new store openings as comparable sales were down 3.7% Year-Over-Year. The average ticket per customer was also slightly down. My full thoughts about the release can be seen by clicking the button below.

- ELF Beauty with the revival

ELF initially dropped 10% on the earnings release, but recovered to being positive 2% as adjusted EPS came in at $0.53, growth of 26% year-over-year, while revenues came in at $321,14 million, growth of 71% year-over-year. GAAP EPS was down when compared to the year-ago quarter as ELF took an impairment expense on equity investments of $1.155 thousand and an interest expense of $4.002 thousand. Diluted GAAP EPS was $0.25 compared to $0.29 last year.
As these were the Q4 numbers, we need to take a look at the full-year numbers as well. These came in at 1.023 Billion, an increase of 71% from the prior year. EPS for FY23 came in at $3.18, compared to $1.66 in ‘22, an increase of 91.5%. Again, a more detailed look can be seen by clicking the button below.

- How about the FED minutes?

Well, let me allow you to take a guess at the message that we got from it… Higher for longer, really surprising. It did turn out that the FED was a bit more nervous about recent CPI readings than initially expected, but all this was quickly laid aside after a small drop in the indices because of the Nvidia earnings release which was seen as more important as the news wasn’t really shocking.

Source

If you liked this article, please make sure to subscribe to my newsletter. You can do so by clicking on the button below!
What to expect from it?

- One growth stock analysis per week
- Monday through Friday you’ll receive the Morning Market Feed in which I go over the news of yesterday with a skeptical/cynical twist. Finance should be fun, personal finance is serious enough by itself.

You can unsubscribe from the newsletter at any moment, this is of course without any questions asked.

Morning Market Feed, May 21st

Weight loss drugs are all the rage and we have another player entering the arena, whilst entering the arena, the stock price is shooting up about 30% on the day. Furthermore, we see Palo Alto Networks report earnings which reacted with a -9% reading after the release. We also see more entertainment from EV land with news coming from Polestar and Tesla, as we start to look at Nvidia earnings. All sources will be listed at the bottom of the article, let’s dive straight into it!

S&P500 +0.12% | Dow Jones -0.46% | Nasdaq +0.70% | Russell2000 +0.22% | 10-year 4.49%

EV Land Keeps The Newswheel Spinning
As per the latest news, Tesla is set to fire even more employees as morale starts to run low at the company. By now I start to ask what is to all these lay-offs. It should have been 10% of staff, but we have seen at least 3 news articles going over even more lay-offs like Musk firing almost the entire supercharger team. The article I’m referring to today goes over how last week, Musk canceled another 693 jobs at Nevada facilities as now China is looking to get some more names scratched from payroll.

Other EV news is regarding Polestar. This is not a stock that typically falls within the boundaries of stocks I’m looking for, however, it is a stock I have owned in the past and have done relatively great by cutting a small loss, about -15% at the time, compared to where it trades now. The company that entered the markets as a SPAC merger in 2021 during the EV hype is now facing Nasdaq delisting as investors are still waiting for the annual report. The company has said to be working on it as they have 60 days left to do this. In the filing the company released in order to notify investors of not meeting the required deadline, the company also said it needed to review historical errors it had found. Shares are down about 11.5% following the de-listing warning.

He’s Him!, Or Her!
Hims & Hers announced that it now unlocked excess to injectable GLP-1 medication. The compound originally found in diabetes drugs that took the weight loss world by storm has caused Ozempic and Wegovy to be short on supply, so Hims & Hers now offers an affordable solution starting at just $199 per month. Depending on what you buy when on a diet, this could even be more affordable. Shares of the company are up about 30% on the news that the company adds this compound to their offering of weight loss solutions.

Palo Alto Networks
Palo Alto Networks is down about 9% after releasing their earnings, even though they beat analyst expectations. The number came in as followed:
EPS $1.32 vs $1.25
Revenues of 1.985 billion dollars vs 1.968 billion dollars expected
these numbers look good so the problem must then lie in the guide. And this is somewhat true as guidance came in right in line with analyst expectations. So why sell off 9%? The company switched strategies last quarter in which they want to sell to customers and this new strategy is so far failing to impress.

FED Speakers
Yesterday saw an entire shopping list of FED speakers. Not that they said anything original, but plenty was said. The main message? “Interest rates will stay higher for longer and the slowdown in the disinflation is something to watch”. So that is nothing new or spectacular. For today there are once again 5 FED officials planned to speak. Take a guess what I expect them to say?

Source Tesla Article
Source Polestar Article
Source Polestar SEC Filing
Hims&Hers Source
Palo Alto Networks Earnings Release
Palo Alto Networks Article

Morning Market Feed May 20th

It’s Monday morning and that means that we are getting ready for a new week of action in the markets. The number of catalysts is coming down as earnings season is also cooling. There are however about 5 earnings releases I will be looking for, as well as 1 big macro environment catalyst. Let’s dive straight into it!

As we are just getting started with the week, let’s get into it at a calmer pace. The earnings releases I will be watching just because they sold of heavily after the last earnings report are Palo Alto Networks (Cybersecurity), and Snowflake. I know that Palo Alto is often seen as a very strong stock with certain retail investors, it’s therefore interesting to see what the reaction will be to the report. Snowflake had the stock dropping 37% at the deepest point after the sell-off which resulted from bad earnings after the CEO dipped because he had cashed in enough from the company.

I will also be looking at ELF Beauty and Intuit as these have been very strong recently. ELF even being one of the fastest-growing companies in the markets over the past 5-year period. Intuit is one of the big tech companies, most known for QuickBooks, TurboTax, and Mailchimp.

Finally, we get to the big one. The earnings release the entire market is leaning against, Nvidia. Nvidia has become less dominant in the markets, as during the last 1 or 2 quarters the entire market were hanging on by a thread, and only Nvidia being able to recover it. I do not believe this quarter is a dependent on the earnings as then.

Finally, we will be looking at the FED Minutes on Thursday. This is a document in which we can see the thoughts of FED members and how they view the economic outlook.

It was a short one today but tomorrow I will be back with more news, if you want to be the first to receive the morning market feed, as well as the stock analyses, make sure to subscribe to my newsletter by click the button below!

Morning Market Feed, May 17th

It was “the day after” the somewhat upbeat CPI report and we got economic data to see if we could continue the run in the indices started. We also have a rumor that lululemon is buying its Mexican franchise stores and Tesla is desperate for shareholder votes. Let’s dive straight into it.

Economic data of the day

Let’s start of with the data coming from the market. We saw jobless claims coming in slightly above the expactiations at 222K vs 220K expected. A very slight decrease from last week. Continuing jobless claims also came in slightly above expectations at 1.794 million vs 1.780 expected. This was the lowest in a few weeks.

We did see the indices initially ticking up yesterday but going into the afternoon session, they had to give them up.

lululemon is buying their Mexican franchise stores, or are they?

lululemon is said to acquire their Mexican franchisee. This has not been officially confirmed by the company but an article by MT Newswire says it believes they got the information from a reliable source. So why would lululemon do this?

The Mexican franchisee operates 15 stores and as lululemon is seeing strong momentum in international markets, it seeks ways to offset lacking momentum in their US store base. Numbers were not specified, you can find the source here but the stock is down on the rumor by about 2.5%.

Tesla desperately seeking support

In an attempt to reinstate the 55 billion dollar paypackage that was voided by a judge as it wasn’t given to Musk by an independent board of directors, Tesla now want to have shareholders vote for it still pay musk for the already earned share packages. The company even went as far as hiring a legal firm and a strategic advisor, who set up a separate website where the director of the board explained the importance of the pay package in a video. 

So what now?

Tesla is trying to get the retail investor community to vote in favor of the package, which will be difficult in light of the recent stock declines. The largest individual investor, who owns about 0.8% of the company, has already said to vote against the pay package.

So what is the stance of Tesla’s board in this matter? They think it is crucial for investors to vote in favor of the pay package. Even if it’s an advisory vote, I think investors wouldn’t be so charmed to see the board push it without consent.

Elon Musk has also said that he wouldn’t push for AI within Tesla if he doesn’t get 25% of voting shares. Note that this is different from the 25% equity share of the company that is said in the article I have as a source. But maybe Musk shouldn’t have sold as many billions of shares in order to buy Twitter.

Source

That was it for today. Let’s see what the market brings and I will report on it next monday.

Morning Market Feed May 16th

As everybody seems to be focused on how high GME will go, I’m more focused on how high markets will go. As we know, markets have been pushing their boundaries, showing signs of slowing down, and with a recent slight pullback which was brought back up by good earnings, now even pushing new All-Time-Highs. As much as I try to give both bullish, as well as bearish perspectives, it’s no secret I currently lean more towards the latter one. So besides my highlights of the market which include Tuesday’s PPI report, yesterday’s CPI report, and monday earnings, I will explain the issues I am seeing in the market, so let’s dive straight into it!

S&P500 +1.24% | Dow Jones +0.94% | Nasdaq +1.56% | Russell2000 +1.25% | 10-year 4.34%
(Indexes at close of May 15th)

- Starting with the Producer Price Index

Some people use the PPI index as a leading indicator of where CPI will go. Quite a lousy one if you ask me, because PPI has been negative in both October and December of last year which was the leading indicator of CPI jumping back up in January.
So what was Tuesday’s release? Bad. Well not that bad due to the downward revisions of last month, making the final demand number -0.1% for March. But the PPI index showed a month-over-month increase of 0.5% in April, if we exclude February, we have to go back to August of last year for a reading that’s higher.

- So what about CPI then?

Well, I started by saying that PPI has been a terrible leading indicator for CPI recently and as PPI is near the highest reading in about 6 months, CPI has its first easing in 6 months which is a huge positive of course. So what was good and what wasn’t?
The positive was that inflation on car parts slowed down which will work positively on insurance as well, these are items that have been a pain in the butt in recent rapports as this item has seen inflation of 22.6% from April ‘23, to April ’24.

Year-Over-Year Changes in CPI

CPI Changes Per Categorie

- And those monday earnings?

Monday is my second largest holding as I think their business model allows for rapid expansion. It’s a smaller company however at an 8 billion market cap and has been volatile, in my opinion, due to two factors. The first being, that it’s an Israeli company. I will not get political but some funds have to, as at the key points when the conflict got more intense, the stock slid a little. So far monday has not really been affected by the conflict in their fundamentals. The second reason I believe we are seeing some volatility is the fleeing optimism for rate cuts. Small caps are impacted the most by interest rates as they are often seen to be needing the funding the most. Monday has a capital-light business model, is profitable, and has no debt. No need to panic about the interest rates. So what about the earnings?
You can read more about the earings in this article

- Why I’m more fearful of the meme rally than optimistic

On Monday I wrote a quick article on the previous GameStop rally. What I want to add to that is that it happened at the end of January, the beginning of February, this happens to coincide with the end of momentum for the stocks that were adding to the Covid-Bubble the most. In August of ’21, when AMC also failed to make everybody rich enough to buy at least 3 Lambo’s, it marked the peak in the Russell2000, and not long after, inflation turned out to be not so transitory.

So what do I think is important in this story? Is it the inflation I have already spoken about? Or is it the failure of these stocks?

It’s mostly that these rallies can be linked to a “last hurrah” after a very strong bull-cycle in my opinion. Do I believe this marks the end of a bubble? No, because I don’t think we are in such an environment, but we are in an environment in which most stocks are somewhat expensive, with AI-linked stocks simply being rather expensive. So seeing these stocks popping up gives the idea that it’s another piece to the puzzle that we may need some slowdown in the markets, and there may be some room for re-adjustments.

So as that is what are some bearish arguments, we should also look towards the other side, so what can we say is bullish? I can say two things very easily which make it quite difficult to be bearish. First of all, we have just seen a 5% pullback on the S&P500, and a 7% pullback in the Nasdaq. These pullbacks have reversed and yesterday we made fresh All-Time-Highs. A pullback has already happened. The second is that it is an election year. It is not a secret that election years are very rarely negative years in the market, with the only two in recent history being 2000 and 2008. This means that betting for a down year in the market means betting against obvious statistic.

S&P500 returns in election years by thebalancemoney.com

That was it for today, I will send another newsletter tomorrow going into the jobs data coming out today, as well as Wallmart earnings and other news items we will see coming out today.

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- One growth stock analysis per week
- Monday through Friday you’ll receive the Morning Market Feed in which I go over the news of yesterday with a skeptical/cynical twist. Finance should be fun, personal finance is serious enough by itself.

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Morning Market Feed May 14th

We saw the return of the meme stocks. GameStop, AMC, KOSS, and Robinhood, all of them were seeing a lot of momentum with AMC being the strongest momentum-holding name. Even Tesla was up today and that means that we will have to see what is happening, so let’s dive straight into it!

- Nvidia is now an inflation hedge
Just when you thought we were due for some market cool-down, I saw this article stating that after Bitcoin, Nvidia is now also a hedge against inflation. So now you know to just hold $30K GPU’s instead of gold. Okay, when actually reading the article they make some decent points. They say that gold is the favored inflation hedge by 46% of the survey participant, “but nearly a third said the tech behemoths are their first pick for the role”. The big tech behemoths here are Nvidia, Amazon, and Meta.
However strange this may sound at first, the article cites the impressive run these stocks have been on as an argument as to why investors like the equities as an inflation hedge.
Source of the GPU hedge

- The Kitten Returns
After three years of being absent from X, Roaring Kitty returns posting a simple meme that sparked GameStop (GME) to shoot up 50% in pre-market yesterday, peaking at $38.15, and ending the day at $30.45, up 74.4%. In after-hours trading, when there is less liquidity, shares have been pushed up to $36.90 again.
As a refresher, Keith Gill, “Roaring Kitty” was the one pushing his bullish view of GameStop which resulted in the short squeeze, which eventually ended as Robinhood had to shut down trading due to capital requirements. The stock was trading at around $480 in pre-market trading, or $120 after the later stock split.
The sudden boom in GameStop pulled other retail-focused stocks up such as SoFi, Robinhood, and Carvana. AMC, Koss, and BlackBerry have been joining the fun as these were part of the original pumps as well.
This one original tweet, caused over 1 billion dollars in paper losses for short sellers, who will be very much on their toes after today in order to prevent blow-ups.
You can check this article for more on what happened with the ‘21 rally
Source for the losses.

Despite all the attention today going to GameStop, and the participating stocks, there have been more companies with news. Because for example, we have so many Dicks…

- So many Dicks
Yes, we have too many of them according to ELF Beauty. Although it sounds funny, what they mean is that we have too many men named Richard, Rich, or Rick (Dicks) on corporate boards. This data came out as part of a push towards more diverse boards as ELF Beauty is only one of four publicly traded US Companies with a board that consists of two-thirds women, and one-third diverse. The latest push is part of the “Change The Board Game” initiative, and a poster with too many Dicks was posted in one of the busiest business hubs of New York (Picture below). ELF explains how they got the data and how the numbers stack up further in the article, but in my opinion, it’s great marketing to create a positive brand. ELF Beauty has been one of the best-performing stocks in the past 5-years with share price appreciation of 1230%.
Many Dick Article

- So what can we expect from our Dicks today?

There are some earnings we are expecting today which can be quite important. Will they move markets? Probably not due to the economic data expected today which I will tell you about after the earnings.

• Before Market Open:

Home Depot (HD): $3.60 of EPS expected on $36.637 of revenue
Home Depot will give somewhat of a read on the consumer as we have been starting to see mixed signals during this earnings season. True consumer stocks like Etsy have not had a good quarter, while most other stocks have done great. Home Depot will give us both the consumer for DIY projects, as well as business spend on projects.

Ali Baba (BABA): $1.42 of EPS expected on $30.498B of revenue
Ali Baba is one of the trades currently in play for retail investors as they are looking for a reversal in Chinese stocks. Ali Baba stock has been in the gutter as shares are now trading at $84, jumping 23% since the middle of April. At the peak in 2020, shares were trading over $300.

ON Holdings (ONON) $0.15 of EPS expected on $551.355M of revenue
ON Holdings is an important stock to watch if you are interested in Nike because it is one of the competitors that has been taking market share recently. ON Holdings doing good might mean that they take further customers from Nike.

• Economic Data for Today

Today will start with an important signal for tomorrow, as we are looking for PPI data to be released today. After the PPI release, all eyes will shift towards the FED Speaker for today as Jerome Powell, the FED’s Chairperson will give a speech about 30 minutes after the market opens. The numbers economists are expecting for PPI:

- PPI: 0.3% MoM, 2.2% YoY (Prior release 0.2% MoM, 2.1% YoY)
- Core PPI: 0.2% MoM, 2.4% YoY (Prior Release 0.2% MoM, 2.4% YoY)
- Prior PPI ex Food, Energy, Trade previous numbers came in at 0.3% MoM, 2.8% YoY. There are no expectations given but it is a number being looked at as this number makes up 68% of the PPI Index.

That was it for today, I will be watching the PPI numbers because if these come in hot, markets will get nervous about CPI tomorrow which can lead to some good buying opportunities. Tomorrow I will send another stock analysis, so Thursday I will report on the numbers from today and tomorrow.

If you liked this article, please make sure to subscribe to my newsletter. You can do so by clicking on the button below!
What to expect from it?

- One growth stock analysis per week
- Monday through Friday you’ll receive the Morning Market Feed in which I go over the news of yesterday with a skeptical/cynical twist. Finance should be fun, personal finance is serious enough by itself.

You can unsubscribe from the newsletter at any moment, this is of course without any questions asked.