August 21, 2023

📰 News Organizations

• Nasdaq Notches Longest Weekly Losing Streak Since December. Shares of major tech companies, including Meta, Amazon, Microsoft, and Alphabet continued their decline last week as markets question how much higher interest rates need to go. The narrative this month has been on longer duration yields.

• U.S. Plans New Tariffs on Food-Can Metal From China, Germany, and Canada. The Commerce Department said an investigation found that steelmakers from the three countries sold their tinplate products in the U.S. at unfairly low prices, justifying new import duties.

• Palo Alto Networks Surges After Billings Outlook Beats Estimates. Palo Alto surged after projecting stronger billings than Wall Street anticipated, easing fears that a slowdown in demand may weigh on results. The company sees billings for the fiscal year to a range of $11 billion.

• WeWork Plunges Another 11% After Announcing Reverse Stock Split. WeWork said in a filing on Friday that it would undergo a 1-for-40 reverse stock split to try and retain its NYSE listing. The stock fell another 11% to 14 cents and has been trading under $1 since late March.

• Shein Outguns Amazon and Walmart in South Africa. Shein has become the most downloaded shopping app on South Africa’s Google Play store. Consumers are lured by its competitive prices, on-trend fashion, and speed of delivery.

🐦 Twitter

• Over 60% of outstanding mortgages have an interest rate below 4%. This is the #1 factor driving the limited housing supply as many of these homeowners can't afford to move. Source.
  

• Energy led again Friday (and is the only sector in positive territory MTD) while some traditional defensives also saw some strength; YTD leader Comm Serv was the worst performer but is still up by >37% YTD. Small caps pulled ahead but continue to lag large caps MTD. Source.
  

• To put things in perspective, US government spending increased 14% over the last year while tax receipts declined 7%. This year’s cumulative deficit is more than 200% the size of the YTD deficit last year, $887 billion above last year’s level. Source.
  

• A swift sell-off in technology stocks and surge in Treasury yields are punishing Cathie Wood's flagship ARK Innovation ETF, leaving the closely followed fund down more than 19% for the month of August. Source.
  

• Cash-like funds have recorded inflows of $925 billion so far this year, already surpassing the 2020 full-year record of $917 billion. Treasuries are also uniquely popular, on pace for a record $130 billion of inflows this year: BofA's Michael Hartnett, EPFR data. Source.

📓 Online Publications

• Berkshire Hathaway Sells 9.29 Million Shares of Chevron Stock. With Chevron stock stalling while growth stocks rebounded in 2022, Berkshire began selling Chevron stock. But Chevron is still Berkshire's fifth largest public equity holding, suggesting it still thinks Chevron's at a good value.

• Q3 GDP Tracking: Moving Up. Goldman says July utilities output and auto production were stronger than previous assumptions, and they boosted their Q3 GDP tracking estimate by 0.2pp to +2.4% (qoq ar). They also raised the domestic final sales growth forecast by five-tenths to +2.6%.

• San Francisco Wants to Hit the Brakes on Robotaxis. Even if the CPUC agrees to postpone the recent expansion, it would likely just be a road bump. App downloads for Cruise and Waymo surged this week, and are gearing up to roll out fleets in Los Angeles, New York, Austin, and Miami.

• Estée Lauder Pulled Back About 2% After Lower-Than-Expected Guidance. The company expects an adjusted loss of 31 cents to 21 cents per share in its fiscal first quarter. The perfume and cosmetics mainstay suffered from a double-digit drop in Asia-Pacific sales.

🎧 Podcasts

• A.I. Adoption Key to Companies Thriving. Successful companies in the future are those empowering employees to use AI creatively, driving innovation and value. Embracing AI becomes crucial for growth, while resistance risks losing talent and stifling progress. Source(13:39)
  

• Saudi Arabia And The United Arab Emirates Race To Buy Nvidia Chips To Power A.I. Ambitions.The UAE partnered with a French start-up to build one of the most advanced Large Language Models out there. Saudi Arabia is also buying a lot of chips with labs mostly staffed by Chinese researchers to advance their A.I. research. Source(5:00)
  

• Liquidity Issue Contagion. The most liquid parts of the commercial real estate markets are not so liquid anymore, driven by what's happening in the economy. That can create issues like the banking crisis, which forces re-evaluation to take place. This can lead to fire sales and losses. Source(10:40)