Mkts, Layoffs, Inflation, Fed, NFLX, TSLA

Breakaway - Investing & Finance

Sep 30 2022 • 27 mins

Markets

Down 24% YtD.


Layoffs and Freezes and Downgrades and Upgrades

  • Lyft has frozen hiring.
  • Meta froze hiring.
  • Docusign cutting 9% of workforce.

Apple downgrade: The iPhone maker dropped 4.9% after Bank of America cut its rating to neutral from buy, warning of weaker consumer demand for its popular devices. The selloff erased roughly $120 billion from Apple’s market capitalization.

Nike down 10%. Inventory up 44% QoQ.


Netflix

Netflix upgrade:


Netflix up 35% in quarter from $175 to $240.

  • Advertising $’s. $65/1000 views.
  • Advertisers may allocate from Meta to Netflix.


Federal Reserve

The Fed led by Jerome Powell raised the Fed Funds rate 75 bps to 3.0 - 3.25%. Expectation is now 4.0 - 4.5% by year end. Powell is determined to sink the economy to drive inflation to 2%. Why 2 and not 3%. We have a strong economy, strong underlying demand, low unemployment and the Fed is determined to destroy that.

CathieDWood (@Cathie Wood) Tweeted: The Fed is basing monetary policy decisions on lagging indicators: employment and core inflation. Leading inflation indicators like gold and copper are flagging the risk of deflation


Commodities

Commodities are down.

  • Lumber: $410 down from $1300 in February 2022.
  • Copper at $334 from high of $494 in March.
  • Iron Ore $150 to $109.
  • Oil? Not so much

Housing

Housing: 30 year mortgage rate is up from 3% to 7%. Result: $23k increase in down payment (assuming 20% down) and 100% increase in monthly payment (from $1,345 to $2,694).

Tesla

Tesla Recall. NHTSA FUD. Tesla is recalling more than a million cars because of defects in their automatic windows that could injure passengers, the nation's auto safety regulator said.

FSD Beta. Rolling out to all owners with driving score >80.

Tesla AI Day.

  • Note, this event is meant for recruiting AI & robotics engineers, so will be highly technical
  • As well as advanced chip & supercomputer engineers for next-gen training & inference

What are Jim and Mary thinking?

Quote: Children are happy because:

  • They’re not self conscious.
  • They lack a sense of time pressure
  • They’ve no goals.