Higher Rates vs. Q3 Earnings

Higher Rates vs. Q3 Earnings

Good Morning Everyone!

Remember, in the short-term there's always a reason to sell. But we’re not short-term players.


Price as of 4 pm EST, 10/19/22; % YTD


MARKET UPDATE

10Y yield: hit year-to-date highs

Fed Pivot? Maybe Pause?

  • Bullard expects the Fed to end its front loading of hikes by next year

U.K Prime Minister Liz Truss is stepping down as UK Prime Minister

  • Shortest-serving leader in British history

Crude 86 +1%

  • Crude higher on news the Chinese government debating whether to reduce time people visiting the country have to spend in quarantine

  • Investors called Biden’s plan to buy oil at $70 to return to the SPR “Biden Put”

  • Energy companies can invest knowing they will get at least $70

Tesla TSLA    

  • Elon: “demand “a little harder” near term but Tesla not concerned

  • Elon talked about recessions in China and Europe (U.S. pretty good)

  • Auto gross margins missed

Union Pacific UNP     

  • $3.19 vs. street $3.06

  • Reducing fiscal year carload growth from 4-5% to 3%

  • As Elon said: “demand/volumes a little harder near term”

  • CSX reports tonight

Netflix NFLX

  • Media speculating the logic of a Netflix-Microsoft combo

  • Microsoft could easily afford Netflix, $120 billion vs. Microsoft’s $1.7 trillion market cap

  • Netflix’s co-founder, Reed Hastings, is a former member of Microsoft’s board

  • Microsoft’s president, Brad Smith, is a Netflix board member

Taiwan Semiconductor TSM

  • Considering building a manufacturing plant in Japan to reduce geopolitical risk

  • Yara (fertilizer)                  +7%

  • Nutrient should have a good day today

  • Yara reported positive earnings results

  • Special Dividend and to consider further cash returns including share buybacks

Hermes               

  • Luxury consumer doing just fine

  • Q3 Revenue rose 24% at constant currency

  • Europe sales +12%, Asia sales +32%, America +18%

  • All products up double-digit except Perfume, Watches +55%

  • That $7,000 Hermes Birkin Bag is heading toward $8,000 in 2023

Earnings

  • IBM IBM +4%

  • Crown Castle CCI in-line                  

  • Lam Research LRCX

  • Kinder Morgan KMI

  • Las Vegas Sands LVS

  • PPG Industries PPG -3%, Q4 EPS guide below the Street

  • Danaher (NYSE: DHR +3%, raises fiscal sales guide

  • Philip Morris PM

  • Union Pacific UNP

  • AT&T T

  • Blackstone BX

  • Marsh & McLennan MMC

  • Freeport-McMoRan FCX

CRYPTO UPDATE

FTX FTT/USD recovery plan for Voyager

  • Customers could recover ~72% of funds

  • FTX would pay $51 million in cash, move customers to its platform

  • Voyager bankruptcy payout plan needs approval first (December)

  • Voyager attorney: FTX providing “the only viable alternative”

  • FTX won bid for Voyager’s assets last month ($1.4 billion)

Plaid launches first web3 product

  • “Wallet Onboard”

  • Simple integration to +300 Ethereum wallets

  • Exploring more product offerings in web3 space, other blockchains

  • Replicating existing products in web3 (ex: identity verification)

Bitcoin Fear & Greed


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