Tesla hits a trilly

October 26, 2021 Tesla hits a trilly Good morning traders, Welcome back to The Daily Setup. Markets edged higher yesterday, with the Dow, S&P, and Nasdaq all enjoying gains on Monday to start the week positively. Here's what's on the docket today: - Tesla hits one trillion in market cap thanks to... Hertz? - Facebook reports earnings - PayPal passes on Pinterest So pour a cup of joe and let's get to work. Jeff Chart of the Day – Equifax Equifax shares were up over 2.8% on Monday after a strong Friday, making a full recovery from the sucker punch shares took after their Q3 earnings report revealed [a net income of $205.4M](, more than 10% short of analysts' estimates. EFX is up 42.98% YTD. - EFX's numbers may have stabilized so quickly thanks to the company's hella aggressive attitude towards future acquisitions. Investors probably believe they can back it up given that Equifax has already acquired eight companies this year. - These mergers are no joke. One such acquisitionâ --that of data analytics consultant Appriss Insights-- cost Equifax a hefty $1.8B and might singlehandedly revive the city of Louisville. Odds are there's a lot of horsing around in an office that's so close to the Derby. Tesla hits a trilly and PayPal passes on Pinterest BIGGEST MOVER Buy the Dip, Sell the Soul No one will be surprised to hear that Facebook's shares have been rocky-- down [roughly 10%]( since Frances Haugen blew the whistle. But thankfully for investors: most Wall Street analysts [are still bullish]( about Evil, Inc, or whatever new name it might try to to hide behind, possibly in light of its Q3 earnings report. - EPS came in at $3.22/share over the expected $3.19/share, though revenue came in $500 million below estimates. - Some point to the company's many, many scandals as proof of Facebook's resilience as the center of the global advertising market, which is about as logically sound as pointing to someone's drug addiction as proof of that person's dedication. - It's also possible that investors have faith in the company's upcoming rebranding effort, in which they'll turn away from social media and instead try to create the metaverse. - FB stock rose 1.26% during trading, and 1.92% afterhours after earnings were released. As is clear from their shadiness, Haugen's disclosures, and their planned name change, Facebook's flailing in the public eye. Those exclusively considering financials may see an opportunity for Facebook to turn things around, but the public's dislike for the company is likely to last and do lasting damage to share value. On second thought… [Bloomberg reported]( last week that PayPal (PYPL) had approached Pinterest (PINS) about a potential merger. Specifics of the deal were said to be a $70/share valuation, which would have given Pinterest a $45B market cap. However, after much consideration (read: less than a week), PayPal decided to "[not pursue the acquisition]( of Pinterest at this time." No reasons were given, and we can only hope this ended amicably for the kids' sake. - PYPL was down 9.8% last week, while PINS rallied more than 12% on the rumor. - After it was reported Monday that the rumor was just that, PYPL rallied to close the day up 2.7%, while PINS got crushed, closing down 12.7%. - Both stocks have 'rona to thank for the immense increase in online shopping. PayPal and Pinterest are up 122% and 235% respectively since January 1, 2020. The potential deal would have given PayPal a key social media company as it looks to build a "[super app](", one that encompasses social media, e-commerce, and fintech capabilities. With a market cap of $280B, PayPal has plenty of cash to make acquisitions and should be kept in your watchlist as other potential merger candidates come to light. Yea, I'm thinking I'm back In what could only be described as the most impressive comeback since MJ's return to the Bulls in '95, Hertz Global Holdings (HTZZ) announced Monday that it would [order 100,000 Teslas]( by the end of 2022. Electric vehicles would then make up 20% of Hertz's global fleet. Now you're probably thinking to yourself, "but I thought Hertz was bankrupt?" Well, they were, but the company emerged from Chapter 11 bankruptcy in June smelling like roses…with "$300M on its balance sheet on June 30 and considerable borrowing power in asset-backed securities and regular debt", [according to sources](. - The news sent shares of both Hertz and Tesla soaring in Monday's trading, with Hertz gaining 10.04% on the day - Tesla exceeded the $1000/share threshold, closing up 12.7% - Elon's brainchild eclipsed the $1T valuation for the first time ever. This makes the company the fastest to that mark. It took Tesla only 18 years, while the next fastest was 21 years by Alphabet (GOOGL). Suck it Larry and Sergey! (Elon's next tweet, probably) Car rental companies have faced an extreme shortage in vehicles this year as people have started traveling again now that the pandemic has started to ease. Hertz (HTZZ) is up [62%]( in the last 3 months, while Avis Budget Group (CAR), the only other publicly traded rental car company on major exchanges, has been hyperbolic with a [116% gain]( over the same time period. A pullback in price could be in store, but with the holidays around the corner, keep your eyes open for signs of a continued rally. Bath and Body Workin’ It Buy the Rumor [Work It GIF - Find & Share on GIPHY]( As worsening inflation and continuing supply chain woes drive timid consumers yet further into their caves, [retail stocks]( are becoming more and more undervalued. Bath & Body Works appears better situated to weather the storm than most of its peers, receiving [a buy rating]( from some analysts. - BBWI's supply chain is over 90% domestic, so in a sense the world's misfortune is their good luck. - Since most retail outlets rake in an outsize portion of their annual revenue and profits during the holiday season, the upcoming months are especially important. More shopping means more supply chain stress-- which in turn means that BBWI's domestic chain gives the retailer even more of an edge over the rest of the competition. Despite these upsides, this is not a great time for brick-and-mortar retailers. The pandemic dealt those establishments a serious blow with e-commerce giants swooping in to pick up the slack, and the delta variant is slowing down recovery (if not wounding it permanently). BBWI is vulnerable to this issue just as all other brick-and-mortar retailers are-- but as a potential leader of the pack, BBWI is a decent bet that I will consider. WFH and Netflix Other News For the kids Shares of Moderna (MRNA) were up sharply Monday with the company's announcement that their [Phase ⅔ trial]( for aged 6-11 year old kids produced strong neutralizing antibody responses. - The trial included 4,753 participants in the 6-11-year-old age range. - Two 50 microgram doses (half the amount for older individuals) were administered. - Moderna said that the children responded more strongly to the vaccine than those in the 12-17-year-old range. - No efficacy results were given in the company's statement. - The announcement comes the day before the FDA vaccine advisory committee is set to discuss whether to authorize Pfizer/BioNTech's covid vaccine for children aged 5-11 years old. - MRNA finished the day up 7%, while Pfizer (PFE) and BioNTech (BNTX) finished the day flat and up 6% respectively. RIP WFH? I guess [5th harmony was wrong](... Tech giants like Google, Amazon, and Facebook have been gobbling up commercial real estate lately, which could be a sign that working from home, that one shining beacon of light in an otherwise soul crushing corporate existence, could be coming to an end. Google [is purchasing]( the St. John's terminal building in Manhattan for $2.1B, and it's doubtful the C-suite is planning on having it sit empty. A company spokesperson said the purchase reflects a "more flexible hybrid approach to work". - Alphabet, Google's parent company, previously announced plans to build a 40 acre campus encompassing housing, retail, and office space which the company would own. That certainly doesn't sound like modern day indentured servitude at all. - Amazon is currently building a massive campus in Northern Virginia with space for up to 25k employees, and it has been leasing office space throughout the US. Next Stop, Investment Grade Good news arrived at Netflix's HQ, granted the mailman had to walk past 'flix walkout protesters to deliver it. S&P Global Ratings [raised Netflix's (NFLX) credit rating two levels]( to BBB, officially making them investment grade. Granted it's the lowest rung, but who cares. The streaming giant, which previously had to fund its content production utilizing debt, will now use excess cash to buy back shares. They grow up so fast... - NFLX shares are up 24% YTD so far. - With 213M subscribers, the cash flow engine should continue to fire on all cylinders, ensuring that the company can continue to invest in Squid Game. - The news was a welcome reminder that bonds are indeed still a thing that can actually be bought and long ago provided what our forefathers called "income". [Image] RagingBull, LLC 62 Calef Hwy. #233, Lee, NH 03861 [Unsubscribe from all RagingBull emails]( Questions or concerns about our products? 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