Earnings Szn Is Fast Approaching

Analysts are less depressed than usual heading into this earnings szn July 5, 2024 | Peel #744 In this issue of the Peel: - 💼 The Fed may have just pulled off a first in American history - 🚗 Tesla continues to rip while Amazon falters on insider selling - 😃 Analysts are less depressed than usual heading into this earnings szn Market Snapshot 📸 Banana Bits 🍌 - Retail investors are throwing bands at the market, with stock allocations at their highest and cash at its lowest [since November 2021]( - Rival retailers Saks Fifth Avenue and Neiman Marcus [are combining](=) - Russia and China need a reality show because this [romance is getting crazy]( - The best stock trader to ever do it, Nancy Pelosi, is [back to trading]( - Greece decided it f*cking hates its citizens and is starting a [6-day workweek](=) 3 Reasons Why You Are Striking Out At Your High Finance Job Search The recruiting game is changing. Computers are taking over most aspects of application screening. You are filtered out before you get a chance to talk to the recruiter. Gone are the days when you could afford to have a shit resume but still walk out with a job. Or get a job because you attended a certain school. The competition is much higher, and your odds are much lower. The old-school mentality of let’s apply and hope we get an interview does not work. Below are three things you could be doing that will get you insane results. - Crappy resume. Wrong format. Typos. Wrong keywords. Things no one wants to know about you. You name it. In our experience, 99% of resumes have massive gaps. And most of them think they could no better. Our academy students (including ones from the top target schools) are awestruck every time we complete a resume review session with them. Here’s just one review so you hear from them, not us. “She was absolutely amazing - she evolved a resume review into a full-packaged guidance for recruiting strategy and how I should frame myself for the whole upcoming recruiting process.” - 100-500 LinkedIn connections. Really? Those connection requests are free. You don’t pay for them. And it can be done while you take a break from scrolling on your phone🙂 No, seriously, what’s stopping you? At WSO Academy, we help you draft proven outreach templates to 10x your LinkedIn networking success rate and push you to achieve weekly targets. “He was phenomenal help and provided tangible steps to take in order to strengthen LinkedIn profile, in conjunction to additional feedback on courses to take to strengthen LinkedIn profile.” - AI. You hear AI can pass standardized tests and will eventually rule over us, but you still haven’t started using it. At this point, there’s no excuse for not leveraging the power of AI. Tools exist. Many tools. And we use them at WSO Academy to supercharge your job hunt. From resume reviews to LinkedIn reviews and much, much more. As part of the academy, you have not just natural but artificial intelligence working for you. Here is a computer-scored report card of a resume before and after the mentor review and finally after the AI review. As part of WSO Academy, we help you address these problems and much more and get you a job in high finance. Can’t wait to start hearing from recruiters? [Click here to join the WSO Academy Waitlist. Limited slots only.]( Macro Monkey Says 🐒 The Previews Hope all of you American apes out there had a wonderful day of celebrating freedom and hating on England. Hating on England is an evergreen sentiment. Unfortunately, our freedom within the U.S. labor market is becoming as intolerable as King George III’s taxes. We’ll get the full employment report later today—or several hours ago, from when I assume most of you are waking up—but we got the previews earlier this week, so… Let’s get into it. The Numbers Like the actual tax rates levied by the U.K. on the sweet, innocent American colonists, labor market stresses aren’t actually all that high. But, it’s the trend that’s becoming a cause of concern. For starters, take a look at Wednesday’s ADP Report. According to the large HR and payroll software provider, private U.S. employment grew by 150k jobs in June. 150k additions isn’t necessarily a terrible number, but it continues the downward trend in ADP Payroll additions observed since March. Further, 150k is the 9th lowest number of additions in the 46 months since the labor market’s rebound in the summer of 2020. Economists had been guesstimating a total of 160k additions in June, meaning they missed the mark by 6.25%, but that’s pretty damn good for these professional gaslighters. Sectors leading in net additions were Leisure & Hospitality at 63k, Construction at 27k, and Professional & Business Services at 25k. Growth in the above sectors that contribute to society—Leisure & Hospitality and Construction—bodes well for the economy as it suggests consumers and businesses have the money to spend on traveling, leisure-ing, and investing in large projects. The only sectors that lost workers on the net included Natural Resources & Mining at -8k, Manufacturing at -5k, and Information at -3k. So, this must be where all those new job openings in Tuesday’s JOLTS report came from… Job openings increased slightly in June to 8.1mn, but as we can see in the below chart, the longer-term downward trend remains intact: [Source]( Ironically, declining job openings have actually been a good thing for the U.S. economy. The purpose of rate hikes and monetary tightening is, in part, to kill inflation by weakening demand for labor and thus slowing growth in wage-push inflation. With fewer job openings, clearly, labor demand continues to decline. But the best part is when we pair job openings data in red above with the unemployment rate. This is exactly the kind of goldilocks scenario JPow and the FOMC were going for—weakening demand for labor without getting everyone fired. Because C-19 triggered a brief supply-shock recession paired with the trillions worth of helicopter money dumped on the U.S. from sea to shining sea, consumers remained on good footing when the economy reopened. Businesses were able to hire back quickly and gradually meet the demands of consumers. In fact, consumer demand was so strong that at one point, demand for labor doubled the number of unemployed persons. So, given that consumers remained on solid footing throughout the health horrors of 2020 and 2021, when JPow started raising rates in 2022, businesses didn’t have to fire people en masse to reduce the cost of labor—there were just fewer openings. For the first time in American history, this allowed JPow and the FOMC to kill >5% inflation without sending the U.S. into a recession. Big Ws all around. The Takeaway? [Source]() This chart summarizes changes in the post-pandemic labor market well, with the orange line representing conditions in April 2024 vs the year prior (green line) and February 2020 (black line). The most notable changes include the decline in private hiring, an increase in average hourly wage growth, and an increase in overall employment cost. Basically, this means that JPow and the FOMC have quelled the beast of inflation not just without destroying the labor market but arguably improving it, particularly for people who enjoy making more money. So far, this week’s employment data adds fuel to the fire that rate cuts are close on the horizon, given the (mildly) weakening labor market. But, just like in 1776, we’ll have to wait to see if this actually works. What's Ripe 🤩 Paramount Global (PARA) 📈6.9% - What’s old is new again as the son of one billionaire readies to buy a company owned and controlled by the daughter of another billionaire. - Skydance Media, run by Larry Ellison’s son David, and Paramount, owned by Shari Redstone via National Amusements, are close to merging... again. - Previous negotiations fell through, but after fielding bids from the likes of Apollo, Warner Bros, and others, Paramount couldn’t say no to [these updated terms](). Tesla (TSLA) 📈6.5% - Only 3-days into this week, it’s already been a great one for Tesa as the market has determined its future cash flows are now worth helluva more than last Friday. - Shares continued to ride the wave of strong delivery numbers. Plus, Cathie Wood sold shares, which is hella bullish for all non-meth-smoking investors. What's Rotten 🤮 Amazon (AMZN) 📉1.2% - Jeff Bezos has ostensibly found himself in a tough financial situation, forcing him to cash out another $5bn. Poor guy. - But there’s more going on at Amazon, including the forced retirement of their Astro robot security guard so he can spend more time at home. - I can think of a few presidential candidates who should do the same, but the bot meant for home use and business security will now be exclusive to the former. Constellation Brands (STZ) 📉3.3% - There was a bear market of fun last quarter as this joy, I mean, alcoholic beverage maker* missed analyst estimates. - Sales came in ~2% below expectations, while earnings managed to beat. However, Wall Street is more focused on demand concerns than cost cuts. - Shipment volumes fell 5.1% in key segments, and apparently, they didn’t f*ck over consumers enough with price hikes to compensate. Rookie mistake. = Thought Banana 🤔 Drum Roll Please The most wonderful time of year is once again soon upon us, for the third time this year. The second-quarter earnings szn is set to kick off next week, with large banks, airlines, and insurance companies leading the way. Analysts have been adjusting their estimates all quarter, hoping to be as not wrong as possible. Let’s see how it’s going. The Numbers Like graduating from college, analysts tend to begin a quarter with a lot of optimism. But it takes less than a few months to fall back to reality. This quarter, however, that initial optimism wasn’t as wrong as it usually is… for now. Analysts have lowered their aggregated S&P 500 EPS estimates by 0.5% so far, much lower than the average cut to estimates of 3.3%. = [Source](=) That’s likely because analysts were less optimistic than usual coming into Q2, as the S&P 500 fell 5.5% between the end of March and mid-late April. Some people’s mood is determined by the alignment of stars, and, equally schizophrenic, the mood of Wall Street analysts tends to be determined by the S&P’s performance last week. To each their own. But, the sectors hashing the mellow of analysts the most include Industrials, Materials, and Consumer Staples, getting their EPS estimates knocked down by 4.7%, 2.8%, and 2.5%, respectively. = As always, earnings szn is sure to bring its usual surprises. Whether those lead to an increase in net worth for all of us or cause a storm of raining stockbrokers in NYC, we’ll have to wait to find out. PepsiCo, Delta, and Conagra are the first that anyone will care about, dropping on Thursday. Then, the party really gets started on Friday, with the likes of JPMorgan, Wells Fargo, and Citigroup showing us just how much they ripped us off last quarter. Gotta love it. The Big Question: What are your thoughts on this quarter’s earnings szn? Are we gonna see over or underperformance? Banana Brain Teaser 💡 Previous 🗓 There are 8 teams in a certain league and each team plays each of the other teams exactly once. If each game is played by 2 teams, what is the total number of games played? Answer: 28 games Today 🕐 At his regular hourly rate, Don had estimated the labor cost of a repair job as $336 and he was paid that amount. However, the job took 4 hours longer than he had estimated and, consequently, he earned $2 per hour less than his regular hourly rate. What was the time Don had estimated for the job, in hours? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says 🤓 “The Federal Reserve’s job is to control inflation and maintain price stability” — Jerome Powell How Would You Rate Today's Peel? 😁[All the bananas](=) 😐[Meh](=) 😩[Rotten AF]( Happy Investing, David, Vyom, Jasper & Patrick [ADVERTISE](=) // [WSO ALPHA]() // [ACADEMY]() // [COURSES]() // [LEGAL]() [Unsubscribe]( IB Oasis Corp. (aka "Wall Street Oasis") 14435 Big Basin Way PBN 444 Saratoga, California 95070 United States