Permanently Transitory?

Inflation may not be as transitory as thought... Silver Banana goes to... [image]() Market Snapshot Happy December. It’s the last month of the year and markets still don’t seem to know how they feel about the pandemic. Terrified on Friday, carefree on Monday, and back to scaredy cats yesterday, the market took a dive. The Nasdaq sank like a rock, falling 2.41%, the S&P lost 1.90%, and the Dow followed close behind with a 1.86% drop. Side hustles have NEVER been easier than with Crypto. With Nexo you can earn a fix rate by lending out your crypto, or if you need some cash, you can borrow using your crypto as collateral. Make passive income today! [Earn up to 12% by lending or borrow for as cheap as 6.9% today, there's nothing to lose.](=) Let's get into it. Macro Monkey Says *Gasp* — After months of ridicule by various groups of haters, from Twitter trolls to fellow government officials, the Fed has finally woken up to the fact that current inflation may not be as transitory as hoped. Speaking before a Senate panel early yesterday, JPow asserted his belief that it’s probably a good time to retire the transitory label. If that wasn’t groundbreaking enough for your taste, Powell also indicated that the Central Bank will be discussing an acceleration in the timeline for asset purchase tapering at the upcoming December meeting. JPow made clear that he and his companions at the Fed would be more than willing to wrap up the tapering process a few months ahead of schedule. Never one to leave us guessing, JPow said that the current economic conditions are much like a quote from famed American poet Ke$ha - “hot and dangerous.” Actually, what he said was - “At this point, the economy is very strong and inflationary pressures are higher”, so basically the same thing. The market, in a word, was disappointed. Although JPow hinted at strong economic conditions now, financial markets are forward looking mechanisms, so hearing that inflation might run too hot is like telling a dog he can’t have his treats. The Great Reassessment — Americans may be becoming quitters at higher rates than ever, but they’re also becoming founders just south of record levels too. As many have termed labor market activities this year as the “Great Resignation”, many such as Heather Long of WaPo and Kara Swisher of the NYT have applied their own term: The Great Reassessment. Never let a crisis go to waste. That is the philosophy driving many Americans to quit their jobs and risk it all with an entrepreneurial venture. Crises often shake up the lives of those involved to such a degree that they begin to evaluate opportunities that may not have been seriously considered before, like starting a business. As seen in the chart below, during and immediately after broad economic recessions is very often a time in which new business formation speeds up or peaks. The COVID crisis is no different. Growth in self-employed workers is a powerful signal for the overall economy. In order to be willing to try to be an entrepreneur, you have to have the financial resources and self-confidence that you will succeed. That doesn’t come if the average citizen is in a bad economic position, so the fact that we’re seeing staunch growth right now is a clear indication that we’re full steam ahead. Of course, many ventures will fail. It will be interesting to follow labor market dynamics over the next few years to see any underlying structural changes in employment. Living in the time of content creation where dancing on TikTok can be enough to support a family, Charli D’Amelio might just be Gen Z’s Steve Jobs. [image] Passive Income With Crypto! [image]() Nexo is a trusted and easy-to-use crypto platform where you can securely store your crypto and earn up to 12% per annum, paid out daily. You can also buy, sell and swap one asset for another with more than 150+ exchange pairs to choose from. And if you need cash but don’t want to sell, you can place your crypto as collateral and borrow with rates starting from 6.9% APR. 2.5M+ people already trust Nexo with their crypto. So whether you’re just getting started or searching for a better way to access crypto markets, [start today with Nexo!]() What's Ripe Apple ($AAPL) — You know it’s a bad day for markets when the S&P’s second most valuable company is up, yet the overall market is down sizably. Apple’s 3.2% gain wasn’t enough for everyone, but it was damn good for them. As we discussed earlier this week, the flight to safety is underway, and there’s arguably nowhere safer in stocks than in Apple. Plus, having a VR headset, AR/VR glasses, and an EV/AV in their product pipeline isn’t a bad lineup to have. Pfizer ($PFE) — Pfizer posed another lone green light in markets yesterday. Shares gained 2.5% as the big pharma favorite isn’t yet done saving the world. Not only is the firm’s antiviral COVID pill set for shipment, but the flight to safety among vax makers puts Pfizer in a league of their own. Competitors and colleagues, like Moderna and BioNTech, respectively, rely far more on their COVID vaccines for success. Pfizer’s nearly $18bn in 2019 pretax income says otherwise. What's Rotten Social Stocks ($FB, $TWTR, $SNAP) — Quick question: what dries up faster than snow in the Sahara? Ad dollars in a pandemic. Recall, back in March and April of 2020, the first line item companies cut was marketing expenses. Now that the market knows this, and another variant is ready and willing to f*ck us up again, firm’s that rely on advertising are feeling the heat. That became crystal clear yesterday, with Meta and Twitter falling 4.0% and Snap lost a quick 2.6%. Cocoa Prices ($CC) — If there’s one bright spot throughout all the mayhem of the past year, it’s that the price of your choco milk has dropped meaningfully. Falling 1.6% yesterday as one of the day’s worst performing popular commodities, cocoa has extended its annual loss to nearly 17%. With overall food prices responsible for much of the inflation we’re seeing now, it’s time to think about sustaining yourself purely on choco milk. Just a thought... Thought Banana: Legacy — Jack Dorsey, or as he likes to be known, “jack”, has officially left his original lover for a far younger and more attractive opportunity. After years of attempting to two-time Twitter with his mistress, Square, Dorsey has thrown in the towel and moved in with his new family. Given that Twitter was founded all the way back in 2006, or 15 years ago (wtf), let’s take a look at the founder’s legacy on the firm. Was it iterating on products to come out with fancy new features every year? No. Was it revolutionizing an industry and becoming the dominant player in a space? Ha. No. Was it drastic share price outperformance? HELL no. So what was it? Well, not really all that much tbh. Dorsey led the change from 140-character limit to the whopping 280 we get now. He introduced Fleets, and then almost immediately killed the feature. Jack oversaw the implementation of Spaces, which is actually pretty cool if you ask me. While it would be hard to argue he kickstarted any groundbreaking developments, the microscopic product improvements over the years somewhat amount to a pretty not bad tenure. Unfortunately for the share price, as seen below, the market never really cared all that much. So long Jack and hello Parag. It’s a new age at Twitter, Inc. Wise Investor Says “The game of professional investment is intolerably boring and overreacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate toll.” — John Maynard Keynes Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? Sign up for the WSO Daily Peel [here](. [ADVERTISE]( // [WSO ALPHA]() // [COURSES]( // [LEGAL](=) Don't want The Daily Peel? [Unsubscribe here](). Click to [Unsubscribe]( from ALL WSO content Wall Street Oasis (IB Oasis Corp.) 20705 Saint Charles St Saratoga, California 95070 United States