$pending

Self-slowing economy Market Snapshot The skill of putting the team on your back is not one that can be taught but is one we all strive to find, and fortunately for markets, they found the dude with that skill on Friday. That dude was Apple, single-handedly carrying indices out of the hot red depths into the cool green hills. The Nasdaq stormed up 3.13%, while the S&P followed with a 2.43% gain, and the Dow rose 1.65%. Let’s get into it. Macro Monkey Says $pending — On Friday, we discussed just how talented Americans are when it comes to spending money. Well, it turns out most of that talent was employed by U.S. businesses because spending by U.S. consumers actually fell in the fourth quarter by 0.6%, roughly in line with expectations. Economists actually got a forecast (mostly) correct, so good on them. Consumers were far less willing to dole out cash compared to the previous quarter, suggesting the economy may be slowing by itself. This is strange, especially during the Holiday season, and even worse, throws a major wrench into the plans of the Federal Reserve. Low interest rates encourage spending on big-ticket items due to the low cost of financing they create. Since March 2020, low nominal rates and negative real rates have encouraged spending out the wazoo, driving economic growth and inflation and arguably pulling us out of a recession. Now, as consumer spending slowed in the fourth quarter void of any discretionary rate hikes, this suggests the economy may be slowing under its own volition. This puts the Fed in a tough spot. We’ve held rates at 0 for almost two years now, and they can’t stay there forever, but if the Fed continues down the planned path for rate hikes, one in which the market is pricing-in four 25bp hikes, we might just pull ourselves into a recession. Keep in mind the whole reason for these rate hikes was to slow an overheating economy or, more directly, to slow inflation. Inflation is at least partially a function of spending, so if spending falls on its own, that reduces our need for rate increases to discourage frivolous buying. In short, this is not a good look for JPow. He and the FOMC have a tough decision to make soon that just might result in him being the first Fed Chair to plunge us into two recessions. Worse yet, he might have actually been right when he role-played as a broken record that just could not stop saying “transitory.” What's Ripe Apple ($AAPL) — An apple a day keeps the doctor away, but a solid Apple earnings report keeps the losses away. That was especially true on Friday after shares continued to rally on record numbers, closing up 7.0% and basically putting the entire market on its back. We dove into the numbers on Friday, but today we gotta shoutout Tim Appl-, I mean, Cook, because the guy is a supply chain master. As COO of Apple before the passing of Mr. Jobs, Cook ran the supply chain like Usain Bolt runs the 100m dash, a big part of the reason he is now CEO. This allowed Apple to manage the supply issues better than basically every other company, and Cook’s optimism on improvements in global supply chains this quarter was like a lullaby to shareholders. Robinhood ($HOOD) — F*ck Robinhood. Unfortunately, today it looks like I’m the only one making that argument as the market clearly does not agree, sending shares on a 9.7% ride. Even with that gain, Robinhood's all-time return sits at -63.8% — well-deserved for an “investing” app that’s currently less popular than the IRS app. Shares initially dropped 14.1% but rallied back later in the day. It wasn’t a great quarter, but it certainly could’ve been worse. MAUs fell against expectations while sales guidance for next quarter was just $340mm, well below the expected $448mm. With a net loss of $0.49/sh on the $363mm top line, Robinhood still saw nearly 90% revenue growth for the full-year while net income widened steeply. Oh yeah, and courts threw out lawsuits against the firm alleging illicit behavior during the whole meme stock fiasco. Not a bad weekend. What's Rotten Caterpillar ($CAT) — Good earnings, bad profit margins, and worse returns — that was the story with Caterpillar on Friday. The firm reported solid growth across its business lines and delivered a beat on both earnings and revenue, reporting $2.69/sh on $13.8bn in sales. But investors just couldn’t get over the hit to profit margins caused by increased overall costs, and shares tumbled 5.2%. Chevron ($CVX) — Things have been going well lately for Chevron, but not on Friday, not even a little bit. Despite dramatic increases in oil and gas prices and the potential for plenty more, Chevron missed bottom line estimates on its latest earnings report. On $48.1bn in sales, the company only delivered $2.56/sh against a $3.12 expectation, causing investors to vomit shares all day and push the price down 3.5%. Thought Banana Can I Get You a Drink? — Every now and then, we like to spotlight a whacky, deep-tech startup that’s attempting to do something straight out of 2100. Today, that startup is Cana Technology. Fed up with the amount of waste produced by bottled beverages, Cana set out to find a better solution. You might think it's some bamboo-cardboard container or a bottle that’s later used as toilet paper or something, but no. Cana went big. The company has developed a microwave-sized machine to act as a prototype for their system of 3D-printing beverages. That’s right, Cana says its prototype can “print” coffee, juice, cocktails, and much more through its molecular printers. CEO Matt Mahar explained the goal is to reduce waste in the global beverage business while also increasing convenience (and potentially alcoholism) to customers by putting every drink in the world at their fingertips. Step 1 to achieving this goal was just completed with the firm’s $30mm seed round funded last week by The Production Board. No, unfortunately, you can’t trade options on this yet. Sorry to break the news to all the degenerates out there. But hey, if all goes well, maybe one day you can day trade OTM calls on Cana while drinking coffee from their machine. Only, once you see the result from such trade, you might want to make that coffee Irish. Wise Investor Says “In many ways, the stock market is like the weather in that if you don’t like the current conditions all you have to do is wait a while.” — Low Simpson Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? Sign up for the WSO Daily Peel [here](). 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