Amaz-sucks

Amazon; struggling global supply chain; and couchsurfing paper billionaires... Market Snapshot Friday was an abso-f*cking-lutely brutal [red wedding]( day for the broader markets. Markets ended the month of April after their worst calendar year start in decades. April was horrendous all around; just ask Cathie Wood. Futures pointed lower on Friday morning, and then they just kept falling, closing at session lows. Amazon and Apple, the last standing tech giants, traded lower, especially after Amazon’s first earnings miss in the better part of a decade and first loss since the dot-com bubble. At the closing bell, the Dow was down 2.77%. The S&P gave back 3.63%. The day’s biggest loser was the Nasdaq, down 4.17%. What a way to cap off a terrible month! [image] Are your MS Excel skills holding you back? Are you still using a mouse when you do your analysis? If you’re looking to master the tools that will make you successful as a finance professional or technical communicator, look no further than WSO’s [Excel Modeling Course](=). Let’s get into it. [image] Banana Bits - After taking a break from her stonks for the weekend, Nancy Pelosi led an [unannounced visit](=) to Ukraine - The Oracle of Omaha and his senile bestie were back at it this weekend, passing out [obvious advice](=) in a tough market - Finance is a different world, and [excel]() is its love language. - After a surprise contraction in the economy and an FOMC meeting on deck, we might be in for [another bumpy week]() - April was the worst month for the S&P since March of 2020, and now we have [inflation and fearful consumers](=) to worry about - The White House is still considering expanded [student loan forgiveness](, just in time for the primary season for the upcoming November midterm elections Macro Monkey Says Supply Chain Pressure — Friday’s market activity was significantly influenced by the struggling global supply chain. Indeed, Intel, Apple, and Amazon, three of Friday’s most notable movers, all traded for the first time after their quarterly earnings calls; all three noted struggling supply chains. Take a step back and think about the macro big picture: there is too much money chasing too few goods. The result: rampant inflation. Inflation in many Western countries has soared, topping multi-year highs. No $hit, Sherlock. The world closed down for a couple of months, and then central banks lowered interest rates to zero while governments pumped those fat stimmy checks into consumers’ bank accounts. At the same time, producers of raw materials and traditional supply-side commodities had trouble keeping their outputs on track. There are two sides to this problem. Economists boil this down to “supply and demand,” a very simplistic model of how the world works. Lately, central bankers have signaled aggressive monetary policy actions to take inflation. What they’re really trying to do is slow demand. As interest rates go up with adversarial rate hikes, borrowing money for consumption or investment looks less attractive. Over time, this can help tame the demand side of the equation, degrading the desire to consume or invest. But can demand destruction alone conquer the inflation beast? Some experts think that without an intact, resilient supply chain, regardless of interest rates and economic slowdowns, inflationary pressures will persist in the global economy. International economists have argued that the supply chain still has some catching up to do and that current inflation forecasts probably don’t accurately capture these shortfalls. This might explain the song we’ve heard on calls all earnings season long. No, not [Marcia Brady](: supply chain, supply chain, supply chain. Think about it: when’s the last time you bought something that didn’t have at least a piece of it made in China? Around 10% of [the Middle Kingdom](=) is subject to C-19 lockdowns or additional self-inflicted, heavy-handed uber communist policy that is affecting the supply side more than the average consumer realizes. Do you know where the metals in your electronically steerable phased-array 5G UWB antenna or your high-speed, low-latency system-on-chip in your WiFi router come from? Well, it might be Russia or somewhere else in Eastern Europe whose supply chain has been hampered by the war in Ukraine. These are just two examples that we often cover here at the DP; there are obviously more. But the takeaway is that just because central banks can crush demand with rising rates does not mean the supply chain ever catches up. Excel at Excel [image]() Being an MS Excel power user will separate you from your peers. In finance we communicate through analyses and data, and Excel is ubiquitous across the industry. With more than 105 lessons, hours of videos, and ten realistic modeling exercises, WSO’s Excel Modeling Course will help you master the skills that you need in the most prestigious jobs in finance. Sharpen your skills; from the basics of efficiently navigating a spreadsheet to logic or functions all the way to advanced analytics, WSO's [Excel Modeling Course]() will set you up for success. What's Ripe Chinese Tech Stocks ($BABA, $JD) — It’s hard to dignify many of these Chinese company names with coverage, especially knowing that there’s potentially mucho fraudo happening in their financial statements and shadow business operations. If you haven’t watched [The China Hustle](, here’s a chance to educate yourself. Last week, Chinese authorities, including Xi himself, vowed to support the growth of platform companies. Investors interpreted this as a sign of strength and renewed opportunity in baskets of Chinese companies listed on American exchanges. Shares of Alibaba were up 6.82%, while shares of $JD climbed 6.66%. [image] [image] Mohawk Industries ($MHK) — Who says new flooring isn’t sexy? Friday, we found out that at least some of you think flooring is downright savory. Shares of the residential and commercial flooring and renovation company rose 7.86%. After seeing earnings growth and strong sales because of increased demand for home renovations, $MHK posted a smashingly good quarter on a brutally bloody Friday. [image] What's Rotten Amazon ($AMZN) — The biggest retailer in the world posted its first earnings miss since 2015 and its first loss since the dot-com bubble. Hopefully, you degens didn’t own call options on margin, because this bad boy was down 14.05% on Friday. Higher costs, disappointing revenue outlook, slowed growth, increased employee turnover, and probably some unmentioned warehouse piss bottle disposal costs; all took a toll on a $hitty quarter for Amazon. But not as big of a toll as the real steaming turd. That turd is Rivian. Again. Not only did Ford ($F, down 5% last week) get crushed because of its deal with the sham EV maker, $AMZN took a $7.6 ba-ba-ba-billion loss due to its crumbling position in the electric vehicle ponzi scheme. Have we mentioned that we like Rivian only slightly more than we like Robinhood? [image] Intel ($INTC) — Remember two weeks ago when we trumped the importance of guidance and sentiment vice earnings performance? Well, here’s a fantastic example. Intel had a decent quarter, beating estimates for both EPS and revenues. However, despite strong market headwinds, the chipmaker basically doubled down on an 11 against a face card for its remaining fiscal year guidance, reaffirming a positive outlook for the rest of the year. The street f*cking hated this, and it decided to punish one of the most boring tech companies out there because of it. Shares of your parents’ idea of “cutting edge” retreated 6.94% on Friday. [image] [image] Thought Banana The Paper Billionaire — Inequality is a thing, particularly when it comes to wealth. This true fact is a harsh reality of the world in which we live. A huge preponderance of the world’s wealth is held by a disproportionate few families and individuals, mostly in the Western world. However, some argue that many billionaires aren’t actually that wealthy. In fact, some see Elon Musk, the world’s richest man, couchsurfing and are convinced that he is a paper billionaire. A paper billionaire is someone who is worth a lot of moolah but cannot access these funds due to liquidity challenges. For example, if Elon were to attempt to sell all of his shares of $TSLA this afternoon, shares of the EV-maker would tank. In this scenario, not only would Elon pull out way less wealth than he had when he woke up today, but your cute little 3-share position would now be worth only 2/3s as much too. However, billionaires routinely liquidate relatively large chunks of their shares to pay taxes, pull out cash, donate to charity, etc., and usually, the share prices of their companies don’t go to $0. A great example is [MacKenzie Scott](=). She’s like the world’s [fourth-richest woman]() and has donated billions of dollars that were mostly held in Amazon shares when they were transferred to her in her $38bn divorce settlement. As she has drawn on these shares to make the world a better place, Amazon’s price hasn’t taken that fat of a steaming dump. There is a slew of other billionaires who have sold their shares to live their lives, so I’d argue that this argument is empirically false. While you haven’t heard much about it lately, about a month ago, the current presidential administration proposed a wealth tax on unrealized gains for households that hold more than $100mn in wealth. This tax would apply to approximately [35,000 families](=) across the country. If you look at the taxes collected from the top 1% of families in America, objectively, the percentage of the IRS’s total “revenue” is around 40%. If you look at the potential taxes from the top ten billionaires in the US by taking 20% of their unrealized gains away, you’re looking at only about [$215bn](=) in additional revenues, which wouldn’t even make a dent in that 40%. [image](=) Source: The Unintended Consequences Of Taxing Unrealized Capital Gains, Forbes In America, there is [over $7 trillion housed in 401k accounts](), which is roughly a fifth of all the retirement savings in this country. Food for thought: [according to the US government](), it ran a $2.7 trillion deficit in 2021, and this deficit is only going to get bigger in 2022. Even if the government forcibly seized our 401k’s, it wouldn’t even help support the federal deficit for three total years. The top 1% in America have more than [$40 trillion in wealth](). The entry point to the one-percenter club is at around $11mn in wealth. If you’re considering the same proposed wealth tax on this entire group, you might be able to find enough money to run the country for a single tax year. Deficit spending is as American as baseball, Marilyn Monroe, and apple pie. As interest rates go up, servicing the national debt will get more expensive. The tax revenue required, whether through a blanket wealth tax or boring ol’ income taxes, will also grow. As we consider more creative taxation solutions to our spending addiction, I challenge you to think about one question. Has there ever been a specialized tax in this country that has not eventually been extended in some way to cover the entirety of the tax base? Wise Investor Says “They can’t collect legal taxes from illegal money.” — Al Capone 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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