Flirting with the Bear?

Market Snapshot The Futures pointed towards greener pastures Monday morning, and after the opening bell it kind of felt like a decent bounce was in the works. If you felt the same way, you weren’t disappointed. At the bell, the Dow was up 1.98%, the Nasdaq climbed 1.59%, and the S&P 500 gained 1.86%. BTC and ETH are still near key technical levels of 30k and 2k, respectively; and WTI Crude was basically flat yesterday, ending the day around $110/barrel. For today’s Banana Brain Teaser, I will unlock the [WSO Foundations Modeling Package]( for 50 bananas off the sticker for the first 15 respondents with the correct answer. Good luck, Apes! With Roofstock One, accredited investors can add the single-family rental (SFR) asset class to their portfolios without extensive capital or operational management. Institutional investors—such as banks, pension funds, and hedge funds—poured $6B into the SFR sector during the 1st quarter of 2021 alone. The sector remains uniquely positioned to benefit from structural and cyclical forces and fill a significant needs gap for affordable access to suburban housing markets, especially for younger families. [Check out Roofstock One (of-a-kind) investing](. Let’s get into it. Banana Bits - The U.S. has struck a [major Asia economic deal](), but not with China - Reaffirming America’s promise to its allies, Joey B promises another war if China [invades Taiwan](=) - If equities have you seeing red, why not give [real estate]( a try for once? - Even Putin’s [own diplomats]() are ashamed of his recent chicanery - Remember when your stupid uncle told you how easy trading was last year at your summer BBQ? Well, [not so much anymore](=) Banana Brain Teaser The answer to yesterday’s brain teaser was that the Mariana Trench was still the deepest, we just hadn’t discovered it yet. For today’s BBT, I will unlock the [WSO Foundations Modeling Package]() for 50 bananas off the sticker for the first 15 respondents with the correct answer. Let’s give this one a try: A woman is standing on Martha’s Vineyard, an Island in New England; her dog is on Chappaquiddick Island. The woman calls out to her dog, who immediately comes across to her. The dog doesn’t get wet. How does he do it? Shoot us your guesses at [vyomesh@wallstreetoasis.com](mailto:vyomesh@wallstreetoasis.com?subject=Banana%20Brain%20Teaser) with the subject line "Banana Brain Teaser" or simply [click here to reply!](mailto:vyomesh@wallstreetoasis.com?subject=Banana%20Brain%20Teaser) Macro Monkey Says F-35s for Everyone — The theme for today’s Peel is defense; In the words of Jim Cramer, there’s a bull market somewhere. For the investor who has a timeline longer than a few hours, there is likely a budding bull market in the major defense contractors. Think about it. These tens of billions in aid to Ukraine… where is that money being spent? Well, it’s being thrown into defense contractor deals like gasoline on a metaphorical fire. The U.S. government doesn’t just have a means of continuously running a production line that produces Stinger missiles or Switchblade drones. These weapons are purchased in lots, and the contractors who build them control their production. When the U.S. is on the hook to deliver xx thousand of them to Ukraine, the only expeditious way to get them in the hands of the Ukrainians is to pull off the shelves of its own stockpiles. Similar to pulling oil from its strategic petroleum reserves, the U.S. government will be on the hook to replenish a huge percentage of these defense assets when the dust settles. Factor in higher prices, inflationary pressures, and pricing power shifts, I think that the major prime weapons contractors are going to make money hand over fist in the coming years. Even the closely guarded purse strings of European governments are starting to cave to the idea of increased defense spending. We might see a wave of proliferation of F-35s to every corner of Europe in the coming years as NATO members start to chip in their full 2% of GDP. What does this mean for your portfolio? Well, it might be time to start thinking about defense as a port in this recent storm. While we don’t give financial advice, we do think it is worth thinking about the defense industry as a place to hide in a bear market and even a recession. 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, our [Excel Modeling Course]( will set you up for success. What's Ripe JP Morgan ($JPM) — Here at the Peel, we’ve written about the positive impacts of higher interest rates on both cash flows and profits for big banks. Hell, our [WSO Alpha]() chief investor even put some of our money where our mouth is and placed a hefty bet on them through the $KCE ETF earlier this quarter with the hypothesis that banks can make more money doing banking in this environment. Go figure, it’s simple economics. JP Morgan has somewhat validated this theory, announcing yesterday that it’s filling its coffers more quickly than previously promised thanks to its lending business. Yesterday, the folks at 270 Park Ave led a small collective of banks higher, to include Wells Fargo, Citi, and Bank of America. Another pro for $JPM is their dividend: they pay a fat buck a share each quarter, yielding almost 4%. JP Morgan closed the day up 6.08%. Deere and Co ($DE) — After sinking towards a 15-month low, shares of $DE ripped yesterday, climbing 7.25%. I personally love a comeback story, and here is a decent one. There are plenty of good memes about Ukrainians stealing Russian tanks courtesy of $DE, so maybe that’s why there was a little rally today? The stock was battered after fears of supply chain challenges and inflation ate a good chunk of its lunch last week. Yesterday’s move looks like a nice little bounce as the broader markets put together a teeny bit of a rally. Congrats to those of you who BTFD. What's Rotten Penn National Gaming ($PENN) & Caesars Entertainment ($CZR) — Yesterday wasn’t exactly the best day for online gambling. Both Penn and Caesars took a bit of a dive. Not all casinos or gambling media are recession or inflation proof, and traders yesterday thought that both Penn and Caesars were not great places to hide given current headwinds. Even if you’re a favorite of Barstool’s numero uno or Alan Garner, you can still have a bad day. Penn was down 1.92% and Caesars shed 3.71%. Broadcom ($AVGO) — As I reflect back on this calendar year, I’m struggling to string together any good thoughts to use the hashtag #DealSzn; it has been a literal desert for deals compared to the previous calendar year. At least Broadcom is giving me something to write about though. They’re in talks for a deal to acquire VMware, but I’m not sure the Street likes the whatever whispers are out there about its terms. VMware is up almost 25% on the news, but $AVGO took a decently sized dump on a day when stonks ripped. At the closing bell, Broadcom was down 3.10%. Thought Banana What is it good for? — The world has likely never seen such an aggressive, coordinated economic and diplomatic response against a single state actor in the modern era. For those of you who haven’t been asleep at the wheel this spring, you know I’m talking about the West standing united against Russia. For the rest of you, read a book. That being said, this conflict has done little good. While the concept of “Putin’s price hike” is arguably somewhat contrived, there is no doubt that conflict in the breadbasket of Europe during the growing season is bad for food prices for the average consumer. At the same time cutting off the world from Russian oil isn’t good for energy prices either. Some have argued that globalization is dead, particularly in March of this year when the War had garnered the most attention. I’d argue that this isn’t true: globalization is over for Russia. Putin’s actions have effectively isolated his country and his own people. On the other hand, a push for Westernization is absolutely not dead. NATO and EU membership, as well as further alignment with Western ideals will likely continue to gain steam in the coming months and years. Zelensky recently proclaimed at Davos that this War is an opportunity for a reboot in Ukraine. This reboot can bring about less corruption, a move away from wealth concentration in the hands of a Oligarchy and aristocratic elite class, and a trend towards marketplace conditions favorable to international collaboration and growth. Maybe I’m a fool, because this same song and dance has been declared numerous times in other former Soviet states over the years, but I believe him. Without the influence of Russia’s ruling class who stepped into wealth during privatization, perhaps Eastern Europe can finally move beyond the corruption and inefficiencies associated with former Soviet economies. Wise Investor Says “When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.” — Henry Ford 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 IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States (617) 337-3353