Is the Sky Falling?

Market Snapshot Futures on the first morning of the trading week pointed lower, while oil was trading above $118/barrel. The 10-year yield climbed by more than 10 bps to 2.85%. When the closing bell rang out, the Dow had shed 0.67%, the S&P had given back 0.63%, and the Nasdaq had lost 0.41%. Oil closed above $115/barrel, and ETH and BTC are still hovering around 2k and 30k, respectively. Certain skills are indispensable in Finance: using Excel without a mouse, a thorough understanding of the principles of financial statements, and PowerPoint Ninja skills to slay any pitch deck. Set yourself up for success and sharpen your skills with our [WSO Foundations Package](=). Let’s get into it. Banana Bits - So Brett Favre is in the news again for an [alleged welfare scam]( - Any iPhone users in the crowd? Get ready for [big changes]( - Work with us to sharpen the skills you need to build your [finance foundation](=) - The [Supreme Court]() blocked a Texas law that restricted Big Tech’s abilities to moderate content on their platforms - [Deshaun Watson]() is in the news again, and it’s the same ol’ story Banana Brain Teaser The answer to yesterday’s Brain Teaser was that both ‘t’ and a peninsula are in the middle of water. For today’s first 15 correct respondents, we will unlock our WSO Foundations Package for 100 bananas off the sticker price. Good luck! If you throw a red stone into the Black Sea, what does it become? 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 Global Recession? — Are we about to plunge into a worldwide recession? Is the sky falling? Will no one do something to save us? Well, economists don’t really think that the global economy is going to contract. When you think about marginal returns in emerging markets, this makes so much sense: the benefit of another dollar of consumption or investment in some of the growing parts of the world is just incredible. What we might see is a US and Eurozone recession, though. Interest rates are going to have to rise in the EU just like the Fed is doing in the states. Add in the unlikelihood of a soft landing in The States, and there’s a recipe for a recession in both major Western economic zones. This could mean high inflation and low growth, i.e., stagflation, for at least the next calendar year or so. How might this affect your portfolios? Well, it’s pretty unlikely that this type of recession looks like the 2008 or any other economic downturn that has used the word “great” to describe it. Growth names, especially pre-profitability companies, will see their P/Es squeezed. Valuation compression will continue in its current trend, and liquidity will be harder to come by. VC money will dry up, and investment, in general, might slow as cash is not as trashy in a recession as it is during a once-in-a-lifetime bull run, as we saw in the summer of 2020. The challenges that popped up in early 2020, like supply chain issues and rising commodities prices, are still here, and some of them might be getting worse. Does all this mean your portfolio will go into a free fall? I wouldn’t bet on that, either. But, as always, I’m not a betting man, and this isn’t financial advice. Build your Foundation [image](=) Certain skills are indispensable in Finance. Financial statements are the backbone of fundamental analysis, and Excel and PowerPoint are their love languages. If you want to be successful in this world, knowing the ins and outs of these three foundational topics will make you dangerous in any shop, from boutique to BB. Dive into more than 100 lessons put together by experienced finance professionals that will help you sharpen the skills you need to [build your finance foundation](=). What's Ripe Amazon ($AMZN) — It’s been a minute since we’ve had the pleasure of writing about the world’s biggest retailer in this section of the Peel. Their stock is battered and nearly broken after a fat earnings miss a few weeks ago. Yesterday, however, was like the Amazon of old: shares ripped, ending the day up 4.40%. The reason? Its stock split was approved, and more irrational degen traders in the Wall Street Casino will likely send it higher both into and after the 20-1 split. Salesforce ($CRM) — After a lackluster Tuesday trading session, shares of $CRM were up around 7.40% after hours after Salesforce pushed out its earnings report and updated guidance. Salesforce posted a beat and raise, upping their guidance for this fiscal year and beating on both the top and bottom lines. Honestly didn’t see this one coming. What's Rotten Splunk ($SPLK) — Well, after topping estimates in its earnings last week, shares of $SPLK lost 5.47% yesterday. There’s a debate out there: is Splunk a competitor to Palantir? If you’re looking for stocks that have been getting their a$$es kicked, they’re on the same playing field. Illumina ($ILMN) — Shares of Illumina were down 7.20% yesterday as a rival startup landed a $600mn VC deal. Illumina is down 41% in the last year, which isn’t actually that bad for a biotech firm. The industry has seen HALF of its market cap demolished in the same timeframe. After this pullback, it could be time to BTFD. Thought Banana What’s on Sale? — After an 8-week losing streak, markets finally turned themselves around last week. If you’ve ever lived in a desert, you’ve experienced a drought. That’s basically what we all just lived through. All of your favorite Big Tech names are beaten down. Amazon, Microsoft, Meta, Google, Tesla, Nvidia, AMD… and the list goes on. These are legitimate powerhouse companies, with leadership that is charged with steering huge organizations that have global reach and influence. I’m not declaring from on high that all of these names are in this boat, but 100 years from now, some of these names may still be around, and those names will have the type of generational ring to them like General Electric, Ford, and Coca-Cola have today. I’m not saying that the market pullback is over or that the falling knife is no longer falling. I am, however, saying that if your time horizon is right, you might not need to perfectly time the bottom to make a buck or two. Some of these names haven’t traded at these levels in years. Buying at all-time highs is not awesome. (Don’t ask me how I know.) Historically, after a week like last week, markets have ripped in the medium term. But these are stonks, not tarot cards. Past performance is absolutely not indicative of future returns. All of that being said, this could be a great buying opportunity for all of you dollar-cost-averagers in the crowd. Good luck, Apes. Happy Investing. Wise Investor Says “The biggest risk of all is not taking one.” — Mellody Hobson 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