End to a Rough Quarter

Market Snapshot Futures were flat as markets attempted to put something together on the second to last trading day of the quarter. Markets opened with a slight pop, and oil tagged along back up to almost $114 right out the gate. Oil closed just shy of $110, while ETH and BTC were both relatively flat. At closing, the Dow was up 0.27%, the S&P was down 0.07%, and the Nasdaq lost 0.03%. Sometimes some stellar advice from someone who has walked in your shoes can make all the difference. Try our [WSO Mentorship Program](; we will match you to a seasoned pro, typically in 48 hours, who will dedicate time towards tailored, focused 1v1 mentoring to set you up for success. Let’s get into it. Banana Bits - [Autopilot](=) not on autopilot? Tesla cutting jobs, closing another California facility - [Clean Coal](? In energy-starved Europe, attempts to sever ties with Russia come with secondary effects - Sometimes all you need to boost your career is some [stellar advice]( - The news you’ve been waiting all year to hear: 4th of July BBQ will [cost 17% more]() this year, a real kick in the wallet - These are the robots you [might not need]( Banana Brain Teaser Yesterday — You see a boat filled with people. You look again, but this time you don’t see a single person on the boat. Why? It was a couples cruise. Today — For today’s BBT, we will cut 20 bananas off the price of a [1-hour mentoring session]( for the first ten correct answers. Let’s give this a crack: What is exactly your size in terms of height and stature, but doesn’t weigh anything? 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 Jobs Market Cooling— A hot jobs market is awesome if you’re in the marketplace for a new gig. However, even Daddy JPow knows that an ultra-tight labor market is bad for the economy long term: it introduces inflationary pressures into the wage growth equation. For the last two years, workers have increasingly gained leverage in the search for new employers. It sure felt that those handing in the resumes had most, if not all, of the bargaining power. In an economy with literally millions of open jobs, even for knowledge workers like engineers, data science professionals, and technologists, you can understand why this would be so. Those with the right skills have been in demand, and education and training sources cannot produce quality candidates fast enough. This era appears to be beginning to come to a close. With increasing unemployment, initial claims as well as elevated sustained claims as well as plunging consumer sentiment, the data is starting to show some cracks in the hot labor market. One factor that might be driving some of this labor thrash is psychology: employers are fearing a pending recession or at least a more uncertain future operating environment for their business, and they have begun to scale back job postings as well as new hires. In terms of the chicken or the egg, it would appear that those paying the salaries have started to pump the brakes. While the next Labor Department Jobs Report isn’t due out until late July, a lot can change between now and then. Some sort of wacky jobs reversal, i.e., a return to peak idiocracy of hiring booms, could have significant impacts on the Fed’s next FOMC meeting. I would argue that we aren’t likely to see another 75 bps gut punch, but if the jobs market gets into a tizzy again, I wouldn’t take it off the table. Only time will tell; there’s a balance here because a tight labor market is great for your employment opportunities, but as you’ve probably experienced, it has turned out to be bad for your portfolios. WSO Mentorship Program [image](=) Sometimes the difference between success and failure lies in experience. WSO Mentorship Program is an opportunity to learn from the experiences of professionals who have been in your shoes. Try our [WSO Mentorship Program](; we quickly match you to an industry pro, usually in 48-72 hrs, based on your preferences and inputs from a detailed questionnaire. Our mentors have proven track records from across the finance industry. Let our experts help you help yourself. What's Ripe General Mills ($GIS) — Here’s a pandemic-followed-by-recession name for you. While cheerios aren’t as sexy as cloud computing, soaring profits, and a fat dividend increase are. Shares of $GIS ripped yesterday, closing up 6.35%. Monster Beverage ($MNST) — The parent company for the beverage that I drink every night as I pull all-nighters to write this bad boy saw some positive gains yesterday. On basically no news, shares were up 2.80%. Not a bad pop on a flat day for markets in general. What's Rotten Bath and Body Works ($BBWI) — Bath and Body Works was downgraded yesterday. It has some definite downside risk entering a recession, so investors are afraid of that potential pullback. Aside from the floating petri dishes, $BBWI was the biggest loser in the S&P. Its shares retreated 8.97%. Energy ($XLE) — Energy experienced a brief pullback yesterday. Names like Valero, Devon, Marathon, and others all lost some ground during the last trading session. With oil prices slumping a hair, it’s only logical that energy names would slump too. The S&P Energy ETF $XLE was down 3.48% yesterday. Thought Banana Well Drying Up — As more and more companies brace for the impact of a potential hard landing and rapidly increasing cost of capital, it’s hard to believe that early funding and VC dollars for more or less low-readiness business ideas will continue at current levels. Looking at you, Cannabis, Web3.0, DeFi, and other businesses that are on the bleeding edge of innovation. In a funding-constrained environment, the future of investment into these types of businesses is sus, fr fr. [image] However easy it has been to yolo our bananas into these budding businesses, it will be that much easier to watch their funding streams turned off. Think about the SPAC market as well as the general IPO deal flow this calendar year compared to the 18 months leading up to the current market correction from all-time highs. What once seemed like a daily occurrence is now like seeing a unicorn: a big, highly publicized IPO is not as common as it once was. The macro environment affects the readiness of these businesses and their desire to put their shares into public markets. These types of deals are influenced by the trends in the economy; a great economy means that investors will demand increased cash flows. At the same time, as interest rates change, so do discount rates and expected IRRs. In an upward-trending economy, this is gravy. Growth is the name of the game when everyone is flush with cash, and the well is quite liquid. During a pullback or even a recession, the opposite is true. Companies will tend to put off IPOs and seek other financing options to raise cash. Their demands for cash are affected by growth pressures as well as other external factors. These factors tend to include market trends, volatility, production or profits, and of course, psychology and investor sentiment. If you thought only software companies have fallen out of grace and you’re still invested in weed, magic internet money, or speculative internet names, it might be a good time to consider downside protection or a shakeup in your portfolio. Not to say that these names aren’t the future, but it’s likely that you’re going to experience moves lower before you experience any of that booming growth that the Gary V’s of the world are promising for these types of businesses. In any case, the effects of interest rates and macro headwinds on capital raising schema are worth considering. While it’s not something your typical Robinhood trader is thinking about, you can make it to at least the junior varsity level if you try and consider the way the wind is blowing and how it will affect valuations in the coming months. Wise Investor Says “Everyone told me it was a really stupid idea to start my own hedge fund right out of business school. That’s how I knew that it was a good idea.” — Bill Ackman, Pershing Capital 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