40-Year High CPI Print

Market Snapshot Futures showed a little bit of green yesterday morning, as crude moved slightly higher and the ten-year yield still hovered just below 3%. Oil closed the day above $95, and the yield curve was more than a touch inverted. Markets had a strange reaction to the CPI print, and it looks like a 100 bps rate hike is on the table for this upcoming FOMC meeting. At the bell, the Dow lost 0.67%, S&P shed 0.45%, and the Nasdaq dipped 0.15%. WSO’s DCF Modeling Course can get you up to speed on all things discounted cash flow that you will need to both survive and excel in finance. From the big picture, to fundamentals, to enterprise and equity valuation practice, you’ll take a deep dive into topics that are crucial for anyone who wants to work in Finance. [Master DCF Modeling Today]() Let’s get into it. Banana Bits - Certain skills are invaluable in finance, and we can help you [master them]() - Consumer inflation is en fuego, and here’s more “[peak inflation](=)” narrative to make us feel better about it - Google is planning to significantly [slow down its hiring]( - The average Amazon Prime member spends [$1400 a year](=) on amazon.com - Inflation is running hot, hotter than any other time in the [last 40 years]() Banana Brain Teaser Yesterday — What are two things you can’t eat for dinner? Breakfast and lunch. Today — For today’s BBT, we will slash a whopping 50 ‘naners off the sticker price of our [DCF Modeling Course]() for the first 10 correct respondents. Let’s try this one out: What is greater than God, more evil than the devil, the poor have it, the rich need it, and if you eat it, you’ll die? 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 40-Year High— Yesterday’s consumer price index report was important for a few reasons. The first reason is that it gives me at least one thing to complain about at cocktail parties. The second reason is that it tells us how well the Fed’s recent rate hikes and tightening have worked, or, in the case of my opinion this morning, not worked. Finally, another fantastically high CPI print tells me to buckle up and wait for further fat Fed rate hikes. An 8.8% year-over-year headline print was the consensus estimate. That’s majorly high. Some people argue that the real number we should care about is core inflation, a basket of goods in the CPI that excludes energy and food prices. This core number tends to be way less volatile because of the price swings in gas, electricity, and food – but I personally think that the headline number tells the whole story. This 9.1% is unworldly. Yesterday’s headline number was something out of Zimbabwe. It is frankly embarrassing for a modern economy to experience such extreme inflation. We are on the cusp of hyperinflation with a number like this. My jaw is on the floor. Yesterday we saw a more extreme yield curve inversion, and there were whispers of a 100 bps rate hike after this next FOMC meeting. This kind of macroeconomic environment makes guidance and tone during the upcoming earnings season that much more important. Investors will be looking to smell weakness when there is blood in the water. I’m on the edge of my seat, waiting for some of these calls. WSO DCF Modeling Course [image]( WSO’s DCF Modeling Course can get you up to speed on all things discounted cash flow that you will need to both survive and excel in finance. From the big picture, to fundamentals, to enterprise and equity valuation practice, you’ll take a deep dive into topics that are crucial for anyone who wants to work in Finance. Our robust curriculum will help you thrive in the most prestigious jobs on Wall Street. Book your course today. [Master DCF Modeling Today]() What's Ripe Twitter ($TWTR) — Shares of Twitter climbed yesterday after $TWTR filed a lawsuit formally against Elon yesterday, seeking to hold Musk to the aforementioned $44Bn deal to buy the company. While Musk claimed that Twitter broke its side of the deal, Twitter alleges that Musk is in the wrong. On the news, shares of $TWTR shot up 7.90%. Liberty TripAdvisor Holdings, Inc ($LTRPB) — Travel is en vogue right now. A strong dollar compared to the euro and two years of pent-up travel demand mean a lot for some of the traditional travel names. Liberty TripAdvisor Holdings, the parent company of the world’s largest travel platform, had a stellar day yesterday, rising 52.84%. There’s only one word to describe this move: explosive. Does it still have higher to go? What's Rotten Unity ($U) — Unity Software Inc has agreed to buy Ironsource. I’m assuming they put in a bid in order to further their business and because they thought it was a good thing. Well, the Street disagrees. Shares of $U were markedly lower. Yesterday at the close, $U was down 17.39%. Delta Airlines ($DAL) — Delta had a decent quarter; it just didn’t make the kind of bottom line number that the Street was expecting. Their earnings report showed a little bit of weakness. Schedule thrash, a mediocre balance sheet, and missing on their expected EPS, Delta’s Wednesday was hot garbage. Their CEO affirmed that demand was YUGE, but that didn’t assuage investor contempt for the travel name. At the close, $DAL was down 4.47%. Thought Banana Travel Boom Continues — After yesterday’s piece on strong dollar economics, you already know that European travel has gotten a lot cheaper if your bank account is in greenbacks and not euros. This is even more incentive for Americans to buy that once-in-a-lifetime trip that they’ve been waiting two years to book. Airlines of late have struggled. It’s been all over the news. Flight delays, cancellations, poor customer service. Fortunately, the mask mandate has been gone for a few months now. Otherwise, we would have fist fights with flight attendants to add to that list. The airlines are spread thin, including the major US carriers Delta, American, and United. Staffing shortages have compounded routine operating challenges like bad weather and scheduling challenges, putting the airlines squarely in the court of public opinion as well as the crosshairs of the Department of Transportation. As recently as last month, Mayor Pete compelled airline CEOs to meet and discuss operational issues. He urged airlines to ‘be sure’ they can meet the schedules they have promised to consumers. Whatever that means. Delta Airlines was the first of the major travel brands to report earnings from this most recent quarter. Even after being publicly chastised by Mayor Pete and every news program in America, Delta has experienced an increase in demand for both business and leisure travel. Business travel is making a comeback. It turns out that reading slides to your team from another time zone with your cameras off and your team on mute, except for the guy who is a loud breather, isn’t a great way to collaborate sometimes. Delta saw a 25% surge from the first quarter of this year in business travel, up to 80% of pre-C19 levels. Leisure travel is selling like gangbusters. Revenue for domestic travel is up 3% compared to 2019 levels even though Delta’s capacity is a mere 85% compared to 3 years ago. These numbers sound promising, but they don’t paint the whole picture. I won’t read too much into them until I hear from the other major airlines as well as the Hiltons and Marriotts of the world. I hear a lot of anecdotes about travel and pent-up demand for it; hopefully, they turn out to be true. Wise Investor Says “Long-term bonds can be almost as volatile as stocks. They have their own corrections..” — Peter Lynch 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. 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