Could Be Worse

Silver Banana goes to... [image]( Market Snapshot On Wall Street, it’s not about how well you do—it’s about how well you do relative to expectations. Goldman reported a 43% drop in profit in the quarter and was up over 2% on the day. BoA’s EPS was down nearly 30% YoY, and it gained nearly 4%. Volatility isn’t going away, making gains and losses susceptible to sharp swings in the opposite direction. At the close, the Dow gained 1.12%, the Nasdaq rose 0.9%, and the S&P leaped 1.14%. WSO has partnered with Bloomberg Exam Prep to offer a whopping 100 ‘naners off regular GMAT prep plans. For this application cycle only, use their prep technology to crush the GMAT. Get the score you need to set your application apart. [Use this link]( Let’s get into it. Monkey Meme of the Day [image]() [Source]() Banana Bits - If you’re making minimum wage in NYC, you’d have to work [111-hour weeks]() to afford rent - [Discount clothing stores](=) are seeing huge demand as shoppers grapple with inflation - [Netflix is chillin’](=) after gaining double the amount of new subscribers as the Street expected in the quarter - Music City is about to get a brand-spankin’ [new football stadium]() Banana Brain Teaser Yesterday — Without fingers, I point. Without arms, I strike. Without feet, I run. What am I? A clock. Today — It’s 50 bananas off of our [Investment Banking Interview Course]() for the first 15 respondents. LFG! I am a fruit. I am tasty and provide lots of energy. You can also find me in a calendar. What am I? 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 Coping With Slowing Growth — On a national level, there haven’t been too many economic winners in the past few years. Emerging markets, as is usually the case, find themselves in the worst spot. A lack of infrastructure to get a handle on C-19 decimated many of these economies, and the effects of interest rate tightening will slow precious capital flows into those countries. The kings of the jungle, like the US, China, and the UK, have managed to eke out some growth, but the prospects for future growth appear dim. Some of the headwinds include: - A debt overhang after decades of credit binging - Unfavorable demographics, with too many older people to support and too few young workers to underpin economic productivity - A retreat from globalization in the wake of the supply chain mess driven by C-19 The latter point is already being felt in various industries, especially chips. The US and China have had a productive economic relationship making semiconductors for decades. But recently, Joey B and team put controls in place to protect chip-related IP, which will likely dent growth in that sector for both countries. The optimistic case is this could allow developing economies to take center stage, but that relies on a lot of assumptions. Africa has the demographics you’d want for a growing economy but is way short of the infrastructure required to attract foreign investment. When the pie isn’t growing, there tends to be more conflict over who gets what share. Hopefully, leaders can sort out a way to minimize the damage. The Best Way to Prep for the GMAT [image]() WSO has partnered with Bloomberg Exam Prep to offer a whopping 100 'nanners off regular GMAT prep plans. For this application cycle only, get the score you need to secure your seat at a T20 or even a Magnificent 7 MBA program. The admissions process is rigorous & highly competitive. Set yourself apart with a prep plan to master the entire exam curriculum. Leverage adaptive learning technology, premium content and one-on-one tutoring to earn your best score, guaranteed. [Use this link]() What's Ripe Carnival ($CCL) — After understandably plunging during the pandemic, Carnival was able to make up some lost ground, although it’s nowhere near its all-time high. It’s had a rough 2022 but was up sharply Tuesday on news that its Bermuda subsidiary is issuing over $1 billion in senior priority notes. The incoming cash from the offering will help alleviate its debt burden and give it some breathing room. $CCL was up 11.14% by the end of the day. Target ($TGT) — Fears of a sharp retail slowdown have been palpable in recent weeks, but Target is unfazed. CEO Brian Cornell said yesterday that the company is expecting a strong holiday season, despite a tough environment. A bullish analyst report from Jeffries also highlighted easing supply chain issues as a reason for optimism. $TGT was up 5.35% by the end of the day. What's Rotten Crude Oil WTI — China’s surprise decision to delay Q3 GDP data sent fear through the markets that the numbers could be really bad. A fear of slower Chinese demand, combined with higher US fuel production, sent Crude prices downward Tuesday. Throw chaos in the UK in there, and you have a recipe for lower prices. Crude ended the day down 2.57%. Ally Financial ($ALLY) — Ally has its Q3 earnings call Wednesday, and investors were dumping shares ahead of the report. It’s down 40% this year, and value investors are starting to lick their chops at an opportunity to get in at the ground floor. But the company has a lot of exposure to mortgages and other consumer loans, which could fall off a cliff in a bad recession. By the end of the day, $ALLY was down 4.65%. Thought Banana Hunting for Answers in Britain — It felt like the final nail in the coffin for Reaganomics happened in the past few weeks in the UK. The market rejected the tax-cut-to-spur-growth plan that didn’t show any way to pay for the resulting budget gaps, forcing the government to do an embarrassing U-turn on its policy. It’s not in the scope of this newsletter to get into the weeds of British politics, but Liz Truss’s reputation could be unfixable barely a month into her tenure. It’s now the responsibility of new finance chief Jeremy Hunt to sort out this sh*tstorm. - Hunt [pledged to]( “reverse virtually all the government’s planned tax cuts” - Britain faces decisions about its economy that will be “eye-wateringly difficult” - Broad-based energy subsidies are set to expire next April and will be replaced by a more targeted program There isn’t really a precedent for a major world economy doing a complete 180 on fiscal policy. British markets have calmed down some, but major questions are still lingering. It looks like the government might go after energy companies, who have been raking it in as the rest of the country has buckled under surging fuel prices. But the bottom line is there aren’t any good answers here, and Hunt will have to find the least-bad option. Wise Investor Says “Being rich is having money; being wealthy is having time.” — Margaret Bonnand 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