On Monday, AI researcher and Public Benefit Corp Anthropic announced a $1.25bn investment from Amazon [The Daily Peel... ]( September 26, 2023 | Peel #550 Silver banana goes to... [CapLinked. ]( In this issue of the Peel: - Credit spreads are on the decline in the U.S. and rising in Europe, despite the fact that recession odds are higher in the U.S. than in Europe.
- Williams-Sonoma and Tilray Brands had a ripe day, while Alcoa and WeWork ended the day in the red amidst unraveling events.
- On Monday, AI researcher and Public Benefit Corp Anthropic announced a $1.25bn investment from Amazon. Market Snapshot Happy Tuesday, apes. Itâs been a while since we started off a week this green, huh? And no, I don't mean green with jealousy of yourself last Friday. The only green we need is rising stock prices, and thatâs what we got. Equity markets largely rose in the U.S. coming off a week in which a lot of uncertainty was wiped away. Even if the news wasnât ideal, the bridge has been crossed, and the Nasdaq and Russell 2kâs 0.45% gains were here to party. Utilities, energy, and staples (aka, the nerdy âsafeâ sectors) were the only ones down for the day while the rest of us were having an actual good time. Treasury yields were only higher. In the meantime, U.S. 10-year yields continue to rise, which, as youâll see below, is causing a lot of head-scratching for global economists. The 2-year yield and just about every other tenor was also higher, with that key maturity re-approaching 5.15%. USD has been hitting the gym as well, seeing nothing but gains compared to the rest of the day. Letâs get into it. Open a CapLinked Enterprise Plan & Win a Supercar for the Weekend [image](=) CapLinkedâs data room is fine-tuned to close deals faster, and they want you to shift into high gear with them. Thatâs why from now until the end of October, every Enterprise Plan opened comes with keys to the supercar of your dreams for the weekend.* What makes CapLinkedâs Enterprise Data Rooms the choice of dealmakers in the fast lane? - Cutting-edge activity tracking gives you the insights you need to craft personalized, hyper-efficient follow-ups with targets.
- Advanced Q&A functionality puts the Q&A stage of due diligence on autopilot.
- Simple permissioning tools get decision-makers into your data room as quickly as possible.
- Turbocharged upload speeds & 99.9 Uptime SLA. Ready to claim your ride? [Open an Enterprise Plan today.](=) *Terms and conditions apply. [Contact CapLinked for details.](mailto:sales@caplinked.com) Macro Monkey Says Euro-cession vs. Ameri-cession Iâm going to go out on a limb here and assert that absolutely 0 people, regardless of their continent, are hoping & praying for a recession. That said, markets are saying otherwise, and what theyâre saying isnât making a whole lot of sense. PE giant Apollo Global Managementâs Chief Economist, Dr. Torsten Sløk, for lack of a better term, is a genius in many regards. Heâs one of those economists who actually seems to recognize the flaws in this âscienceâ and has a great way of using them to his advantage. For example, in Apolloâs in-house publishing room, Apollo Academy, Sløk recently dropped [this gem](). Get excited, apes, because itâs time to talk credit spreads. "... absolutely 0 people ... are hoping & praying for a recession." âCCC Spreads,â or high yield (aka âjunkâ) spreads, refers to the difference between the yield on lower-rated and higher-rated corporate bonds in a given market. As yield increases along with risk, lower-rated bonds carry higher yields. And, when the spread between these higher-yielding bonds and their safer counterparts narrows, itâs a sign of a lack of serious financial stress. When itâs increasing, however, look out below. Thatâs the âsmart moneyâ bond market telling you there may be something wrong as a âflight to safetyâ pulls down yields in safer assets, like U.S. treasuries. Now that we got that out of the way, look at this: [image] [Source]() Now, look at this: [image] [Source]() The Tale of Two Cities here, as Sløk points out, is that 1) credit spreads are on the decline in the U.S. and rising in Europe, while 2) recession odds are higher in the U.S. than in Europe. This, ladies and gentlemen, does not make senseâaccording to economic theory. "This, ladies and gentlemen, does not make senseâaccording to economic theory." As the smart economist that he is, Apolloâs top guy didnât offer an explanation. Instead, he only sought to reframe the thinking of credit investors to the question of whether credit fundamentals or pure yield levels were being prioritized in thought. Much like stock market fundamentals vs. that of price momentum, bonds can suffer the same symptoms. Despite being the âsmart money,â the flight to safety that may have been expected in U.S. treasuries hasnât occurred, driving the lack of a spread in the U.S. For the reasons driving the lack of a flight to safety to U.S. debt, you might as well ask the stars, Santa Claus, or your congressman. The point is that something is disconnected, breaking the usual correlation, at least for the time being. Weâll see if itâs a mean reversion or yet another symptom of JPowâs âhigher for longerâ line. At this point, Iâm just gonna get that tattooed on me because, like rates, isnât that just how weâre all tryna be? What's Ripe Williams-Sonoma (WSM) â 11.62% â - Whatâs one thing that rates at 5.50% still canât kill? Id**ts.
- For real. Shares in the now $10bn furnishing companyâs stock soared as morons on Twitter (X?) confused the âcashtagâ (cringe) $WSMâmeant for the Wall Street Memes tokenâfor Williams-Sonoma, for obvious reasonsâ¦
- Having the same ticker as some sh*tcoin is apparently still a valid investment thesis. Williams-Sonoma had no news for the day, but apparently, there are still enough brain cells in Cryptoland to drive embarrassing moves like this.
- To be fair, the stock is at a ~18% short interest, meaning an uptick couldâve triggered a short squeeze. Either way⦠câmon apes. I hope you at least made money. Tilray Brands (TLRY) â 7.08% â - Weed is still cool. On Monday, cannabis and newly minted craft beer maker Tilray Brands roared on continued optimism around getting stoned.
- Like above, social media has been a non-ignorable factor (unfortunately) here. Reddit is abuzz with names like Tilray and other pot stocks like Canopy Growth (+12.26%).
- Moreover, Tilray CEO Irwin Simon hyped up the companyâs recent alcoholic beverage acquisitions as âsynergisticâ (gross) with the cannabis-infused beverage market, which is expected to be one of the largest parts of this market when and if it actually does exist.
- Bottoms up, and they sure hope so for their stock prices. What's Rotten Alcoa (AA) â 6.07% â - For a 137-year-old company, hitting 2-year-lows on your stock price canât be all that bad, in hindsight. But, it also sure canât feel good in the moment.
- Unfortunately, thatâs the reality for steelmaker Alcoa. Shares plunged as the firm shocked the Street with an unexpectedly timed CEO switch-up.
- Retiring Chief Roy Harvey had that dawg in him, hence why investors are sad to see him go. While theyâre overall pleased with new CEO William Oplingerâs appointment, with B Riley calling him the âmost well-positionedâ for the role, the out-of-nowhere-ness of the move means uncertainty, and we all know how much investors hate the U word⦠WeWork (We) â 5.50% â - Nearly two years and two documentaries following the horrendous IPO of this fundamentals-forsaken stock, WeWork is still kicking. But based on yesterdayâs move, traders arenât sure why.
- While there wasnât any especially bad news, WeWork has been really quiet since telling landlords it would have to renegotiate most leases. Coworking apparently isnât all itâs cracked up to be when rates hit 5.50%. Thought Banana Financial Infidelity Cheating in a relationship isnât cool, and generally, itâs even worse in business (is that actually true?) Anyway, there appears to be some major corporate adultery occurring in the land of megacap tech and AI this week. On Monday, AI researcher and Public Benefit Corp Anthropic announced a $1.25bn investment from Amazon, with the option to up that to $4bn over time. "... Anthropic announced a $1.25bn investment from Amazon ..." The investment grants Amazon a minority stake in the company that, much like OpenAI, was founded on the idea of not being solely focused on making a sh*tton in the AI space. With Amazonâs hands in it now, weâll see how that goes⦠Anthropic has been a little more under the radar than OpenAI, given that it was founded later and by former employees of the Microsoft-backed ChatGPT owner. But the younger firm has its own bot, named Claude, and a newly-released Claude 2.0, gearing up for battle against the king. Over the next two years, Anthropic seeks to develop yet another iteration of this tech that many expect to be called âClaude-Next.â According to TechCrunch, they plan for that model to be 10x more powerful than todayâs most powerful AI systems. Google, who also owns a ton of Anthropic, has been assisting in this endeavor as well. Between both Amazon and Google, weâre still not even at half of Microsoftâs latest $10bn (with a B) investment in OpenAI. But the battle is on. "... Anthropic seeks to develop yet another iteration of this tech ..." Iâm just glad the whole idea of keeping the worldâs most powerful tools outside the hands of giant corporations is working out well. Comforting, huh? The big question: Will Anthropic succeed enough to actually rival OpenAI? Is big tech going to dominate AI and use it to molest our privacy even more? Should we be asking âwhenâ instead? Banana Brain Teaser Yesterday â If you have me, you want to share me.
But if you share me, I will no longer exist. What am I? Answer A Secret Today â When filling an empty barrel, which happens first? A) 2/3 full
B) 1/4 empty
C) 1/2 full
D) 3/4 empty Shoot us your guesses at vyomesh@wallstreetoasis.com Wise Investor Says âBuyingâs easier, sellingâs hard â Itâs hard to know when to get out.â â Seth Klarman How would you rate todayâs Peel? [All the bananas]( [Decent]() [Rotten AF](=) Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? [Be smart like your friend.]() [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