Crisis Averted... For Now

With literally minutes to spare, Republicans and Democrats set aside their differences for the good of the people and averted a shutdown. [The Daily Peel... ]() October 2, 2023 | Peel #554 Silver banana goes to... [CapLinked. ]( In this issue of the Peel: - The market suffered its worst quarterly loss in over a year as it battled surging treasury yields and a potential government shutdown. - Video gamers are putting their money where their mouths are and influencing change within Corporate America. - With literally minutes to spare, Republicans and Democrats set aside their differences for the good of the people and averted a shutdown. Market Snapshot Happy Monday, Apes. Can you believe we’ve already made it through three-quarters of the year? That went by fast. Q4 promises to be nothing short of entertaining as we contend with another potential government shutdown in November, Jay Powell swinging his money printing pendulum, surging bond yields, and more labor strikes on the horizon, just to name a few. But before we mentally prepare ourselves for all of that action, let’s take a step back to look at what the market has given us so far. Following stocks last week felt like watching a rerun of Rocky Balboa in the ring getting bruised and battered by Apollo Creed. However, unlike Rocky, who valiantly came back to win the title despite all odds being against him, the market just kind of… gave up. Unlike Rocky’s opponent, who was the formidable, charismatic, heavy-weight champion of the world, the market is losing its battle to none other than Jay Powell, the 70-year-old, pragmatic, mild-mannered economist who just so happens to control the direction of interest rates. The stock market suffered its worst quarterly loss since September of last year, largely driven by treasury yields surging to highs not seen since 2007. It’s also experiencing a hawkish Fed posture and a looming government shutdown, which was narrowly averted. Let’s get into it. A VDR Designed for Power Moves [image]( When it comes to closing deals, we all know that the major action happens outside of your data room. And this is exactly why CapLinked’s VDR is designed for you to spend as little time in it as possible. Simple permissioning takes the tedium out of getting decision-makers into the data room. Advanced Q&A functionality means you don’t have to spend hours answering the same due diligence questions for multiple stakeholders. An industry-leading activity dashboard reveals buyer intent, eliminating the guesswork and helping you close deals faster. Instead of losing hours setting up and managing your data room, you can spend time on what really matters — getting a leg up on the competition, sharpening your strategy, and winning business. CapLinked’s data room is fine-tuned to help you close deals faster. And to prove it, they’re letting you take some of the fastest cars in the world for a spin for the weekend. Yes, really. [Here’s how to claim your keys.](=) Banana Bits - Think twice before sending that WhatsApp message because chances are, [the SEC is watching.]() - That’s a wrap for BlockFi. The high-flying digital asset lender founded during the pandemic [received approval for its bankruptcy plan and will repay customers.]( - In one of the most exciting and simultaneously scary headlines of all time, [ChatGPT is getting an upgrade]( that will allow it to “see, hear and speak.” - Just a reminder that when you’re all out of leverage, complaining actually works. [Delta’s CEO admitted it went too far with SkyMiles]( changes and promised to roll some back. Macro Monkey Says Long Live USA Forget about Rome; The American Empire is the most popular show right now, containing more flair and drama than any soap opera you could imagine. For what seems like the millionth time this year, the government got their sh*t together just in time to narrowly pass a bill and avoid a government shutdown. Burning the midnight oil has become far too common for Americans. On the last round, Biden & Co signed a bill that funded the government until September 30. Wait, wasn’t that the other day? Yes, and we will all be back here again saying the same thing in 45 days when the stopgap funding runs out again. Since we haven’t had an actual shutdown since 2018, let’s go over how our lives would have changed had the short-term bill not passed. "... nonessential services will either completely or partially shut down ..." Pretty much all federal employees, whether they are furloughed or not, will miss out on paychecks during a shutdown. Remember when the TSA had to work for weeks with no pay? They were more cranky than usual, and that’s a scary sight! Interestingly enough, members of Congress still get paid. Additionally, nonessential services will either completely or partially shut down, which includes the SEC for all of you mischievous financiers out there. Note: The Daily Peel does not endorse or condone illegal activity in any form. But that’s all theoretical because we avoided a closure, all thanks to the heroic efforts of House Speaker Kevin McCarthy, who was cheered and praised for saving the day. "... the stock market generally doesn’t react during government shutdowns ..." Wrong! He isn’t exactly the most liked guy in his party, some of whom are actively trying to remove him from office for working with the enemy on the funding bill. Told you, TV writers have nothing on the daily gong-show in Congress. Based on historical data, the stock market generally doesn’t react during government shutdowns, which speaks volumes about how seriously we take the government. However, part of this month’s 5% decline in the S&P was at least partially attributed to fears of a shutdown, among other things. It will be interesting to see the initial impact of the announcement on stocks. Now that the bill has passed, we can finally stop talking about it for a few weeks. But be ready to be right back here in November for another round! What's Ripe Nike (NKE) ↑ 6.71% ↑ - Even at the ripe old age of 85, Phil Knight is letting investors know he’s not going down without a fight. - After some struggles selling shoes over the past year, Nike surprised the street with a reassuring earnings outlook. They reported a drop in inventories, highlighting that demand is increasing for goods that they previously had trouble selling. - While revenue in China came in below expectations on a tough consumer backdrop, the company tightened up the budget and reported stronger gross margins, leading to a higher bottom line. Walgreens Boots Alliance (WBA) ↑ 6.41% ↑ - Before you say anything, I’m here to tell you that, no, your weekly trip to Walgreens for toilet paper, Advil, and Tide pods is probably not the reason the stock was up. Though I’m sure it doesn’t hurt, so keep it up! - The story here is much more “GOT” or “Succession-esque.” Some private info leaked that the retail chain is potentially looking to hire Tim Wentworth, the former CEO of healthcare firm Cigna. This comes after former CEO Rosalind Brewer stepped down after two short years. - Brewer’s attempt to make Walgreens a bigger player in the healthcare space included purchasing a stake in VillageMD and putting primary care centers in hundreds of Walgreens stores. - If the company were to hire Wentworth, it would be getting a healthcare veteran as it looks to broaden its influence against the likes of Amazon and Walmart. What's Rotten The Duckhorn Portfolio (NAPA) ↓ 7.73% ↓ - Now might be a good time to stock up on some quality Napa Valley wine bottles as the company is having internal issues. - Duckhorn shares fell the most on an intraday basis in the year as the winemaker announced that CEO Alex Ryan is moving on to greener pastures. As a parting gift, Ryan also blessed investors with news that 2024 sales and profit numbers will fall very short of expectations. How considerate! - Duckhorn will make a second attempt at a new life with interim CEO Deirdre Mahlan, who has 20 years of experience in leadership at Diageo, before finding a permanent replacement. Carnival Corp (CCL) ↓ 4.97% ↓ - Carnival Cruise Line must have hit some of those rocky hurricane waters last week based on its stock performance. *Pats self on the back for that pun.* - Although CCL reported a profit for the first time since before the pandemic, the company warned investors not to cheer too much as this will likely be temporary. They expect rising fuel costs and currency exchange rates to negatively impact earnings. - Gas prices are expected to spike 20% in the upcoming quarter. That, along with currency rates, could lead to $130 million in losses, according to CEO Josh Weinstein. Thought Banana A Tale of Two Gaming Platforms As kids, playing video games was a harmless pastime, transporting us from reality into a fantasy world. It was a time when we didn’t know or care about fancy words like “stonks” or “Diamond hands.” Well, times have changed, and now hardcore video gamers seem to be the ones most deeply invested in the management and executive boards of the companies behind their favorite games. Ryan Cohen was appointed CEO of GameStop the other day, taking over for the guy who took over for the other guy, who took over for the first guy. Seriously, the company has had more CEOs in the last few years than the Jets have had starting quarterbacks. When the announcement was made, gamers/retail traders cheered for joy. Even better, Cohen announced that he would not be taking a salary as CEO. A man of the people! Ok, to be fair, his investment in Gamestonk is worth several billion dollars, so taking a salary to turn around a failing company would really be a slap in the face. "When the announcement was made, gamers/retail traders cheered for joy." While some Wall Street analysts have criticized the move, loyal gamers have stuck with the company through thick and thin. Despite Cohen’s rocky track record, they are now hopeful that Gamestop, which is down 80% from its all-time high, can stage a comeback. Cohen also has large investments in retailers Bed Bath & Beyond (we all know how that’s going) and Nordstrom. Still, retail traders are pounding the table after an internal memo in which he stated, “I’m not getting paid, so I’m either going down with the ship or turning the company around. I much prefer the latter.” I'm not going to lie; that’s as good of a hype-up speech as I’ve ever heard. I’m convinced! On the other side of the aisle, there were also cheers from PlayStation fans. Not because of some hotshot new CEO announcement but rather because the big man in charge is stepping down. Ouch. Jim Ryan, former CEO of PlayStation, was apparently despised and finally got the message to go where you’re celebrated instead of tolerated. There was a barrage of celebratory gifs and memes that coincided with his retirement announcement. "... that is definitely not the right thing to say to a bunch of hardcore gamers ..." One of the more controversial moments of his tenure was when he said that older PlayStation 1 and PlayStation 2 games looked “ancient” and questioned why anybody would ever play them. First of all, everybody knows that in 2023, the inoffensive word is “vintage.” Secondly, that is definitely not the right thing to say to a bunch of hardcore gamers who love their old-school titles. That would be like telling Investment Banking monkeys (analysts) that they should use Excel on Mac rather than PC because it’s ancient. Blasphemous. He also bragged that people had never played video games in the Middle East before PlayStation, which is one of the most hilarious things to say without researching beforehand. Okay, back to the original point. These gamers not only have an opinion, but they also have the money to impact the bottom line for these companies. It will be interesting to see what kind of changes they can enact. If I were a CEO, I definitely would not try to take this group head-on. The big question: How will both CEOs perform in their newly appointed seats? Can we anticipate an overperformance or underperformance against analyst expectations for the next quarter? Is GameStop or Sony worth taking a position for our portfolios? Banana Brain Teaser Friday — Half a crate of eggs holds half a dozen cartons, each of which holds half a dozen eggs. The truck just delivered a crate and a half. How many eggs did the truck deliver? Answer 108 eggs Today — There are two pixies, an old one and a young one. The old one is 120 years old, and the young one is 32 years old. How old will the old pixie be when he is exactly twice as old as the young one? Shoot us your guesses at vyomesh@wallstreetoasis.com Wise Investor Says “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game” — Benjamin Graham How would you rate today’s 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