When The Previews Are Too Good

Yesterday and on Wednesday, we received a slew of data, including the ADP National Employment Report, jobless claims, productivity, JOLTS [The Daily Peel... ]() November 3, 2023 | Peel #578 In this issue of the Peel: - Yesterday and on Wednesday, we received a slew of data, including the ADP National Employment Report, jobless claims, productivity, JOLTS, and much more. - Shopify and Eli Lilly had an absolute day for themselves, whereas Moderna and SolarEdge saw their stock decline for the day. - Live Nation reported earnings of $1.78/sh on $8.15bn in sales, leapfrogging both EPS estimates for $1.27/sh and revenue estimates for a nice $6.9bn in sales. Market Snapshot Happy Friday, apes. Nearly 1,000 companies have reported their earnings in the last 48 hours alone. Some were strong, others weak, but none as weak as our current mental capacities trying to keep up with all this. Don’t worry, as always, we got you. Amid the earnings hullabaloo of the last few days, equities have done nothing but continue their winning streak. All major U.S. indices were up once again on Thursday in response to those earnings as well as strong macro data, particularly the “dovish hold” conducted by the FOMC on Wednesday. Not only was every S&P sector up yesterday, but they were all up >1%, showcasing the breadth of the market’s newfound hope. Small caps led this time, however, with the Russell 2k’s 2.67% gain leading the way and confirming the breadth of recent moves higher. You know it’s a good day when the Dow’s +1.7% is the worst of the bunch. Meanwhile, treasury yields continued to decline for the most part, but more gradually yesterday. The 10-year was hovering around 4.68% by the end of the day, while the 2-year was trying its best to come back below 5% and hold there but still managed to move higher by the close of the session. For the U.S. Dollar’s part, it kept up its boring ways and stayed just above 106 by the DXY. Let’s get into it. Become an Excel Power User [image]() If you’re looking for a comprehensive live training session that covers everything on Excel modeling, from beginner to advanced, then you need to check out the [WSO Excel Master Bootcamp.]() You’ll learn from actual industry professionals who know the best practices and common pitfalls in financial modeling. You’ll also learn how to boost your efficiency, avoid errors, and present your work in the best light possible. By joining the WSO Excel Master Bootcamp, you’ll also get lifetime access to the WSO Excel Modeling Course. Don’t miss this chance to improve your skills and boost your resume. [Join us this Saturday, November 4th, 2023.]() Banana Bits - Well, that didn't take long at all. Hope you had the under on yesterday’s bet because former FTX “CEO” [Scum Bag-Fraud has been convicted]() for his crimes in the crypto “firm’s” collapse. - The world’s most valuable company beat on the top and bottom lines, but they can’t seem to escape a scary trend of declining sales. Have we reached peak [Apple](=)? - Is the UAW getting cocky? According to [this WSJ article](, they may take the momentum from this recent win and use it to poke the biggest bear in the auto world. - As earnings continue to roll in, few benefited as much as [Palantir](=) investors. - Now that jurors are officially in deliberation take this chance to look back at some of the heinous allegations against our boy [Scum Bag-Fraud](=) (I added this one earlier in the day but still fun to look through, lol). Macro Monkey Say The Previews Did you catch the typo at the top of today’s Peel? No? Well, we meant to say “Happy Jobs Day” instead of Happy Friday because screw having fun. The macro picture is all that matters. At 8:30 am later today (or 4-6 hours ago, based on when I assume most of you apes wake up), we’re gonna get the jobs report for the month of October. Get ready for those texts from Dad saying, “The U.S. economy added X number of jobs last month. Did you get one?” I just hope you have an answer for him (bc I sure don’t). Anyway, as of Thursday, we did already get plenty of labor market data that almost certainly evokes just as much disappointment and envy in your parents as today’s report will. "Yesterday and on Wednesday, we received a slew of data ..." Like watching trailers during the previews of a movie, let’s sit back and watch in awe and just assume it’s gonna be good. And this time, that “assume it’s gonna be good” part actually might turn out to be true. Yesterday and on Wednesday, we received a slew of data, including the ADP National Employment Report, jobless claims, productivity, JOLTS, and much more. The highlights include: - 113k private non-farm payrolls added, according to [ADP]( - 1.5 [job openings](=) remaining for every unemployed American - A strong 4.7% annualized increase in [productivity]( for the quarter - A 0.7% decrease in [unit labor costs](=) - A 4% nominal and 0.4% real increase in hourly earnings If that data was given to you on an Economics test and you were asked to evaluate the state of the economy, drawing a picture of someone doing a kegstand would be the only correct answer because it’s looking like a party. "Increasing wages and productivity also suggests a healthy labor market as workers are earning more while also producing more ..." If ADP’s jobs figure is at all close, this might be the glass slipper that fits just right, as it could suggest a solid balance of sustained labor demand without overheating. That’s ideal because it means you’ll (hopefully) keep or get a job, but it won’t motivate JPow too much to drop another interest rate nuke on the economy. Increasing wages and productivity also suggests a healthy labor market as workers are earning more while also producing more, a win for everyone involved. And the icing on the cake, continuing jobless claims maintained their level at historical lows without moving an inch from the four weeks ending September 30th at 210k. Now, with all this said, that by no means guarantees a good print on today’s nonfarm payrolls report. Last month, as an example, economists were expecting a print in the 150k-200k range, but the BLS dropped a 336k bomb on us, completely unexpected. As always, we’re just as susceptible to shocks in either direction this time around, too. Let’s just keep our fingers crossed for now. Or, more accurately, just ignore the inevitable texts from your dad. What's Ripe Shopify (SHOP) ↑ 22.36% ↑ - Turns out consumers haven’t just been strong. They’re taking HGH and getting full-on jacked, according to Shopify’s latest earnings report. Like the firm’s top competitor Amazon last week, they crushed it last quarter. - Sales growth boomed. Rising 25% to $1.7bn, this managed to beat aggressive expectations for $1.67bn while earnings of $0.24/sh demolished the $0.16/sh Wall Street was estimating. - Gross merchandise volume is booming, margins next quarter are supposed to be even better (we’ll see), and retailers are as “channel agnostic” as ever, meaning they don’t really care how products get sold as long as they do. - And Shopify sits in the perfect industry for that. Especially in an environment with a higher degree of uncertainty around macro prospects and global conflict, providing this turn-key solution to e-commerce has been a major W. Eli Lilly (LLY) ↑ 4.66% ↑ - Every King has their crown. And, since Eli Lilly is the official King of Big Pharma with a $550bn market cap, they must have a crown, right? - Indeed, they do, and they call it “Mounjaro.” Mounjaro is Eli Lilly’s entrant into the battle of diabetes/obesity drugs raging in healthcare right now, competing with Ozempic and Wegovy from Novo Nordisk, and demand for all three is absolutely skyrocketing. - That skyrocketing demand led Eli Lilly to be maybe the first company in 2023 to cut guidance but still get a boost on earnings day. Decades of addiction to Big Macs and burritos have fattened up the U.S. like a farmer to their pigs, but instead of the slaughterhouse, they’re being taken to the pharmacy, so it’s not exactly a shock to see demand as large as American waistlines. - On the back of Mounjaro and other drugs’ successes last quarter, Eli Lilly managed to deliver EPS of $0.10/sh on $9.5bn in sales, stepping on estimates for a $0.13/sh loss on $8.95bn in sales. What's Rotten Moderna (MRNA) ↓ 6.52% ↓ - Once a boon for Moderna stock, the company’s shares seem to trade inversely to overall public health. So, I guess we should all be pumped to see this thing fall… unless you’re a shareholder, of course. - Gone are the days of Moderna saving the world along with its fellow totally-not-corrupt Big Pharma firms like Pfizer. The firm reported earnings much to the disappointment of Wall Street, with the lack of C-19 vaccine demand driving the weakness. - Losing $9.53/sh vs. expected earnings of $1.53/sh wasn’t a great start, but that probably doesn’t matter as much because the two aren’t comparable in accounting terms. Revenue of $1.83bn did beat the $1.4bn expected, but that was still a horrific 45% off from Q3’22. SolarEdge (SEDG) ↓ 3.96% ↓ - Oh, you still rely on the sun for energy, warmth, and being able to see? Psh, it couldn’t be me, and it couldn’t be the rest of Wall Street either. - Turns out the sun is going on strike or something because SolarEdge and other solar providers fell right off their rockers on Thursday. The company’s earnings did the trick as weak demand for panels amid rising rates and rising costs such as [*checks notes*] literally everything else hampered demand. - To put it nicely, SolarEdge reported dogsh*t earnings of $0.55/sh on $725mn in sales, both fat swings and misses from expectations of $0.89/sh on $768mn in revenue. Not long ago, the firm gave us a warning that earnings were gonna be trash, but even the 30% fall observed then wasn’t enough. - Just for good measure, traders sent shares down another 4%. But maybe there’s a ray of sunshine or two waiting down the line. We’ll see. Thought Banana Earnings Spotlight: Live Nation Entertainment 581 U.S.-listed companies reported their earnings yesterday. That was in addition to the 414 reported on Wednesday, many coming after hours and not allowing the market to react until today. There were a lot of wild moves and prints, like Apple, Starbucks, Palantir, and many, many more, but none blew us away quite like Live Nation. Obviously, we’re gonna have more to come on Apple, but dammit, you’ll have to wait for Monday. I don’t make the rules, apes. Go yell at my boss and/or Tim Cook. Anyway, back to the matter at hand (provided that doesn’t get me fired), Live Nation absolutely blew away expectations for the quarter. Beyonce and a formerly little-known artist before meeting her new boyfriend Travis Kelce, named Taylor Swift, were the key growth drivers the company didn’t know they had. "Live Nation reported earnings of $1.78/sh on $8.15bn in sales ..." Live Nation reported earnings of $1.78/sh on $8.15bn in sales, leapfrogging both EPS estimates for $1.27/sh and revenue estimates for a nice $6.9bn in sales. Damn. Already in 2023, Live Nation has sold >140mn tickets worldwide, a 17% jump from the same point last year and 15% from 2022’s full-year total of 121mn. As the parent company to the King of ticket sales in the U.S., Ticketmaster, Live Nation wanted all the smoke in raising ticket prices when customers already hate the service almost as much as they hate not being able to get tickets to a concert easily. So, instead of crying about Ticketmaster and saying, “All my homies hate it,” or whatever nonsense is going on, you could’ve been part of the fun if you just bought shares. But oh well, we’ll get ‘em next time, right? Now, those ticket sales were absolutely dominated by tours from Beyonce and the aforementioned little-known artist, Taylor Swift. Many of these were joint sales for overlapping tour events, but other artists like Harry Styles, Billy Joel, the Red Hot Chili Peppers, and many more helped out as well. Still, all those ticket sales amounted to ~$833mn for Live Nation. The bulk of the firm’s revenue still comes from actual concert production. This includes fees for actually producing concerts in their given locations, along with merchandise sales and other smaller line items. "Now, those ticket sales were absolutely dominated by tours from Beyonce and the aforementioned little-known artist, Taylor Swift." After nearly collapsing in the wake of the pandemic back in 2020/21, Live Nation now finds itself right in the middle of a boom for live events, travel, and everything else we couldn’t do for way too long. But now, we’ll have to find out if that demand can actually stick around. I mean, once you’ve seen Beyonce for the first time, you’re not dying to go again… are you? The big question: Will the elevated demand for live entertainment continue long term and/or to a degree where Live Nation keeps up this level of performance? What other tours are in store in the near future? Banana Brain Teaser Yesterday — The day before yesterday, Suzie was nine years old. Next year, she will be twelve. How is this possible? Answer Her birthday is on December 31. If today is January 1, then the day before yesterday, she was nine. Yesterday she turned ten, this year she'll turn eleven and NEXT year she'll turn twelve! If you still don't get it, look at a calendar! Today — If a hospital has 360 doctors and nurses, and the ratio of doctors to nurses is 7 to 11, how many nurses are there? Shoot us your guesses at vyomesh@wallstreetoasis.com Wise Investor Says “The best investment on Earth is Earth.” — Louis Glickman 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. 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