The Space Race Is Officially On

Japan managed to complete a soft landing on the moon's surface. January 23, 2024 | Peel #631 Silver Banana goes to... [SRS Acquiom. ]( In this issue of the Peel: - ⬇️ The Leading Economic Index declined 21 times in a row. - 🛩 Spirit Airlines is squaring up with the DOJ, while AMD is losing steam. - 🌝 Japan managed to complete a soft landing on the moon's surface. Market Snapshot 📸 Banana Bits 🍌 - Risky companies are borrowing like they have [850 credit scores](=) - The richest man in the world managed to get the homies to [toss him another $500mn]() - More Boeing 737 planes are likely going [under the microscope as well]() - As the dropouts continue, Wall Street reluctantly [heads back to Trumpville]() Stay Friends With the Trends Into 2024 Past performance is no guarantee of future results, but it never hurts to know the trends—especially when they shift. The private M&A market saw its fair share of shifts in 2023, and SRS Acquiom was following them the whole way. As you can probably guess, SRS Acquiom will be spotlighting those shifts (and more) in their 2024 M&A Deal Terms Study. To tide you over until then, SRS Acquiom is offering an early glimpse of the most important trends of the past year and what they could mean to you and your clients in the year to come. Tracking more than 200 private-target deals, this briefing from SRS Acquiom includes information and insights no one else has. Closing consideration, indemnification provisions, termination fees, earnouts, carveouts, escrows, holdbacks—there’s a whole lot of trends packed into just two pages. It’s fast, it’s free, it’s definitely worth a download. [So download it now.]() Macro Monkey Says 🐒 Losing Economic Indicators Just like Jim Cramer’s take on the market, U.S. economic indicators have continued to do nothing but lose. Yet we keep chugging along, and unfortunately, Cramer does too. An index that almost no one paid any attention to just a few years ago is slowly stealing the hearts, minds, and rationality of investors. What is the LEI? The Leading Economic Index is, well, an index published monthly, comprised of 10 components that seek to provide insight into future economic conditions. Declines in the LEI signal deteriorating future conditions. And in December, the LEI declined again by 0.1%. It’s a small decline, but that marks the 21st drop in a row—and I promise this 21st is a lot less fun than yours was. In fact, that makes our current streak of declines the third longest on record. I’ll take a bronze medal, but it doesn’t seem too great when the chart looks like this: [Source](=) 21 in a row might sound bad, but non-colorblind apes out there will notice that the historic steep climbs in this index tend to coincide with an economic recession. And clearly, that’s not what we’re seeing now. Economists even say hitting this point could be a good sign. Kind of like how some equity indicators, like the RSI, for example, can show a stock as “overbought” when things are getting too good—the LEI can be interpreted as a contrarian signal. Taking a Step Back… Looking at the level along with the 6-month growth rate of the LEI, we can see the index is still technically in recession territory, according to the Conference Board: [Source]() Once again, this could be an instance where the direction is more important than the level itself. Moving in the right direction is an important first step, and despite the recessionary signal this index has been flashing for months, consumer and government spending (a.k.a. deficits) seems to have kept our head above water. That could certainly change, but alongside the Leading Economic Index is the CEI, or coincident economic index. This reading measures conditions now, as opposed to the crystal ball approach of the headlining index. The CEI rose by 0.2% in December, finishing the last 6 months of 2023 with a total gain of 1.1%, accelerating from 0.8% in the first 6 months of last year. So while the annual growth rate of the LEI remains “deeply negative,” according to the Conference Board, taking our pulse in the now hasn’t been as bad. Plus, while the LEI has been in a steady downtrend, overall GDP growth doesn’t seem to care: [Source](=) We don’t have the numbers for Q4 GDP growth just yet. But based on the retail sales report from December and the fatty deficit big dawg Joey B’s admin is racking up, the other factors in the GDP calculation—net exports and business investment—would have to be looking worse than Tyler Bass’ ability to hit a field goal to cause a negative outcome. What's Ripe 🤩 Spirit Airlines (SAVE) 📈19.5% - Following the Jon Snow playbook, Spirit’s shares came back to life on Monday after we all thought their next layover might be in bankruptcy court. - The airline’s lawyers woke up this week and chose violence—deciding to fight the DOJ and appeal a judge’s decision to block Spirit’s planned merger with JetBlue. - Thanks to falling >62% already YTD, shares took note from Big Sean and decided to Bounce Back to full beast mode. NuStar Energy (NS) 📈18.3% - Dealflow is so damn BACK, and this $7.3bn acquisition on NuStar by Sunoco has the homies in Houston hyped. Consolidation in the energy sector continues. - Investors in NuStar, a publicly traded MLP involved in the transportation of oil and gas, will receive 0.40 shares on Sunoco for each $NS they hold. - That implies a ~32% premium to Friday’s close, which Sunoco (SUN, -4.52%) wasn’t too hyped on just yet despite an alleged $150mn worth of “synergies.” What's Rotten 🤮 Gilead Sciences (GILD) 📉10.2% - When you live by drug trial results, you die by them, too, as Gilead shareholders learned on Monday. And this drug’s Phase 3 trial didn’t quite cut it. - Trodelvy, Gilead’s lung cancer treatment, did show a more than 3-month improvement in median survival, but the scientists say that didn’t meet the study’s “endpoint.” - As the “crown jewel” of Gilead’s $21bn buyout of Immunomedics, this dud of a trial has investors (and probably patients) spooked. Advanced Micro Devices (AMD) 📉3.5% - We’re getting a master class in analysts not being able to make up their minds as AMD shares sold off on a downgrade from Northland Capital Markets. - Disagreements make a market, but when you give a stock a “heck if we know” rating like these analysts did on Monday, that’s tough to argue with. - The analysts said the 75% runup in $AMD since October clouds the amount of AI demand that’s priced in, so they decided to just say, “f*ck it,” or I guess, “heck it.” Thought Banana 🤔 To The Moon (Literally This Time) Miami, Cancun, and Cabo are some of the hottest destinations on Earth for Spring Break. But, if we expand that view beyond just Earth, we can find one destination far more people want to go to—and it’s a lot hotter, too (on the light side, at least). The Space Race is back, and this time, it’s not just for sh*ts and giggles. Humanity actually wants to do something the next time we spend billions of taxpayer dollars to get to the moon. Also different this time, the race is far from the 1v1 matchup of the 1950s, 60s, and 70s. Just three days ago, Japan became the 5th country in history to complete a “soft landing” on the moon’s surface, joining the likes of the U.S., former Soviet Union, China, and India. [Source](=) The U.S. is still the only nation in history to have human beings actually land on the moon, but we haven’t been there since 1972—over 50 years ago. But… Ever since India’s first successful soft landing back in 2008, their discovery of evidence for water on the lunar surface has sparked a renewed interest in what that dusty piece of cheese in the sky might offer. Much like the U.S.’s excursions for oil in the Middle East, getting to the moon is all about harnessing resources, but hopefully, this time is less horrific. And, according to people way smarter than me (a.k.a. everyone), extracting resources from the moon is “the stepping stone to all of the vast riches in the universe.” Even more different this time… It’s not just countries that are competing. SpaceX, Blue Origin, Lockheed Martin, and others all have lunar landers either developed or currently under development. SpaceX, for one, has already won a [$2.9bn DoD contract]() to provide the lunar landing module meant to take astronauts from the moon’s orbit to the surface. [Source](=) Elon’s real goal is, of course, to “die on Mars, just not on impact,” but as the expert above said, the moon is that first step. Heavy investment into space-faring vehicles, space-based manufacturing technology, and a bunch of other godless tech George Lucas probably dreamed of as a child is well underway and appears only ready to ramp up in the coming years and decades. That means that even you might have a chance to spend Spring Break on the lunar surface, but I’m not sure how the students then will feel about having your old *ss around. Either way, if you do end up heading to space someday, please just make sure you don’t come back with this hella disturbing [look and laugh]() that Bezos scarred us all for life with. 💭 The Big Question 💭: When will the next human being walk on the lunar surface? What kind of discoveries can we expect or wildly speculate about in the meantime? What’s our next stop after the moon? Banana Brain Teaser 💡 Yesterday 🗓 When a subscription to a new magazine was purchased for m months, the publisher offered a discount of 75 percent off the regular monthly price of the magazine. If the total value of the discount was equivalent to buying the magazine at its regular monthly price for 27 months, what was the value of m? Answer: 36 Today 🕐 At a garage sale, all of the prices of the items sold were different. If the price of a radio sold at the garage sale was both the 15th highest price and the 20th lowest price among the prices of the items sold, how many items were sold at the garage sale? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says 🤓 “The important achievement of Apollo was demonstrating that humanity is not forever chained to this planet and our visions go rather further than that and our opportunities are unlimited.” — Neil Armstrong How Would You Rate Today's Peel? 😁 [All the bananas]() 😐 [Meh]() 😩 [Rotten AF]() Happy Investing, David, Vyom, Jasper & Patrick [ADVERTISE]( // [WSO ALPHA]( // [ACADEMY]( // [COURSES]( // [LEGAL](=) [Unsubscribe]( IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States (617) 337-3353