Not This Again...

February 16, 2024 | Peel #649 Silver Banana goes to... [CapLinked. ]( In this issue of the Peel: - We failed, as donations to the economy (aka spending) came up short - Shake Shack wins the burger war; No more Big Green Tractors - Are NFTs back for good? Market Snapshot 📸 Banana Bits 🍌 - ALL TIME HIGHS are back, with the S&P [closing at a record](=) - Berkshire trimmed their crown jewel—[their Apple holdings](=) - European regulators are trying to [ramp up defense spending]() - China is following the socialist playbook to [fix its real estate market]( My Boss Is Going To Fire Me For This – New TikTok Page is LIVE Caplinked So Good -- Yes, Yes, Yes! Something unexpected happened when we started making these posts. People kept mentioning how funny we were. And I was like, "Wow, what a terrific audience." So we figured, f*ck it, let's create a meme page to keep the lolz rolling. That's why Caplinked launched Federal Rizzerve on [TikTok]() and [Instagram](). It's where people in finance come to shit-talk everyone and laugh (or cry) at the current state of affairs. And Because we're just having fun, nothing is off-limits. So smash that follow button daily posts until our social media guy gets fired for pissing off the wrong person. Slide in the DMs for details on the VIP trip to Coachella when you open an [Enterprise VDR plan.]( Follow, share, and we'll see you there! Macro Monkey Says 🐒 We Miss The Old Kanye Nobody loves Kanye more than Kanye; we all know that. In fact, he’s [told us]()—many, many times. But now, loving Kanye has much less competition for very, very obvious reasons - and the same may be true for loving the economy. Ye undoubtedly peaked in 2011 after Watch the Throne, and the more economic reports we get, the more we can’t help but think the U.S. economy may have reached its peak around the time of the major heatwave that swept across the Southwest in June 2023. Let’s just hope the U.S. economy doesn’t do something as trash as Vultures I. Although, the January retail sales report has gotta be close… The Numbers Basically, we failed. Donations to the economy (a.k.a spending) plummeted more than expected in January, falling 0.8% for the month. [Source](=) Our last hoorah may have been this past holiday season, and we didn’t even know. Since 2020, economists and other nerds have been warning of depletion in excess savings along with higher interest rates, creating a scenario where all roads lead to weaker consumer spending. Well, pour one out for the nerds because they were finally right in January. If one month’s not enough, both December and November total sales figures were revised lower as well. November was nearly flat, while the holiday season still saw a 0.4% jump. [Source]() Seasonality and other technical factors could be complicating the data, but the trend matches up with the spending report we got from Bank of America just days ago. So, we can chalk it up to technicals all we want, but even if spending isn’t actually declining, growth is undeniably slowing. Plus, the Commerce Department, who released the report yesterday, also cited depressing weather as a driver. But, like sunshine in January, some optimism was able to peek through the economic clouds. Nonstore retail (a.k.a, Amazon) sales grew 6.4% compared to January 2023 while y’all were still getting after it, growing restaurant and bar spending by 6.3%. The Takeaway? Whether in actual decline or just due to technical factors, consumer spending in the U.S. is undoubtedly slowing down. For JPow and others still terrified of inflation, this could be a good thing. Less spending = less demand for goods = less price increases. But no one cares about the price of goods if we slow so much that we can’t buy them at any price. And that is the real fear we should have. Rates and inflation have taken the stage from *checks notes* literally everything else macro-related for the past 4 years now, but those two things are derivatives of economic fundamentals—they shouldn’t be thought of as the fundamentals. Rates are supposed to be responsive to economic conditions now and what we expect in the future, not the sole determinant of it. So if consumer spending, which makes up ~2/3rds of U.S. GDP in any given year, slows enough, we might have to move interest rates in response to economic fundamentals rather than just to quell inflation. Fed Chair JPow will actually have to give the people what they want. We just hope that Kanye eventually listens, too. What's Ripe 🤩 Twilio (TWLO) 📈26.04% - The debate is settled - Shake Shack’s pop on earnings yesterday confirms this burger slinger beats 5 Guys, In N’ Out, and all the rest. - The best restaurant to sit at while waiting at the airport delivered a surprise profit of $0.02/sh while the Street was expecting a breakeven quarter. - 80 new locations and improving restaurant-level margins both contributed to this and, given the strong guidance, is expected to continue in Q1 and 2024. Crocs (CROX) 📈12.24% - Crocs pays us every day with a wealth of drip in their shoes, and in 2023, we paid it back. The shoemaker earned all-time record profits last year. - HeyDude revenue declined in Q4, partially due to seasonality. Still, Crocs delivered $2.58/sh on $960mn vs. estimates for $2.37/sh on $958mn. - Traditional Crocs revenue sits on solid guidance heading into Q1, but the HeyDude brand could fall as much as 23%. Wall Street was hyped. What's Rotten 🤮 Twilio (TWLO) 📉15.39% - The epitome of “nobody knows what we do, but everyone uses our services,” Twilio reported strong earnings and a spooky inquiry into a certain business unit. - One segment, literally called “Segment,” has come under activist fire as they push the firm to sell the segment or just give up and sell the entire business. - However, Twilio ate off those activists’ plates in Q4, delivering $0.86/sh on $1.08bn vs. the expected $0.58/sh on $1.04bn. The beef remains unsquashsed. Deer & Co. (DE) 📉5.23% - Y’all don’t wanna take me for a ride on a Big Green Tractor anymore? Damn, I’m just glad I’m not the only one upset about it. Deere is downbad, too. - The farming and other equipment supplier beat earnings, but guidance for Q1 led to a river of tears flooding Wall Street. Sales of $10.4bn just beat the $10.3bn est. - EPS beat by far more, suggesting the firm did a solid job of cutting costs. However, macro fears have managers and investors tweakin’. = Thought Banana 🤔 The Return of the King I just lost at least 25 IQ points after seeing this. Remember NFTs? Yeah, that stupid idea of digital “art” that couldn’t be replicated despite screenshots being widely available on every divide in the world. That stuff. Well, they’re back. Like C-19, we thought we had rid the world of such a monstrosity, but every now and then, they keep coming back. At least we’re not in competition with other Apes anymore, however, because: Pudgy Penguins is Ripping Over the past week, the NFT collection called “Pudgy Penguins” (I know, it makes me hate myself, too) has ripped and become easily the most traded asset on the NFT marketplace OpenSea. Bored Apes and Mutant Apes are still in the top 5, but this winter, the penguins have dominated. I don’t mean to be too much of a hater, because this guy’s mustache is almost as cool as mine: = [Source]( But probably not for the nearly $60k he’s going for at the time of writing. The crazy thing is there’s actually a reason for the recent rise in price and trading volume. Developers at Pudgy Penguins are developing the “Pudgy World,” a gaming experience set to debut in the coming months on Apple’s Vision Pro headset. Ethereum mints and other signals of releases for new NFT projects are still in the gutter historically, but it’s—let’s call it “interesting”—to see existing collections actually doing something for once. = [Source](=) Now, Pudgy Penguins is officially the 3rd largest market cap of all NFT collections out there, behind only the Punks and Bored Ape Yacht Club (BAYC). Cool, but Who Still Cares? Well, maybe we all should. Clearly, NFTs aren’t going away like we thought they would, kind of like the two senile, elderly men still running for U.S. President. But unlike those two, these NFT price bumps are actually linked to something intrinsic, not just getting bullied on Twitter for paying $75k to have a rock as your profile picture. Plus, this rise comes right in line with investors’ risk appetite coming back into existence, so maybe all they really needed to come back was someone brave enough to give them a chance. How beautiful. Can’t wait to see how it melts down this time! Big Question: Are NFTs back for good, or is this a dead cat bounce? How much of your portfolio are you allocating to digital penguins? Is it rude to call them “pudgy”? Banana Brain Teaser 💡 Yesterday 🗓 In a numerical table with 10 rows and 10 columns, each entry is either a 9 or a 10. If the number of 9s in the nth row is n-1 for each n from 1 to 10, what is the average (arithmetic mean) of all the numbers in the table? Answer: 9.55 Today 🕐 A window is in the shape of a regular hexagon with each side of length 80 centimeters. If a diagonal through the center of the hexagon is w centimeters long, then w equals what? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says 🤓 “NFTs exist so that the crypto grifters can have a new kind of magic bean to sell for actual money and pretend they’re not selling magic beans.” — Michael Burry 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