• The Peel
  • Posts
  • All-Time Athletic Performance

All-Time Athletic Performance

đź’Ľ Everyone in the U.S. had a 4.0 GPA and crushed their networking calls last month. Hiring went stupid as job additions came in >65% higher than expected.

January 13, 2025

In partnership with




In this issue of the peel:

  •  đź’Ľ Everyone in the U.S. had a 4.0 GPA and crushed their networking calls last month. Hiring went stupid as job additions came in >65% higher than expected.

  • 🍺 Walgreens finally took a break from falling 90% over the last decade, and Delta Air Lines made sure earnings szn took off smoothly. Constellation Brands suffered along with their customers through lower wine sales, and insurance shareholders are worried about the LA fires.

  • ⏱️ TikTok’s time is coming. The social media app with more viewership than all of cable TV combined is set to face a ban in the U.S. Find out what that means for you below.

Market Snapshot

Banana Bits

Hands Down Some Of The Best 0% Interest Credit Cards

Pay no interest until nearly 2026 with some of the best hand-picked credit cards this year. They are perfect for anyone looking to pay down their debt, and not add to it!

Click here to see what all of the hype is about.

Macro Monkey Says

Ate Our Wheaties

Michael Jordan’s flu game, Tom Brady’s 28-3 comeback, and Joey Chestnut’s crushing of 83 hotdogs in 10mins—these are some of the great athletic performances of all-time.

But none of them even come close to holding a candle to anything near the sheer, utter, athletic dominance the U.S. economy just put up last month.

The labor market looks hotter than the cast of one of those Netflix reality dating shows.

Let’s get into it.

The Numbers

On Friday, the Bureau of Labor Statistics (BLS) reported that the U.S. economy added 256k jobs in December.

To use the technical term, that’s OP as f*ck.

Economists—bless their hearts—were anticipating additions of 155k. December’s 256k beat that by 65% and posted the highest additions since September, which is actually a lot more recent than I was expecting.

Anyway, we’re still two months away from having a fully revised dataset of job additions in 2024. But, with October’s additions revised up by 7k and November’s down 15k, as of now, total job additions in 2024 clocked in at 2.2mn. 

That’s a monthly average of 186k. In 2023, the U.S. labor market added just over 3.0mn jobs or a monthly average of 251k. That means total additions fell 26.6%, and monthly average payroll growth slowed 25.9%.

But, just because the stage of the labor market cycle got older and, naturally, a little less hot, that doesn’t mean we weren’t still rockin’ in 2024. Taking a longer-term view than the post-pandemic era, 2024 was a strong year for additions.

In fact, at the end of 2024—December in particular—monthly payroll additions were so strong we managed to pull down the unemployment rate. According to the BLS, the country’s jobless rate fell 0.1% last month to 4.1%.

So, while maintaining a strong position, the labor market undeniably slowed in 2024. However, that’s not as bad as it might sound.

Part of the reason JPow and the Fed started rate hikes in the first place was explicitly to slow what seemed like a too-hot labor market in late 2021 and early 2022, with steroid-induced wage growth partially driving inflation.

Coming into 2024, we were concerned that the Fed taking rates from zero to 5.25%—5.5% in just 17 months would slow the labor market too much over the course of the year, potentially threatening real wage and GDP growth.

But, as the data lays out, that clearly wasn’t the case. The goal of rate hikes was to simultaneously 1) Kill inflation and 2) Without killing the labor market and broader economic growth.

We’ll get more inflation readings later this week, but as of now, it still seems like they got the job done.

Markets seem to agree, as jobs data appears to have further reduced the probability of additional rate hikes in 2025. Following the release, stocks sold off, with the S&P 500 down nearly 1% Friday, indicating markets are prioritizing Fed actions over fundamental economic performance.

Treasury yields spiked, too, further solidifying the market’s declining rate-cut expectations. Briefly crossing the 4.40% mark, the 2-year yield—the bond market’s effective forecast of the Fed Funds rate—hit a 5-month high.

The Takeaway?

The U.S. labor market is not as strong as it was in 2021, 2022, or 2023—and that’s a good thing. The too-tight labor market of yesterday has become the just-right labor market of today.

However, markets are prioritizing changes in monetary policy over fundamental economic growth, indicating that we’re much more certain in our growth projections than that of interest rates.

Still, ending the year with 256k additions after starting it, fearful of potential economy-wide layoffs, is such a good outcome that even Robert Kraft would consider it a happy ending.

Speaking of Robert Kraft, shoutout to the Patriot’s new Head Coach—and the first hire of January’s employment report—Mike Vrabel. At least you can’t do worse than Jerod Mayo!

Career Corner

Question

Hi Mentors, I reached out to a boutique IB bank senior director’s LinkedIn with our standard template (asking for 5-10 minutes of time) and got back a “thanks for reaching out.” Any advice on what to say from there?

Answer

I would get it off of Linkedin and follow the steps over email trying to get a call scheduled.

Head Mentor, WSO Academy

What's Ripe

Walgreens Boots Alliance (WBA) 27.6%

  • Walgreens was having a good day on Friday, but then they expanded the chart beyond one day and remembered they’d spent the last decade falling by 90%.

  • Maybe this is the start of a turnaround as the drugstore chain crushed Q4 earnings. Cost cuts helped Walgreens easily beat EPS estimates, reporting $0.51/sh vs the $0.37/sh expected. 

  • Sales of $39.5bn beat the $37.4bn estimate as well on strength in pharmacy sales. Walgreens maintained FY’25 EPS guidance but remained silent on sales.

Delta Air Lines (DAL) 9.0%

  • Delta’s CEO says 2025 will be the “best financial year in our history.” Strong words. I said the same thing about myself in 2024, and, well, let’s just hope they don’t also have to learn the hard way what a “margin call” is.

  • Anyway, shares took off (lol) after reporting earnings Friday morning. Without CrowdStrike to f*ck everything up, Delta beat on revenue and EPS, delivering $1.85/sh on sales of $14.4bn vs the $1.75/sh on $14.2bn expected.

  • Unit economics are the main story here, with Delta’s growing market share in the premium travel category. Its AmEx partnership grew 14%, and sales of premium seats—like first-class seats— grew 8%.

What's Rotten

Constellation Brands (STZ) 17.1%

  • Ponzi Scheme Idea: We buy shares in Constellation, get sh*tfaced daily on their products, and after one earnings report, we’ll all be billionaires. You’re welcome.

  • We gotta start now though because, according to this earnings report the alcoholic beverage maker dropped Friday, Constellation’s sales need our help.

  • Shares mostly sank on a FY’25 EPS guidance that missed estimates, calling for $13.60 while the Street wants $13.73. But last quarter’s results weren’t great either.

  • The Beer segment grew sales by 3% YoY, gaining market share on a 1.6% rise in shipments. However, Wine & Spirit sales sank faster than my likelihood of making it home safe from the bar, down 14%. 

Insurance Stocks (ALL, TRV, CB) 5.6%, 4.3%, 3.4%

  • Whoever the guy or gal is at Statefarm that made the call to pull out of Southern California as much as possible in early 2024 should probably be promoted to Super Mega CEO.

  • Statefarm left Allstate, Travelers, and Chubb—the three insurance firms that JPMorgan says are most exposed—to deal with claims related to the LA fires.

  • Investors don’t want to stick around and help pay those claims for obvious reasons. But the real story here is what happens going forward—what kind of prices will insurers feel they have to charge to insure these rebuilt homes?

Thought Banana

TikTok’s Tick-Tock

Wow, they might actually do it.

Therapists and ADHD specialists are about to rake it in from sea to shining sea, that is, if the U.S. actually does ban TikTok.

Let’s dive in.

What Happened?

For those of us fortunate enough not to know who Alix Earle is, recall that in April 2024, the U.S. Congress passed a bill that required TikTok’s parent company, ByteDance, to sell the application or face a national ban.

The Protecting Americans from Foreign Adversary Controlled Applications Act is its own giant problem, but this is the broad-sweeping legislation that effectively bans TikTok in the U.S.

Needless to say, TikTok challenged the law in an attempt not to lose its 180mn users in its wealthiest consumer base. The company argued that the above Act violates the First Amendment, which the D.C. Court of Appeals said is “bullsh*t” (paraphrasing) on December 6th.

That sent the case to the Supreme Court, which fast-tracked it for a hearing to start on January 10th—this past Friday. Oral arguments were heard, and, as of now, the 9 Justices appear divided on the constitutionality of the above Act.

And that’s where we stand right now. The Act comes into effect on January 19th—this Sunday—so by then, one of four things necessarily needs to happen:

  • Bytedance rushes a sale of U.S. TikTok to a majority American-or-Ally-owned buyer.

  • Bytedance shuts down TikTok in the U.S.

  • The Supreme Court strikes down the Foreign Adversary Controlled Applications Act as unconstitutional under the First Amendment.

  • An extension is granted beyond January 19th, and something new happens.

Usually, I’m at that perfect point of the Duning-Kreuger Effect, where I feel confident enough to give a take on the expected outcome while having less than zero knowledge of what actually might happen.

But, honestly, this time, I have no idea. 

With the Trump Administration entering office on January 19th, which has expressed disdain for the law and a desire to work out some kind of Art of a Deal, some kind of extension could be granted at the President’s discretion, especially if a sale is announced before, even if the sale is a mirage to buy more time.

Regardless, everyone settle down. The app isn’t getting deleted from your phone. 

Apple, Google, and other app store providers will be required to remove the app from their stores. In addition to not being able to download it, the app won’t get updates or bug fixes and will lose functionality over time.

If internet service providers—like AT&T and Verizon—are required to block access to TikTok, then we’re gonna have problems. But that aspect of the law isn’t totally clear just yet.

The Takeaway?

Who knows what’s gonna happen? But that’s a helluva lot of users, user data, e-commerce touchpoints, and more that Bytedance and TikTok will completely forgo if nothing changes.

Because of TikTok’s economic value alone, it’s hard to imagine Bytedance is willing to completely throw that away to spite U.S. lawmakers.

I really mean it this time—stay tuned.

The Big Question: Will TikTok shut down in the U.S.? If it doesn’t, which social media app’s stock should I buy? What else might happen?

Banana Brain Teaser

Previous

Three-fourths of the area of a rectangular lawn 30ft wide by 40ft long is to be enclosed by a rectangular fence. If the enclosure has full width and reduced length rather than full length and reduced width, how much less fence will be needed?

Answer: 5

Today

If a(a+2) = 24 and b(b+2) = 24, where a ≠ b, then a+b =?

Send your guesses to [email protected]

âťť

The game of investing is a process of discovering who you are, what you're interested in, what you're good at, what you love to do, then magnifying that until you gain a sizable edge over all the other people.

Li Lu

How Would You Rate Today's Peel?


Happy Investing,
David, Vyom, Ankit & Patrick