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Markets Double Down
Traders continue to make bets that the Fed will cut rates in September, with the cut fully priced in.
Silver banana goes to…
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🎯 In this issue:
Banana Bits: Finance headlines that actually matter
Market Summary: BLS March Jobs Markdown
What’s Ripe / Rotten: The tastiest and most disgusting stocks
Technical Trip: Interview Q&A from Evercore
Deal Dispatch: M&A, IPOs, and other transactions
Market Snapshot
📉 Banana Bits
Traders continue to make bets that the Fed will cut rates in September, with the cut fully priced in.
The J.P. Morgan trading desk is warning of a stock selloff if the Fed cuts rates.
China’s green push may have them completely cut off fossil fuels by 2030.
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Market Recap
Job Markdown Sets Stage for Fed Cut
Stocks continue to rise as the Bureau of Labor Statistics (BLS) announced a further revised jobs report for March, reinforcing the possibility of a September rate cut by the Fed. This also brings into question the ability of the BLS to accurately report data.
While corrections in the job data are a relatively common occurrence at the BLS, job cuts by the Trump Administration have sparked rumors regarding inaccuracy in job data due to frequent corrections and the BLS having to use less accurate methods to collect data.
Regardless, a significant downward revision in the March jobs data has caused traders to continually fully price in a September Fed cut, despite the fact that August CPI has yet to come out.
While the September Fed meeting is not until the 16th, August CPI is set to be released this Thursday, September 11th, at 8:30am. While the probability of the September rate cut is sky-high, a hotter-than-expected inflation report would make the decision difficult for the Fed, given the extremely slow labor market.
Nevertheless, this job markdown nearly guarantees a rate cut, assuming inflation comes in as expected, as a result of the slowing labor market.
What's Ripe
Planet Labs PBC (PL) 47.9%
Planet Labs beat both revenue and EPS expectations on their Q2 earnings report, reporting an EPS loss of $0.07 compared to an expected loss of $0.09.
The public benefit corporation also posted a 20% YoY increase in revenue to $73.4 million compared to the expected $66 million.
Globalstar Inc. (GSAT) 21.5%
Globalstar’s shares rose as a result of sector-wide momentum resulting from SpaceX’s announced acquisition of EchoStar, propelling investor momentum.
What's Rotten
Summit Therapeutics Inc. (SMMT) 25.2%
Summit’s stock plunged yesterday after their clinical stage trial result came in more disappointing than expected, causing investors to lose confidence in the stock.
The performance of clinical-stage biopharma companies is often dependent on performance within clinical trials, with Summit not being an exception.
Pampa Energia S.A. (PAM) 16.7%
PAM’s stock fell sharply yesterday after OPEC announced plans to increase oil output in October, pressuring global oil prices.
This move caused investors to lose confidence in the stock.
🧠 Technical Trip
Q&A Interview with Evercore
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🦈 Deal Dispatch
M&A, IPOs, And Other Notable Transactions
SpaceX offers to buy EchoStar spectrum for $17 billion.
Patient Square Capital is exploring an acquisition of the healthcare company Premier.
PNC agreed to buy Firstbank for $4.1 billion.
Klarna expects its IPO to be at the higher end of its pricing range.
Databricks raised $1 billion in a Series K funding round.
PE firm Hg invested in Payworks, a provider of workforce solutions.
Fermy, an energy infrastructure REIT, filed for an IPO.
Banana Brain Teaser
Previous
In a small snack shop, the average revenue was $400 per day over a 10-day period. During this period, if the average daily revenue was $360 for the first 6 days, what was the average daily revenue for 4 days?
Answer: $460
Today
A factory has 500 workers, 15% of whom are women. If 50 additional workers are to be hired and all of the present workers remain, how many of the additional workers must be women in order to raise the percentage of women employees to 20%?
If you want to be in this business, you must accept that you can look wrong for a while in order to be right in the long run.
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Happy Investing,
Chris, Vyom, Ankit, Colin, Mitchell, & Patrick