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- Market Munch 🍎 | 10 March 2023
Market Munch 🍎 | 10 March 2023
Silicon Valley's bankers start sobbing, Apple lobbies in India, and Cathie Wood raked millions in. 🔥
Aryaansh Rathore
March 09, 2023
Happy Friday, Munchers! 🙏
Hope you’re all chilling out and enjoying life.
As always, here is your daily dose of the news that matters, from Wall Street to Dalal Street - in 4 minutes and 59 seconds.
Yesterday, Silicon Valley’s favorite bank drowned big, Apple asked for flexible laws, and Cathie Wood made millions. 🔥
Let’s dive in.
What’s hot, what’s not?
Market Commentary
American markets saw nothing but red ahead of today’s jobs report. The big boys of Wall Street are getting pretty jittery. 💀
US banking shares also got slammed massively after some tensions over sinister happenings in Silicon Valley.
Turkey needs billions of dollars in the bank to rebuild their homes, schools, and offices. They took a big step toward getting there with a $2.25bn bond deal - their first one since the earthquake.
Story Roundup
Silicon Valley Bank serves half of all US venture-backed tech companies and is one of America’s largest banks.
And the big wave that’s eating up their clients’ profits is now forcing SVB under some heavy microscopes.
Their core business comes from playing with the cash that freshly funded tech startups deposit.
During the 2021 boom, their customer deposits surged from $102bn to $192bn, leaving them awash with liquidity.
But that number is dwindling fast, with almost $60bn leaving their coffers and a decent chunk yet to go.
Top VCs are informing their portfolio companies not to come within a 100 kilometer radius of SVB.
Their stock price fell by 85% yesterday.
Big money, all gone up in smoke. 💵
China is apparently no longer suitable as the world’s factory - which makes India the next best bet.
Apple has wanted to move their manufacturing to India for a long while now, and they’ve made no secret of it.
It turns out that Foxconn and Apple were behind a landmark liberalisation of labour laws in Karnataka.
Workers are now legally allowed to work two shifts - which they couldn’t do before.
Now that Apple has a license to freely exploit workers, they’re gonna be spending some big bucks on a 300-acre iPhone manufacturing plant.
Industry still plays a modest part in India’s economy, so Apple is gonna get a cash boost from all the millions in subsidies that they’ll receive.
Electrifying. ⚡
Riding the tech wave paid some massive dividends if you timed it right.
Cathie Wood is an example of someone who timed it very, very wrong.
Turns out Ark Innovation (her flagship ARKK fund) has earned more than $300mn in fees over the last 9 years despite burning up $10 billion in investor cash.
These high fees have given Cathie and co. a very comfortable living, but her investors cannot say the same.
The fund is down 80% from it’s peak and is CRYING for a change in strategy.
Eye-popping. 👀
On Monday, Tesla announced their 3rd price cut in 3 months.
Stuff was getting out of control and customers were unwilling to splash so much cash on a life-sized battery operated Hot Wheels.
This might seem great for the 99% of people that don’t have a Tesla, but the 1% got very, very angry.
Cutting prices destroys value for customers and damages confidence in their vehicles.
The knock-on effect is a hit on the entire EV sector, which has caused a little grumbling between the big boys.
Renault is raising an eyebrow and have denounced Tesla’s price cuts.
But hey, Tesla can perform without 75% of it’s market cap the same way Twitter can perform without 75% off it’s employees. 🐦
In a world where nothing is reliable, the only thing you can trust is that oil prices are gonna keep going up.
Goldman Sachs is betting that a barrel of oil will run you $105 by the end of the year, and there are quite a few reasons behind this boom.
China is reopening pretty fast. Factories are gonna start churning out all sorts of stuff, which means that they will need tons of fuel.
Plus, US oil producers have been relatively unable to increase output, which means that prices go 🆙. Basic economics.
Demand is set to go up 2.7 million barrels/day this year - which is a mammoth increase.
Slippery business. 🛢️
Hope you enjoyed this issue of Market Munch. If you’ve got any feedback - good or bad (😏) you can hit reply to this email and I'll get a ping in my inbox. Thanks a ton for reading!
Cheers, and have a lovely day. 🙏
- Aryaansh ⚡