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- Market Munch 🍎 | 1 March 2023
Market Munch 🍎 | 1 March 2023
Tesla makes moves to Mexico, Goldman says bye-bye to the little guy, and India's growth guns slow a bit. 🔥
Aryaansh Rathore
February 28, 2023
Happy morning, Munchers! 🙏
As always, here is your daily dose of the news that matters, from Wall Street to Dalal Street - in 4 minutes and 43 seconds.
Yesterday, Tesla splashed cash on a Mexican factory, Goldman Sachs got out of consumer banking and Indian GDP growth slowed down. 🔥
Let’s dive in.
What’s hot, what’s not?
Market Commentary
European stocks pared early gains and US markets also remained mixed. Lots of volatility and lots of chop.
Private LBO lending seems to be ramping up - Oaktree Capital and a few others have all set up $5bn+ funds to deal with buyouts.
Mr Market is NOT feeling his best. 🙈
Story Roundup
Just a short drive South from Texas lies Monterrey - a sprawling business city fringed by mountains.
Turns out Elon Musk fell in love with the place, so he’s gonna built a factory there.
His first Mexican factory - and judging from his words, the first of many.
Tesla has a very lofty goal - to hit 20 million cars a year by 2030.
They wanna get it done quickly and cheaply.
Mexico was included in $370bn worth of green subsidies that Biden Baba announced, which is why it’s easier to outsource production at a low cost.
Electrifying. 🔋
Things haven’t been the same since Goldman burnt their fingers on consumer banking.
They hoped to revolutionize the way that the little guy saves, but failed pretty badly.
And their CEO apologized to the big-money investors over it.
He told shareholders that he’s exploring strategic alternatives for the consumer division - which is corporate-speak for “We’re gonna try selling this ASAP”.
Goldman lacked execution.
Product didn’t catch on well, consumers found better alternatives, and entire business units started getting bloated.
So it’s natural that investors want to see more of the “traditional” Goldman.
Less jazzy and flashy stuff, and more of their money-makers. That means back to trading, investment banking, and dealmaking.
Hot, hot water. 🥵
Rate hikes have been gnawing at the Indian economy for a while, and the effects are finally starting to show.
India’s Q3 GDP growth slowed from 6.3% to 4.4%.
A drop was definitely expected, but a drop this big wasn’t.
Overall growth for the year is expected to settle at 7%, which is also a slowdown from last year’s 9.1%.
That is still pretty crazy once you consider how most of the world is doing.
Economists made bets that India’s economic engine would go down to 4.7% growth (which it clearly ended up not doing).
The only place an efficient market exists is in an Econ 101 textbook. 🙈
It’s been a horribly long two years for BNPL startups.
But it looks like that dreadful dry season might come to an end.
Klarna’s net losses shrank from $440mn to $170mn.
That is concrete progress toward profitability - something that seemed far out of reach for 2021’s jazzy startups.
They were once Europe’s most valuable company - valued at $46 billion with a lot of soaring yet to come.
But the COVID-induced online shopping boom subsided, employees were laid off, and their valuation was cut 85%. You could say they got humbled.
The Devil’s Advocate would say that total losses still remain high (soaring past the $1bn mark) and despite this, the CEO’s salary was hiked by 35%.
But hey, rigged world we live in.
There’s a long, long road to walk. 💀
Buildings across Turkey have literally been evaporating.
And some cash-grabbing folks are seeing this as a chance to squeeze out every single lira they can.
Landlords across Turkey have been hiking prices (which is fine). Others though, have been price gouging - something that the government hates.
Any homeowners that raise rent are now gonna be thrown in jail, and given a fine to top it all off.
Construction tycoons that hike raw material prices are also gonna face the same fate.
Looks shaky. 🧱
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 ⚡