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 41 seconds.

Yesterday, European consumers got some breathing room, Adani lost billions more, and Peloton cycled down it's cash burn. 🔥

Let’s dive in.

What’s hot, what’s not?

Market Commentary

• The Bank of England is finally learning from it's mistakes and setting up some "steady state measures" for the LDI market - a much needed tool since September's liquidity crisis that threatened to wipe out pension funds. Resilience is what they need.

• Lebanon devalued it's currency by 90% to address a deep economic crisis but instead stoked a lot of inflation concerns. Tough stuff. 😬

• The Fed stuck with it's plan and played the ball right where everyone expected it. A 25 bip hike. Remember folks, rates are still going up. Not as quickly, but they're still going up. 🙏

Story Roundup

1 - European inflation starts slowing down. 😅

3 months back, newspaper headlines were screaming that the end of Europe was near.

Yesterday, inflation data came in, and it looks like all might be well.

Eurozone inflation slowed from 9.2% to 8.5% - which gave markets a much-needed breath of fresh air.

But every silver lining comes with a very dark cloud, and core inflation (normal inflation minus volatile stuff like housing and energy) is stuck at an all-time high of 5.2%.

The European Central Bank has all the impetus they need to continue with their plan of hiking rates to squeeze demand out of every corner of the economy.

Stuff's gonna get tight! 😤

2 - Adani's fall from grace tops the $100bn mark. 📉

The dude that manages Forbes Rich List must be getting angry at Adani because of how often he needs to make changes to the website.

Adani Group's selloff saga continued yesterday, with the stock falling another 30%.

That brings the total monetary losses to ~$99 billion, and virtually infinite reputation losses.

They also cancelled their $2.4bn share sale, which puzzled quite a few investors.

The reason Adani was raising this cash was because debt needed to be paid off. Returning the money is gonna help their reputation, but is probably gonna hit fast-forward on their debt clock.

All of that money is gonna be returned to investors, so Adani's billionaire buddies are gonna get their pocket change back.

Scary stuff. 🔪

3 - Peloton slows down cash burn and cycles back to a turnaround. 🚴‍♂️

Pandemic darling Peloton has had a rocky few months (to say the least) but a rosy future might be in sight.

The "path to the promised land" isn't selling bikes.

It's subscriptions. These are the CEO's words, not mine.

Peloton's CEO said that he doesn't care about the hardware margin because of how much more potential the software can rake in.

They make money by selling classes and subscriptions to use the bikes - which results in a healthy recurring stream of revenue.

Hardware margins are a hard one to crack, sitting at a meager 11.2%.

Software margins on the other hand - are super breezy. Peloton rakes in 68% from software sales.

Stick by your winners, and abandon your losers. 🤷

4 - America says that Russia's up to some fishy business. ☢️

Strategic nuclear weapons are nukes placed around the world.

For example, Russia will stash some missiles on an ally's land, so that they can get into battle in case something goes wrong.

America and Russia signed a piece of paper called the New Start Treaty. This capped the limit of strategic nukes to 1,550.

Uncle Sam thinks that Papa Putin has overstepped that limit, and he's starting to whine about it.

The West is increasingly growing conscious about the fact that a nuke could be sent to the Ukrainian front lines given how badly Russia is faring.

Time will tell where these folks go. 🤷

5 - India drops a blockbuster 2023 budget. 💸

The world's largest democracy dropped a capex bazooka yesterday, and it looks like a fun one.

This is the Modi government's last budget (until he gets re-elected... 🤔), so it was bound to be a bumper one.

- 50-year interest free loans granted to state govts (provided ALL of it is spent on capex)- $31bn (2.5L Cr) of spending on railways- 50 more airports, heliports, and aerodromes- $1.2bn (10K Cr) on urban development fund- breath of relief for the middle class with more lax taxation- $2.4bn (20K Cr) provided for farmer and fishermen support- millet production to be increased and research committees set up- deposit facility for women at a 7% interest rate for 2 years- 38,000 teachers to be recruited for govt schools- credit guarantees for MSMEs- regulators will review existing financial regulations- central processing center for companies' forms to reduce red tape

Bond markets looked a little trippy given just how much spending was being hammered out, but not much looked off.

Jai ho. 🙏

Hope you enjoyed this issue of the Market Munch. If you've got any feedback - good or bad (😏) you can hit reply to this email. Thanks a ton for reading!

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Cheers, and have a lovely day. 🙏

Aryaansh