- Market Munch
- Posts
- Market Munch 🍎 | 3 November 2022
Market Munch 🍎 | 3 November 2022
Fed turns the AC on, Netflix plasters ads in movies, and Meta's investors raise an angry eyebrow. 🔥
Aryaansh Rathore
November 02, 2022
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 53 seconds.
That's less time than it takes for the Fed to take a chill pill, Netflix to turn into YouTube, and Meta's investors to sour at Zuck's shopping spree. 🔥
Let’s dive in.
What’s hot, what’s not?
Market Commentary
Markets remained very choppy as the Fed hiked interest rates by 75bps.
Despite a pretty grim mood in markets, US ETFs managed to attract over $500bn of inflows.
Stan Druckenmiller and a few other hedge fund big shots have warned that the SP500 could fall up to 20% more by the end of the year. 😬
Story Roundup
The Fed sets the stage in our markets, and it looks like we're at a royal ball.
They just hiked interest rates by 75 basis points - but as always, it's the finer details that matter.
Fed officials hinted that they might start slowing the pace of rate increases if the current hikes manage to work their way around the economy.
These comments sent US stocks rising, as investors interpreted this as a dovish signal.
The Fed seems to be prepared to take it's foot off the gas.
Let's hope they don't crash the rocket ship we're all on. 💀
If you're a tech business, all roads lead to ads.
And Netflix is following that very path.
They just launched a cheaper tier of subscription, with one drawback.
You can pay 50% less for Netflix, but you'll be shown ads. They've fixed the rate at 5 minutes of unskippable ads per hour of content watched.
That puts them right next to YouTube - a giant in the content advertising space.
I doubt I'll be happy if I get a Gilette ad while watching Breaking Bad... but we'll see. 🤷
Since Facebook changed it's name to Meta, they've lost over $500bn in shareholder value.
They are sipping on a deadly cocktail of wafer-thin margins, surging costs, and falling sales.
Revenue seems to be slowly evaporating - all because of reliance on ads. In times like this, most businesses buying ads are getting squeezed hard for every dollar they have.
This means that the bakery next door spends less money on getting an Insta post viral, and more money on keeping the oven running.
And that weighs heavily on Meta's profits.
Their earnings are growing at the slowest rate since their IPO in 2012 - and investors are judging this from every angle.
Meta's metaverse business is burning tens of billions of dollars without showing any actual returns. The people handing them cash just want to see more proven bets, and less experimental ones.
Britishvolt was an electric vehicle startup that was poised to take the world by storm.
They were so good, that they managed to get the UK government to throw them some money.
And once investors saw this, they got in too.
Britishvolt gobbled up a cheeky $1.9 billion in private investment, but something was too good to be true.
They just warned their investors that they might run out of money and go bankrupt if they don't get a $35 million injection of cash from the UK government.
It looks like management got too complacent and started relying on the 'fun coupons' that the big guys were dealing out.
It's all about what you do when the music stops. 💥
Ferrari is coming out roaring - smashing expectations on sales, and giving some excellent guidance into the last quarter of the year.
As we near the home stretch, appetite for gas-guzzling beasts hasn't gone down.
Ferrari lifted their profit forecasts, supported by vehicle shipments in the double digits.
They might also soon be closing down the order book for their SUV (competitor to the Urus) simply because of how many people want it.
Great time to be a rich dude. 💸
A few nibbles from DexStar🍪
DexStar is Dubai's hottest DeFi app - fusing real-world sustainable projects with crypto natives around the globe.
They're making waves in two ways. - Sustainable project owners are able to hop onto DexStar and borrow from their lending ecosystem.- Crypto HODLers can diversify their portfolios (and make an impact on the world!) by lending to real, sustainable businesses.
If you're a lender, you put your crypto into DexStar's debt vaults. Each debt vault has a different theme, based on a different sustainable energy strategy. And your money's in the safest of hands - the guys that run these debt vaults are run by people that have real world experience. They know what they're doing. 🤷
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!
Cheers, and have a lovely day. 🙏
Aryaansh