Mkts, Layoffs, Inflation, Fed, NFLX, TSLA

Markets

Down 24% YtD. 

Layoffs and Freezes and Downgrades and Upgrades

• Lyft has frozen hiring. 
• Meta froze hiring. 
• Docusign cutting 9% of workforce. 

Apple downgrade: The iPhone maker dropped 4.9% after Bank of America cut its rating to neutral from buy, warning of weaker consumer demand for its popular devices. The selloff erased roughly $120 billion from Apple’s market capitalization.

Nike down 10%. Inventory up 44% QoQ.  

Netflix

Netflix upgrade:

• Last week. 
• Two this week. $283. 

Netflix up 35% in quarter from $175 to $240. 

• Advertising $’s. $65/1000 views. 
• Advertisers may allocate from Meta to Netflix. 

Federal Reserve

The Fed led by Jerome Powell raised the Fed Funds rate 75 bps to 3.0 - 3.25%. Expectation is now 4.0 - 4.5% by year end. Powell is determined to sink the economy to drive inflation to 2%. Why 2 and not 3%. We have a strong economy, strong underlying demand, low unemployment and the Fed is determined to destroy that. 

CathieDWood (@Cathie Wood) Tweeted: The Fed is basing monetary policy decisions on lagging indicators: employment and core inflation. Leading inflation indicators like gold and copper are flagging the risk of deflation

Commodities

Commodities are down. 

• Lumber: $410 down from $1300 in February 2022. 
• Copper at $334 from high of $494 in March. 
• Iron Ore $150 to $109.  
• Oil? Not so much

Housing

Housing: 30 year mortgage rate is up from 3% to 7%. Result: $23k increase in down payment (assuming 20% down) and 100% increase in monthly payment (from $1,345 to $2,694).

Tesla

Tesla Recall. NHTSA FUD. Tesla is recalling more than a million cars because of defects in their automatic windows that could injure passengers, the nation's auto safety regulator said. 

FSD Beta. Rolling out to all owners with driving score >80. 

Tesla AI Day.

• Note, this event is meant for recruiting AI & robotics engineers, so will be highly technical
• As well as advanced chip & supercomputer engineers for next-gen training & inference

What are Jim and Mary thinking? 

Quote: Children are happy because: 

• They’re not self conscious. 
• They lack a sense of time pressure
• They’ve no goals.