Good Morning Everyone!
Turns out free money is very expensive.
- FTX/Alemeda collapse will cost US$7-12B - FTX worth almost NOTHING
- Meta - lost US$730 billion in 12 months – soon be worth NOTHING?
- Tiger Global - hedge fund losing US$40MM a day
The system needs a reset.
Prices as of 4 pm EST, 11/8/22; % YTD
MARKET UPDATE Markets move to Thursday’s CPI number after Midterm results trickle in
- Midterms did not move the markets
- CPI likely will (Thursday)
- Cleveland Fed Inflation Nowcast:
Crude 88 -1%
- Lower on a large crude build in the API weekly
Midterms
-
Senate
- Control is up in the air
- Georgia, Arizona, Nevada are too close to call
- Georgia likely to go to a run-off in December
- Democrats flipped a Senate seat in Pennsylvania, Fetterman defeated Dr. Oz
-
House
- Republicans likely to take the House but by a smaller margin than forecast
Meta (NASDAQ: META) +5%
- Letting go of around 11,000 employees and extending a hiring freeze through Q1
- 13% of its staff
- First ever broad restructuring at Facebook/Meta
- 2023 operating budget $97 billion at mid-point vs. prior $98.5 billion
- 2023 capital expenditures $35.5 billion at mid-point vs. prior $36.5 billion
Disney (NYSE: DIS) -8%
- Revenue miss = 5%
- EBIT operating miss = 23%, largely due to Parks
- Parks margins missed
- Bigger losses at direct-to-consumer streaming and linear
- Disney+ sub adds beat 12.1 million but average revenue per user declined 5% y/y
ByteDance/TikTok
- Also getting hit with lower Advertising revenue
- Slashed $2 billion off its 2022 Ad Revenue target ($12B to $10B)
Tesla (NASDAQ: TSLA (NASDAQ:TSLA))
- Elon Musk sold around $4 billion of Tesla stock to close Twitter deal
- Elon also sold stock in August
Taiwan Semiconductor
- Plans to build another chip making plant in Arizona
- Already announced a $12 billion complex
- The two plants will be north of Phoenix
Earnings
- Affirm (NASDAQ: AFRM) -16%, lowered 2023 guide
- Occidental Petro (NYSE: NYSE:OXY) -1%, cash Flow, FCF and production beat, EPS slight miss
- Lucid (NASDAQ: LCID)
- D.R. Horton (NYSE: DHI) -2%, Revenue $9.87B vs. guide $10-10.8B, EPS $4.67 vs. $5.07
- Roblox (NYSE: RBLX) -15%, revenue miss, less gaming
- AMC (NYSE: AMC) -1%
CRYPTO UPDATE FTX (CRYPTO: FTT) update: things very much not “fine”
- FTX facing serious liquidity crunch
-
Binance signs non-binding LOI to acquire FTX
- No guarantees…due diligence underway
- Just months ago FTX was doing the bailouts
- Who is left to bailout Binance if it fails?
- Is FTX’s Sam Bankman-Fried the next Warren Buffett: A Hard NO
- FTT (FTX token) crashed…down >80%
- Surge in withdrawals out of Jump Trading, Alameda Research (both owned by FTX):
Ripple effects felt throughout crypto
- October crypto gains have been erased
- Prices back at June lows
MEME OF THE DAY
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