Every weekday, we send to our community a summary of the most impactful Business/Financial news of the day - the "Daily Dose".
Is Peloton the right stock to benefit from the quarantine?Published by Terence Mahier | Source
You might have heard of Peloton, the startup that sells connected cycles for home use, as well as subscriptions to stream workout classes through an app available to all 🚴♀️📲
Peloton is in the middle of an investors' dilemma: on one hand, it is THE stock that could benefit from the quarantine, as consumers are increasingly turning to at-home workouts to maintain their fitness during the pandemic 😷
On the other hand, some big names voiced growing concerns that "virus stocks" like Peloton (or Zoom) might not look so attractive once the pandemic is over 😴
Do you think stay-at-home stocks like Peloton are just a temporary craze?
ExxonMobil: the energy stock pops as oil prices finally risePublished by Terence Mahier | Source
Energy stocks have been beaten down as demand for oil evaporated in the face of the coronavirus shutdown. Added to this pain, an all-out price/production war between Saudi Arabia and Russia drove the barrel of oil to lose more than 50% of its value since the beginning of the year 🛢😱
ExxonMobil, the American oil and gas corporation, got hit pretty much the same way losing around 50% of its market cap in 3 months 📉
Tomorrow, CEOs from at least 7 energy companies (incl. ExxonMobil) will meet with Trump to discuss energy policy...
What will come out of this & what geopolitical actions will the U.S. take to save its energy sector?🤔
When will the Dow Jones hit the bottom?Published by Terence Mahier | Source
This is the question that has been on everyone's mind lately: When will the bear market end? 🐻
Fears about the coronavirus pandemic took more than 35% off the Dow Jones in March, the sharpest drop of its history. Last week, the Dow briefly climbed more than 20% showing signs of recovery 💪
But yesterday night, Trump was eventually forced to prepare Americans for a surge in coronavirus cases, saying the U.S. will face a “very, very painful two weeks” & sending European markets in negative territory 😨
Investors are in the starting blocks to benefit from the post-crisis surge we've been promised. But when will this happen? 🤔
Amazon fires worker who organized a strike over coronavirus protectionsPublished by Terence Mahier | Source
Amazon is part of the businesses thriving during the coronavirus crisis. As a matter of fact, it was looking to hire 100.000 new workers in March to meet the growing demand 🛒
But yesterday, Amazon fired a NY warehouse worker who organized a strike to demand better safety and sanitary working conditions. Amazon said the worker was fired after receiving “multiple warnings for violating social distancing guidelines".
However, many see the move as disgraceful and with the sole purpose to keep the trouble-maker quiet regarding poor working conditions 🤐
Will the market focus on Amazon's healthy cash-flows or fear social backlash? 🤔
J&J announces it will start Human testing of its Coronavirus Vaccine by SeptemberPublished by Terence Mahier | Source
The giant pharmaceutical company Johnson & Jonhson has just announced that it will start testing its "lead candidate" Coronavirus vaccine on Humans by Sept. 2020 - making it ready, if everything goes well, for Jan. 2021 💉
J&J is moving forward after co-investing $1B in R&D and increasing its manufacturing capacity with a new site in the U.S. to produce and distribute the potential vaccine quickly, seeking to produce more than one billion doses 🔥
The journey is far from being over. At least 20 Coronavirus vaccines are in development around the world according to WHO with American biotech Moderna already in Human trial phase ⌛
Delta Airlines could see the U.S. government as a new shareholderPublished by Terence Mahier | Source
Airlines have been one industry hit the hardest by the virus’ impact on travel ✈️
This morning (EST), the U.S. Congress is expected to vote on the stimulus/relief economic plan of $2 Trillion. As part of this plan, the Trump administration is raising the possibility of the government getting ownership stakes in U.S. airlines in exchange for $25 billion in direct grants to help the carriers survive through the Coronavirus crisis 🚒
Among U.S. Airlines, Delta Airlines might be the best positioned to "shrink" its activity during the crisis with a high number of planes ready to retire, meaning lower maintenance costs 🛠
Goldman Sachs loses faith in Beyond Meat as foodservice traffic declinesPublished by Terence Mahier | Source
You might already have heard about Beyond Meat, the plant-based meat "start-up" that IPO'd in 2019 and got its valuation multiplied by 10 in less than 3 months 🔥
Goldman Sachs just announced that they are changing their "target price" (i.e. the price they think Beyond Meat stock SHOULD be) from $129 to $39 😱
Most restaurants are now closing their doors as a result of the quarantine measures taken by governments. Fewer restaurants mean less revenue, especially for Beyond Meat that does not sell its products directly to end-consumers 🛒
But should short-term difficulties dictate the value of such a high-potential company?
Nike Sales beat analysts’ estimates for Q1 2020Published by Terence Mahier | Source
Nike stock has suffered a 30% drop since the beginning of the year following the Coronavirus outbreak. In February, roughly 75% of Nike stores in China were closed and production was reduced as factories were closing down 📉
However, yesterday, Nike surprised the market by publishing higher-than-expected Sales numbers thanks to a boost in Digital sales in China and growth in North America 💪
Though Nike quarterly revenue did reduce compared to last year ($847 million compared with $1.1 billion last year), the sneaker giant managed to navigate through an unprecedented crisis, giving investors hope 😇
Nike was up 15% yesterday.
Twitter goes back on its revenue guidance for Q1 2020Published by Terence Mahier | Source
Social Networks are booming during the Coronavirus crisis as people have to stay home, sometimes without being able to work 📲
Twitter has seen an increase of 23% of its daily total monetizable active users compared to Q1 2020 💪
The problem is that most advertisers are suffering from the pandemic and are halting their marketing efforts, meaning fewer revenue opportunities for Twitter...
The company just announced that it's coming back on its revenue forecast for Q1 2020 (~ $850 Million) and will update the investors on the 30th of April, warning that it might record an operating loss 😣
Will investors focus on the good news 🤔
Zoom might be the "winner" of the Coronavirus EpidemicPublished by Terence Mahier | Source
Did you hear about "Plague Stocks"?
Stocks that benefit from the worsening coronavirus outbreak 😷
Zoom is a video conferencing company considered as a "plague stock". The company has added more videoconferencing users this year than in all of 2019 thanks to the epidemic that forces workers to stay home 🤧
Shares were up 40% in February, their best month since Zoom went public in April 🔥
Tomorrow night will be the highly expected Q4 2019 Earning report and expectations are so high that the stock might get a big hit in case of disappointing results...
Or get an insane boost if results are better than expected 🤯
Twitter CEO Jack Dorsey might soon be replacedPublished by Terence Mahier | Source
Elliott Management has taken a sizable stake in Twitter (around $1B) and plans to push for changes at the social media company... Including replacing the current CEO 👋
Jack Dorsey, the co-founder and current future ex-CEO of Twitter, is probably the most iconic & eccentric leader in Silicon Valley. Twitter almost became a side-hassle as he also founded the successful Fintech Square 💰
In Nov., he tweeted that he wanted to live in Africa for 3 to 6 months this year... Which did not sit well with investors who felt like he was abandoning the ship 🚢
The market seems to be eager to see him leaving, +7% this morning 💥
The Dow Jones is about to close its worst week since the Financial CrisisPublished by Terence Mahier | Source
The Dow Jones is about to close its worst week since the 2008 Financial Crisis 📉
You read it right, the US Industrial Index has suffered a tremendous loss this week (around 11%) and the biggest point-loss of its history yesterday with -1200 points 😱
Coronavirus effect? NO. The trigger of this sell-off was indeed fear of a global pandemic, but the panic we've witnessed in the last few days shows a deeper issue.
Traders like to say that "Trees don't grow to the sky". The question is: how many branches will have to break before the trees start growing again? 🎄
Microsoft warns it will miss revenue guidance for Q1 2020Published by Terence Mahier | Source
Microsoft just joined Apple in admitting that their revenue forecast of Q1 2020 was too optimistic 🙈
Indeed, Microsoft is warning investors that the "Windows" division will not meet expectations for Q1. Why? Because of the Coronavirus, of course! 🤒
Microsoft declared "Although we see strong Windows demand in line with our expectations, the supply chain is returning to normal operations at a slower pace than anticipated"...
The market is under a lot of pressure and reacted very strongly to the announcement with a 4% loss in pre-market trading. In other words, $40B worth of stock value just vanished 🤯
Will it keep falling?
Disney CEO Bob Iger is stepping downPublished by Terence Mahier | Source
Disney CEO Bob Iger is stepping down and replaced by Bob Chapek, previously chairman of Disney Parks 🎢
It's huge news on Wall Street as Iger has been CEO for 15 years and was at the origin of key strategical and highly profitable moves such as the acquisition of Star Wars, Marvel, and Fox, as well as the recent launch of the streaming platform Disney+...
... Not even mentioning Baby Yoda 🤑
Chapek intends to continue Iger's legacy: “Right now the course that Bob has laid is one that we fully intend to follow and I think will pay dividends to shareholders for years to come,” 😇
Let's see if those words are reassuring enough...
General Electric cut about 78,000 employees last yearPublished by Terence Mahier | Source
General Electric cut about 78K employees last year according to its newly published annual report, leaving it with around 205K workers at the end of 2019. To give you an idea, it's the lowest headcount for GE since WWII 😧
The new CEO Larry Culp has been praised for trying to put back GE on the right track by selling big chunks of GE's business for cash. "Our work is by no means finished, but we are on the right path," he said 🤞
The stock gained 40% in a year, showing investors' trust is slowly but surely recovering.
GE's stock is highly correlated to the Dow Jones and has suffered recently from the Coronavirus fear... 🤔
How will the S&P 500 perform during the CoronaVirus Outbreak?Published by Terence Mahier | Source
It took some time but it seems like the market is finally waking up and getting seriously anxious about the consequences of the Coronavirus on the World Economy 📉
Last week, when Apple adjusted its growth numbers for Q1 2020 because of production issues in China, we could already detect signs of fear and weaknesses in the US. market.
The weekend news did not help with a major spread of the virus in South Korea 🇰🇷, an unexplained outbreak in Italy 🇮🇹 and a slightly worsening situation in China 🇨🇳
What do you think? Is it the beginning of a serious market correction, or will investors quickly flip back to optimism? 🤔
Wells Fargo is close to reach a settlement over its Sales scandalPublished by Terence Mahier | Source
In 2016, Wells Fargo revealed that it had opened 2M bank accounts in customers’ names WITHOUT their knowledge while charging other customers unnecessary fees for auto and home loans... The reason for that? Virtually boost sales numbers and collect hefty bonuses 😡
The DOJ & the SEC (the market Cops) will announce TODAY the amount of the penalties Wells Fargo will have to pay to settle this case ⌛
Since 2016, the company already spent around $4B in fines, and it has provisioned $3.1B for the final settlement due today.
If the fine is less than $3.1B, the market will celebrate. If it's more, the market will punish 🧘♀️
Morgan Stanley has agreed to buy E-Trade in a $13 billion all-stock dealPublished by Terence Mahier | Source
Morgan Stanley is buying the Broker E-Trade for $13 billion 💥
Okay, why is it a big deal? Because Morgan Stanley is an investment bank focusing on big accounts and wealthy individuals. Buying out a consumer service like E-Trade shows a willingness to start building offers for the "average Joe" 🤗
E-trade, with 5.2 million client accounts and over $360 billion of retail client assets, will be adding to Morgan Stanley’s 3 million client accounts and $2.7 trillion of client assets. Read that again.
Not quite sure why, but the investors of Morgan Stanley seem to not appreciate the news as Morgan Stanley fell 4% in pre-market...
Groupon just published bad Q4 2019 results and is shifting its focus on "experiences" rather than "goods"Published by Terence Mahier | Source
Groupon just published bad Q4 2019 results sending the shares to -25% in pre-market trading 💥
Groupon is a marketplace of deals and promotions made to "lure" you into trying new products & services thanks to aggressive discounts 🤑
They reported $612M in revenue instead of the $709M that analysts were expecting. Recognizing the failure to find a growth trajectory, the CEO also said that the company has a masterplan aiming to ditch "goods" to focus on "experiences" - allowing “a stronger Groupon to emerge” in 2020 💪
Will investors further punish and lose faith in Groupon or realize that they over-reacted? 🤔
Apple shares slide after warning on the impact of the CoronavirusPublished by Terence Mahier | Source
You must be tired of hearing about it, but the Coronavirus is sticky news 😷
Apple shares fell over 3% in pre-market today after it warned that it does not expect to meet its own guidance for Q1 2020 because of the impact from the coronavirus on production 😱
Guidance? It's basically a "roadmap" that Apple commits to at the beginning of each quarter. Apple is basically saying here "we told you it will be fine, but it won't" 😇
All its manufacturing facilities have re-opened in China but are “ramping up more slowly than we had anticipated” leading to “iPhone supply shortages”
It's now a game of fear and expectations 🤔
Facebook is launching a copycat version of PinterestPublished by Terence Mahier | Source
Let's finish the week with some lighter news 😇
Facebook just silently launched a new app called "Hobbi", and the problem is... It really looks like a copycat of Pinterest. The app is a social media enabling you to share photos and other materials organized by topic 🖼
Facebook already has a reputation for "stealing" the ideas or features of its competitors including Snapchat or Instagram before they acquired it.
Earlier in Jan., we mentioned that Pinterest took back its position as third-biggest Social Network in the US 🏆
Pinterest shares fell 4% after a journalist spotted the new app - do you think investors should worry? 🤔
Alibaba reports Q4 2019 Earnings amid lower number of new cases of CoronavirusPublished by Terence Mahier | Source
Alibaba, a Chinese conglomerate (with activities in eCommerce, Payment, Search, etc.) is reporting its Q4 2019 earnings tomorrow before the market opens 🤑
Alibaba has suffered from the Coronavirus outbreak in the past few weeks, losing almost 10% in Jan. because of the Chinese economic slowdown. However, the stock has almost completely recovered in Feb. since the number of new cases is slowing down 🥳
Alibaba hit a record $38.4 billion on "Single day" in November, beating in one day the revenue of Amazon online sales for the whole quarter 🤯
Things are looking good, but expectations are high.
Hold your trade until tomorrow 🤞
Lyft to report Q4 2019 EarningsPublished by Terence Mahier | Source
Lyft will report tonight its earnings for Q4 2019 ⌛
Last week, we told you that Uber will reach profitability sooner than expected. A milestone very welcomed by investors who are tired of the "profit-less" growth of companies like Uber & WeWork... 😡
Funny enough, the news had a positive trickle-down effect on Lyft that soared by almost 10% in the past 7 days 🤔
Why? Because the market is judging the progress of the industry as a whole.
But tonight, it will be Uber Vs. Lyft - no "industry effect" nor friendly competition.
The wind is already blowing in favor of Lyft, but it could quickly backfire as expectations are high 🦄
Apple may postpone the launch of a cheaper iPhone due to the coronavirusPublished by Terence Mahier | Source
Apple may postpone the launch of a cheaper iPhone due to the coronavirus 😷
Apple supplier "Foxconn" got approval to resume production at a key China plant after being forced to shut it down... But only 10% of the factory’s workforce has been allowed to return so far 💨
Meanwhile, Apple's arch-nemesis Huawei said last week it had resumed production and operations were running normally...
To give you an idea of the pressure on production: Foxconn, which makes devices for global electronics firms, has built its own production lines to make masks for its hundreds of thousands of employees 🤯
Uber might be profitable earlier than plannedPublished by Terence Mahier | Source
Uber just announced it will reach profitability sooner than expected 🤑
The company is known for its HUGE losses due to massive R&D investments, lawsuits, and aggressive growth strategy 🔥
Uber still expects to lose more than $1B this year, but the company said it is on target to be profitable on an adjusted basis by the fourth quarter of this year (instead of a previous target end of 2021) 💪
Wait... How can they lose money and be profitable?
Because Uber is talking about EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization)...
Will investors believe in the promise? 🤔
Twitter beats estimates in revenues & user growthPublished by Terence Mahier | Source
Yesterday, Snapchat got slammed (-14%) after reporting weaker earnings than expected and kept falling during the day 🚑
Today, Twitter is taking the opposite direction thanks to a higher than expected Revenue and "Monetizable Daily Active Users" - basically, 152 million people per day are exposed to advertisements on Twitter, generating revenue of roughly $1B last quarter 🤑
Investors also praised the decision to ban political ads prior to the US Elections, unlike Facebook...
The question is whether Twitter will mirror Snapchat move yesterday and keep rising after an initial +9% this morning - or will it correct its trajectory? 🤔
Snapchat misses expectations of the marketPublished by Terence Mahier | Source
Snap just released its Q4 2019 earnings, and the company missed on revenue expectations, sending shares plunging as much as 14% after the bell yesterday 🤯
What went wrong? Actually, it didn't go so bad. Snap reported revenue of $561M, up 44% compared to last year. Analysts were expecting Snap to report $563M in revenue... $2M short - Potayto Potahto? 🥔
Despite stiff competition from Facebook and TikTok making investors nervous, Snap has managed to continue growing its user base, while ramping up ad sales by putting a focus on young users and augmented reality technology.
Is it too much of a punishment or a real sell-off? 🤔
Tesla "Bubble" is going through the roofPublished by Terence Mahier | Source
You're wondering why some of the players on Newspill are crushing the leaderboard lately? Partly because they are holding Tesla shares which are literally going through the roof: +146% in 3 months 🚀
Why is it raising so much? 🤔
Because we entered a process called "reflexivity" or "positive feedback loop": a self-reinforcing effect of market sentiment, where rising prices attract more and more buyers 📈
Do you like bubbles? 🍾
The last bubble you might have heard about is the Bitcoin. Funny thing, the evolution of Tesla's stock price looks a lot like it...
So, will you ride the wave or take a contrarian investment strategy 🐑
Coronavirus crisis is hitting China hardPublished by Terence Mahier | Source
Waking up today was rough? Well, in China, Traders woke up with a huge hangover as the market reopened after a long weekend break due to the Chinese New Year...
-8% at the opening for the main Chinese Index 😵💨
The airline sector is feeling the immediate impact of the Coronavirus ✈️
American Airlines, for instance, said Friday that all flights to China are canceled until further notice, due to pressure and concerns from the Union of Pilots 😮
Trump also signed an order temporarily barring entry to foreigners who had traveled to China within the past two weeks...
And of course, the demand for tickets is slowly dropping 📉
IBM CEO Ginni Rometty steps downPublished by Terence Mahier | Source
The emblematic CEO of IBM Ginni Rometty is stepping down and being replaced by Krishna, the head of IBM’s cloud business ☁️
The market seemed happy with the news (+4%)
Investors did not like Ginni? It's not that simple 🤓
IBM has 2 separate businesses: its older, legacy businesses, including hardware and services, and its cognitive/cloud business, which includes Artificial Intelligence.
Ginni might represent the "old IBM" for investors, though she terminated or sold many unprofitable legacy businesses and organized the acquisition of RedHat (a cloud services company for Linux).
Over-reaction or real hope for a new strategy? 🤔