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Anybody waiting on AMZN to come back may as well be waiting for the tooth fairy

Nov 03, 2022

Good morning!

‍The markets are down ahead of the Fed’s next follies. The bet is that Team Powell will raise rates another 75 basis points (0.75%) then pause.

Don’t waste your time or energy.

The only thing that matters is that YOU are prepared for what happens next and that you own the right stocks.

If the markets drop, you can go shopping. If the markets pop, you can take profits.

There’s always a path forward!

Here’s my playbook.

Private payrolls +239k, wages +7.5%

ADP reports that companies added 239,000 positions, 22.6% higher than the 195,000 expected by Dow Jones, up a skitch from last month. Most of the gains came from hospitality and leisure, which added 210,000 positions as wages jumped 11.2%. At the same time trade, transportation, and utilities jumped 84,000. (Read)

Takeaways: 1) Substantially ALL the hiring came from services-related industries. Sectors making stuff lost 20,000 manufacturing jobs. And 2) businesses with between 50 and 250 employees added 241,000 jobs proving, once again, that small businesses are the backbone.

Ergo. The economy isn’t recovering equally but spending continues.

Maersk: “that’s as good as it gets folks”

Global shipping company Maersk controls about 1/6th of all shipping worldwide. And the company just reported numbers. Most investors are focused on the fact that Maersk reported record profits yet confused by the fact that the stock is down in pre-market trading. (Read)

What really matters. CEO Søren Skou said the company believes it has seen “peak earnings” from its shipping business and that things are going to slow down in Q4. Translation, this is as good as it gets, folks.

Ruh-roh. Order your Christmas gifts now or you may not get ‘em and continue to expect higher inflation, especially for goods that arrive via boat. Which at this point is 90% of the world’s stuff according to the OECD. (Read)

Putin does a 180 on grain

Russian leader Vladimir Putin has apparently done a 180 on grain based on reports that Russia will rejoin Ukraine in a grain deal to keep exports flowing after Ukraine reportedly agreed not to attack Russian naval assets in the Black Sea Shipping lanes. Grain prices are down a skosh as you’d expect. (Read)

Putin isn’t stupid. I expect Putin to press the advantage and use the non-aggression corridor to stage, hide and otherwise ship wartime materiel. Or conduct a false flag attack that allows him to renege at a time of his choosing … probably right before he rains a crap-ton of missiles on Ukraine which continues to kick his asteroids.

Defense stocks and missile defense systems builders are the play here. I’ve recommended two of the leading choices in One Bar Ahead® and they’re performing as expected. Well. Upgrade to Paid

Anybody waiting for AMZN to come back may as well be waiting for the tooth fairy

Amazon has suffered its 5th straight losing day and the stock is down 42% YTD. Things are so bad that Amazon’s now dropped outta the trillion-dollar club. (Read)

No surprise. Consumers are spending less on “nice to have” schtuff and concentrating on “must haves” like – oh, I dunno – food, medicine, diapers and more. I told One Bar Ahead® readers to avoid Amazon last January, BTW.

Amazon may not be dead money, but my sense is that it’s close. The days where you can add a digital overlay to an otherwise linear business model are over.

Keith’s Corner: Anybody who’s relying on Amazon to come back may as well be waiting for the tooth fairy. The biggest profits will come from companies that are helping the world move forward like, not coincidentally, the one I’ll be recommending Friday. Upgrade to Paid

What Yum’s earnings really point out

Yum Brands just reported sales increased 5% crushing analyst estimates of 3.2%. (Read)

Why this matters. There comes a time in everyone’s lives when you hit a limit as to what you can afford. That’s why fast food stocks can make sense at moments like the present. They’re convenient, quick, and seemingly provide a lot of “value” for the money. Actual nutrition is debatable, but I’ll be the first to admit I’m always down for a Big Mac.

I think Uncle Ronald makes more sense.