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Winners & losers as FedNow debuts

Jul 21, 2023

Good morning! 👋

Futures are up after the Dow registers the longest winning steak since 2017.

Oh boy, my tummy is giving me away... “streak.” 🤦‍♂️

Is anybody surprised?!?!

Stay focused.

73% of companies that have reported so far have exceeded expectations—but, cautions CNBC, “that beat rate is below a three-year average of 80%, according to The Earnings Scout.”

Sigh.

Watching major news headlines these days is like watching a 5-year-old try to explain himself after getting caught with his hand in the cookie jar: “Yeah, but…”

Stay focused on the world’s best companies and what they’re doing.

Your wealth will thank you.

Here’s my playbook.

AI “pledge” reminds me of a hi-tech frat party

Seven top AI companies—including Amazon, Anthropic, Google, Inflection, Meta, Microsoft, and OpenAI—all signed a set of voluntary commitments intended to make AI safer, more transparent, etc. (Read)

Great idea, but the situation seems like a frat party to me.

If you’ve ever been to one, chances are you know what I mean.

The “Greeks” are partying in all their finery while the leather-clad outsiders are holding a kegger in the garage next door. Sooner or later, the party gravitates.

Don’t get me wrong.

AI guidelines are great, but the bad actors never quite seem to care about playing by the rules. Not at frat parties, not with guns, not with self-checkouts, and certainly not in global markets.

Meanwhile, this agreement is a Who’s Who of companies at the top of the investing food chain.

I know which ones I want to own and which I don’t.

You?

Air cargo is plummeting, but that’s NOT a good thing

Airline cargo revenue has fallen off a cliff and is down roughly 40% YoY, with Delta, United, and American all reporting similar data. This is a big deal because roughly 50% of the world’s air cargo is tucked into passenger planes underneath ya.

CNBC reports, “Now, with travel roaring back and demand for air cargo waning, those rates have fallen and so too has cargo revenue for the major carriers. What’s that saying? What goes up must come down?”

Who writes this stuff?

If cargo revenue is falling, three guesses what’s gonna skyrocket as airlines try to make up the difference.

Ticket prices.

Airlines are a sucker’s bet or at best a trader’s hunch.

No thanks.

Winners & losers as FedNow debuts

The Fed has launched FedNow, an instant payment service that it says will make everyday payments more convenient and faster. So far, 35 early adopters, including JPMorgan Chase and Wells Fargo, two of the four largest banks in the US, have signed up. So have another 16 institutions providing services for banks and credit unions. (Read)

Naturally, the Ministry of Whitewash and the ABA both say this’ll be great for consumers, particularly as the system is integrated into websites, online banking, ATMs, and more.

Same thing as airline seats and cargo…

If you think banks will offer this service for free, I’ve got a bridge to sell you.

Meanwhile, this makes Capital One interesting. The company has 39,000 ATMs nationwide, and those are a logical source of instant “profits” as FedNow works its way into the system. I’m also wondering about this as a source of additional “float” for so-called “pay-day lenders.”

Hmmm.

Oh, and BTW… FedNow may obviate the need for a CBDC.

Threads not a “Twitter killer” after all

Zuck’s Threads platform—just a few weeks ago celebrated by media outlets—already lost half of its users in a little more than a week, according to the New York Post. (Read)

Picking a cage fight with Elon Musk is not a good idea.

Meanwhile, reports suggest that everyone who gleefully jumped to Threads—many simply because they “hate Musk”—have just had their data raked on an unprecedented scale.

El Zucko strikes again.

Next up: a new wave of cybercrime as that very same data gets aggregated.

CRWD, anybody?

Pfizer: Poised to pop?

Pfizer’s Rocky Mount, North Carolina plant was obliterated in a tornado that ripped through the area on Wednesday. (Read)

Having been through my share of twisters over the years, take my word for it... they’re scary and they stink. My heart goes out to everyone in the area who now has to put their lives back together.

The plant produces nearly 30% of all sterile injectables used in US hospitals as well as other products like anti-infectives and syringes. Or did.

Pfizer stock has held up from the news... but I’m watching closely, for the simple reason that one of the most basic laws of economics is that falling supply + rising demand = higher prices.

PFE could actually bounce from here, which is something that could catch many by surprise.

As I noted yesterday during a conversation with the fabulous Charles Payne and my friend Scott Martin, CIO at Kingsview Wealth Management, it’s a no-brainer. (Watch)

Meanwhile, I’m loving the divvies.