Higher Rates vs. Q3 Earnings

Good Morning Everyone!

Remember, in the short-term there's always a reason to sell. But we’re not short-term players.

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Price as of 4 pm EST, 10/19/22; % YTD

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MARKET UPDATE

10Y yield: hit year-to-date highs

Fed Pivot? Maybe Pause?

• Bullard expects the Fed to end its front loading of hikes by next year

U.K Prime Minister Liz Truss is stepping down as UK Prime Minister

• Shortest-serving leader in British history

Crude 86 +1%

• Crude higher on news the Chinese government debating whether to reduce time people visiting the country have to spend in quarantine

• Investors called Biden’s plan to buy oil at $70 to return to the SPR “Biden Put”

• Energy companies can invest knowing they will get at least $70

Tesla TSLA    

• Elon: “demand “a little harder” near term but Tesla not concerned

• Elon talked about recessions in China and Europe (U.S. pretty good)

• Auto gross margins missed

Union Pacific UNP     

• $3.19 vs. street $3.06

• Reducing fiscal year carload growth from 4-5% to 3%

• As Elon said: “demand/volumes a little harder near term”

• CSX reports tonight

Netflix NFLX

• Media speculating the logic of a Netflix-Microsoft combo

• Microsoft could easily afford Netflix, $120 billion vs. Microsoft’s $1.7 trillion market cap

• Netflix’s co-founder, Reed Hastings, is a former member of Microsoft’s board

• Microsoft’s president, Brad Smith, is a Netflix board member

Taiwan Semiconductor TSM

• Considering building a manufacturing plant in Japan to reduce geopolitical risk

• Yara (fertilizer)                  +7%

• Nutrient should have a good day today

• Yara reported positive earnings results

• Special Dividend and to consider further cash returns including share buybacks

Hermes               

• Luxury consumer doing just fine

• Q3 Revenue rose 24% at constant currency

• Europe sales +12%, Asia sales +32%, America +18%

• All products up double-digit except Perfume, Watches +55%

• That $7,000 Hermes Birkin Bag is heading toward $8,000 in 2023

Earnings

• IBM IBM +4%

• Crown Castle CCI in-line                  

• Lam Research LRCX

• Kinder Morgan KMI

• Las Vegas Sands LVS

• PPG Industries PPG -3%, Q4 EPS guide below the Street

• Danaher (NYSE: DHR +3%, raises fiscal sales guide

• Philip Morris PM

• Union Pacific UNP

• AT&T T

• Blackstone BX

• Marsh & McLennan MMC

• Freeport-McMoRan FCX

CRYPTO UPDATE

FTX FTT/USD recovery plan for Voyager

• Customers could recover ~72% of funds

• FTX would pay $51 million in cash, move customers to its platform

• Voyager bankruptcy payout plan needs approval first (December)

• Voyager attorney: FTX providing “the only viable alternative”

• FTX won bid for Voyager’s assets last month ($1.4 billion)

Plaid launches first web3 product

• “Wallet Onboard”

• Simple integration to +300 Ethereum wallets

• Exploring more product offerings in web3 space, other blockchains

• Replicating existing products in web3 (ex: identity verification)

Bitcoin Fear & Greed

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