Hi everyone –
Some of you may recognize me from TikTok – my name is Austin Hankwitz (@austinhankwitz) and I’ve recently joined forces with Justin so acouplecents.com can provide as much value to its members as possible.
Have a question for me? Drop me a DM.
With that being said, as my dude @KEEMSTAR might say, let’s get right into the news!
U.S. Stocks Rally After Worst Week in Almost 2 Months
U.S. stocks are rallying today on hopeful news around a potential COVID19 vaccine driven by positive results from Moderna’s ($MRNA) early human testing. Although a vaccine is surely welcomed, analyst Fawad Razaqzada says the market for months now has already priced one [a vaccine] in as well as a full economic recovery. “I think we’re getting close to levels where people questions if equities are overvalued again.”
Federal Reserve Chairman Jerome Powell cautioned Sunday that the US economic recover could take more than a year. “The unemployment rate is likely to keep rising through June.”
What are your thoughts? Are we getting too frothy again? Drop your answers in the comments below and let’s discuss.
JO: I still don’t believe that we see a vaccine until at least Q1 2021. My gut feeling is that the market is in that halfway point – if testing/cases/therapeutics stop the spread and we can reopen safely, we can return to previous highs. If we see extended joblessness, weak recovery, and more importantly, a second wave, I think we can see a retest of March lows. At a certain point, one has to be right about the future. My bets are on a second wave and weak recovery, unfortunately
Uber Cuts 3,000 More Jobs and Shuts Down 45 Offices
This is their second round of layoffs in 2 weeks totaling ~6,700 people aka 25% of their total workforce .. oof!
Their first round was announced about 2 weeks ago in an effort to reduce fixed-costs by ~$1B (driven by lowering marketing expenses, deferring CapEx, and staff layoffs) but I guess that wasn’t enough to offset their -80% YoY revenue loss in their ride-hailing business segment driven by COVID19 stay-at-home orders.
Y’all think Uber will bounce back from this? In my opinion, I think a meaningful amount of people will be hesitant to hop back into a stranger’s car again (germs) in the near future.
Peet’s Coffee Owner Brews Up a $2.2B IPO
IPO? What’s that?
It’s when a company goes “public” for the first time aka “initial public offering” – this means normal folk like you and me can buy shares in their business. Just like we can buy shares in Apple or Disney.
Hold up – you’re telling me a company is really about to go public during a pandemic?
Yep! And they’re not sweating it either because ~80% of their coffee is sold for at-home consumption, a market that has held up pretty well during the lock downs. Ground coffee sales in grocery stores and similar channels jumped +11% in April and single serve coffee sales rose +16%.
Steve Pollard, a coffee market analyst at Marex Spectron says “Coffee demand is notoriously inelastic. People tend to keep drinking coffee through thick and thin” – this actually makes sense because the caffeine is addicting.
Not sure what their stock will be priced at just yet, but I’m probably going to purchase some as a long term investment.
Coronavirus Brings Beer Drinkers Back to Bud Light
When the apocalypse came, Americans bought Bud Light.
Big beer brands had been losing market share for years as more people were turning away from Bud Light, Miller Lite, and Coors Light and toward local craft beers. But with restaurants and micro-breweries closed for the last ~2 months, a meaningful amount of these craft beer companies have been put out of business. (On-site craft beer sales down -70% YoY in April)
With grocery stores still up and operational, shoppers can turn to mainstream beer brands easily – data showing shoppers have been purchasing beer in 24/30-packs so they can make fewer trips. Add to the equation these mainstream beers are usually considerably cheaper than your local craft beers and you’re looking at an easy market share grab.
What are you guys drinking? I’ve been deleting Corona Extras on the weekends lately like it’s my job.