Jared Watson's avatar
$10.8m follower assets
SentinelOne $S at the $BAC Global Technology Conference

Catching up on some conference appearances for the companies that I follow, and I thoroughly enjoyed this one with SentinelOne's CFO and VP of Investor Relations. Good color on win rates vs Microsoft EDR and Crowdstrike, as well as how leadership is seeing Attivo and Scalyr/Dataset fitting into the product portfolio moving forward.

I won't do a full summary for this one but I'm happy to answer any questions about takeaways.
Conor Mac's avatar
$325.5m follower assets
What are Tomorrow's Consumers Doing?
Piper Sandler issued their Spring 2022 'Taking Stock with Teens' report not too long ago, with the aim of investigating trends amongst US teens. with respect to commerce, payments, fashion gaming, and more.

Here are 5 of the more interesting takeaways.

TikTok is now the #1 favourite for teens at 33%, with Snapchat taking a passenger seat (31%), and Instagram riding in back at 22%.

In terms of actual usage, the top three are reversed, with Instagram commanding the majority of monthly active usage. $SNAP $META

Athletic apparel is growing in popularity as teens' favourite apparel brands.

Nike continues to be number one, taking up a 29% share, but Lululemon is growing in mindshare and ranking. $NKE $LULU

As cable continues to dwindle (down 8% in the last 4 years), Netflix and YouTube take up an equal footing in terms of teens' daily video consumption, both at 30%. $NFLX $GOOGL

Teens predominantly use Apple Pay as their smartphone payment system, followed by Venmo, Cash App, and PayPal. PayPal does lead in BNPL penetration, however, followed by Afterpay, a Square company. $SQ $PYPL $BAC $AAPL $WFC $JPM

For greater context, 32% of teens surveyed do not have a traditional bank account. Cash remains the most popular payment mechanism, followed by debit cards, credit cards, checks, and BNPL accounts for just 5% of monthly usage.

Findings show that 26% of teens own a VR device, but that 48% of owners seldom use it, and only 5% are frequent users.

Of those who don't own one, 32% (the majority) are not interested in purchasing one. $META

iPhone ownership remains close to record highs with 87% owning one, with 87% suggesting their next phone will be an Apple one $AAPL. Ownership of Smart Watch reaches 35%, at record highs. Plans to buy an apple watch decline. $AAPL

Lastly, for laughs, because the opinion is about as useful as a chocolate fire escape, teen economists believe the economy is set to worsen (71%), compared to 46% last spring.

That was more than 5, but thanks for coming to my ted talk.

The full report can be found here:

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Conor Mac's avatar
$325.5m follower assets
Bank of America Consumer Report
Bank of America's $BAC latest consumer report (titled, 'Going on a bear hunt') had some interesting data to observe about the American consumer. They state that they "remain cautiously optimistic about for the consumer".

Key Points:

• Data shows growth in consumer spending, but inflation is challenging household purchasing power. Total credit and debit spending was up 9% YoY in May, with total transactions up 7%.

• Despite bearish signs for macro, BAC say they are "struck" by strong momentum on service sector spending.

• Household median checking and savings are higher than pre-pandemic, and households don't appear to be relying on credit cards to meet rising bills.

Rising Prices Eroding Spending Power

Bank of America's aggregated credit and debit card spending was up 9% YoY in May. Within this, credit card spending was up 16%, while debit card spending was up 4% YoY. Overall Bank of America total payments data growth (across cards, Automated Clearing House (ACH), Wires, Billpay, peer-to-peer (P2P), cash and check), was 6% higher YoY in May, influenced by the timing of last year’s tax payments. Total transaction volumes were up 8% YoY.

"Looking into card spending, in the 28-day period ending May 28 Bank of America card spending (credit and debit) per household was up 4.3% year-over-year (YoY). This was a moderation from the 6.8% YoY for the month of April. It is noteworthy that the spending growth rate is less than the current rate of major inflation measures in the US, namely the Consumer Price Index and Personal Consumption Expenditure inflation, which stood at 8.3% YoY and 6.3% YoY, respectively, in April. This suggests that inflation-adjusted spending (“real” spending) growth for households has slipped into negative territory."

They state that "Over the same period in 2021, the level of card spending was rising fairly sharply, reflecting the bounce-back following the easing of COVID-related restrictions as well as the impact of stimulus payments. The impact of both of these has tended to depress the year-on-year growth rate of card spending for the 28-days to May 28. As Exhibit 1 confirms, the current level of credit and debit card spending per household remains well above the 2019 level, and the current level is tracking broadly flat over recent months."

Consumer sentiment has dwindled, however, as the focus is drawn to the inflationary outlook and the Federal Reserve's rate hikes. "Exhibit 2 illustrates that consumer sentiment has been declining since around the middle of 2021, though the deterioration is considerably worse on the University of Michigan’s sentiment measure than the Conference. Board’s confidence measure. Both measures are similar but not identical in design and it could be that the impact of inflation is having different effects here. Specifically, the University of Michigan measure is more sensitive to financial conditions while the Conference Board measure is more related to labour markets."

Bank of America suggests that rising gas prices are one factor that weighs heavily on consumer sentiment, arguing that "Gas prices are of course highly transparent for consumers and this was likely one reason for consumers becoming less optimistic. It appears that the impact of these higher gas prices is felt by the lower-income households in particular".

A Tale of Two Types of Spending

"As gas spending takes up a larger share of consumer wallet, other areas of spending appear to be coming under increasing pressure. It appears durable goods spending has been largely taking the hit from higher food and gas prices. As Exhibit 4 shows, durable goods spending, which includes furniture, electronics and home improvement, was down 11% on a YoY basis for the seven days to May 28."

"But while goods spending appears to have weakened as higher inflation bites, the same is not true so far for services spending. This is important because over 60% of consumer spending is on services. Exhibit 5 illustrates the YoY growth rates for the 28
days to May 28 for a number of leisure categories. All growth rates remain very strongly up compared to a year ago. Of course, some of this will reflect the re-opening of the economy and the switch back into service spending and away from goods. Looking by the income distribution, the % YoY rates for services spending are the strongest for the higher income group (households with annual income >$125k) who has had the biggest pent-up demand for travel and entertainment.

Not all service sector spending takes place using debit or credit cards. Exhibit 6 shows a selection of service sector related spending using ACH/Wires spending channels. Some of the change over this period may reflect changes in the way people are paying for things – using fewer checks for example. But the big picture is that compared to May 2019, childcare, professional services, utility payments and a range of other services spending are all showing very strong growth."

Consumer-Facing Cross Currents

"The overall consumer outlook is difficult to read, as there any number of cross winds currently. It is clear that ‘bearish’ sentiment has increased. And on the downside higher inflation presents households with a real challenge, along with any slowdown in the overall economy as the Fed hikes rates likely to impact households. But on the upside, the labor market is continuing to generate strong wage growth, which can at least partly compensate for higher inflation. And when we hunt through the data we still see positive momentum in services spending.

Additionally, when we look at the current median deposit levels in savings and checking balances, it appears that households continue to have higher ‘buffers’ relative to before the pandemic. Another favourable sign is that the share of credit card spending per household to total card spending per household remains around 2019 levels. In other words, it does not appear that households are having to spend more on credit cards to pay rising
bills. If we only focus on households with annual income less than $50K, we also find that credit card spending as a share of total card spending was around the same level as in May 2019 (Exhibit 9)."
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sam stribling's avatar
$108.7m follower assets
The Macro is Running the Show
TLDR at end

This memo maybe unpopular but I am going to call it how I see it and share my perspective with you all on the current market situation. My intent is to take an objective look at our current state of affairs and how I intend to navigate it.

Here we go!
  • The Macro is greater than the Micro - while there are still fantastic companies out there and I agree many are on sale from a historic valuation perspective. The way I see it is, until we get through these Macro headwinds.. it might just not matter. What to do about it? Stick to your strategy, especially if you are a long term investor and pay attention to the businesses that are getting beat up yet are sitting on strong growth trends. $NVDA is a prime recent example that comes to mind.
  • Inflation is a real problem - Specifically in Energy and Food costs. Unfortunately, I do not see much relief coming for either of these sectors. As the meme above jokingly states, the current global economy runs on cheap hydrocarbon energy. While many feel carbon neutral goals are attainable within the decade, the realist in me doesn't see this as truly attainable. I believe the transition away from hydrocarbons will take decades. We need truly available and viable alternatives at cheaper (unsubsidized) costs for this to really happen. On food, grains are the major problem. The geopolitical environment has caused large producers, Ukraine and Russia, to dramatically cut future supplies leading to many countries to start locking down their domestic supplies. What to do? not much, this might simply be something that we will need to weather. Consider buying energy companies and possibly large food suppliers like $CVX $XOM $TELL (my personal play) and $CAG or $GIS.
  • The Fed Has One Tool Left - Raising Rates. The FOMC minutes yesterday were preparing us for a more hawkish approach and they will be using this tool and soon. The question is, will this truly combat inflation that is based on rising input costs not a hot economy. What to do? Consider buying banks $BAC is my personal favorite.
  • We are already in a Recession - I know it is not official yet but in my experience when the narrative turns this way, we are already there. It simply takes time to "confirm" that we are in a recession. What to do? Focus on raising cash, adding a bit more from your day job to your 401K or IRA's and take advantage of the downturn. Recessions are natural and happen periodically.

TLDR: The macro environment is in the driver seat. Until we figure out inflation, specifically energy and food it is going to be a tough market to navigate. The FED is going to raise rates to fight it but this will likely just confirm that we are in the midst of a recession. Despite these headwinds, if you are a long term investor do your best to raise cash and buy quality that has been beaten up. Focus on companies with real earnings and consumer staples that are capable of weathering the storm.
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For the comment about already being in a recession I would ask your comments on the discrepancy between GDP and GDI (Gross Domestic Income), which is up over 2% QoQ vs GDP at -1.5%. Could GDP numbers be too strongly negative because of a sharp rise in net imports to meet inventory demand rather than a more structural weakness? Everywhere I go in my state all the small businesses still have signs saying they're hiring
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Trade with Alchemy's avatar
$10.3m follower assets
$BAC Short Idea
Not a single ticker popped up on my bullish scanner for next week. However, numerous banks popped up on a relative weakness scanner. After analyzing a few banks, $BAC seems interesting for a short position.

I am looking to enter short position on any pop as long it is below the pivot point.
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The Devastation Continues
Here are a ton of stocks at lows and appear to be headed lower:

$JPM - JPMorgan Chase & Co. - Banks - Diversified - $386.69B

$BAC - Bank of America Corporation - Banks - Diversified - $317.55B

$ASML - ASML Holding N.V. - Semiconductor Equipment & Materials - $257.15B

$VZ - Verizon Communications Inc. - Telecom Services - $221.35B

$NKE - NIKE, Inc. - Footwear & Accessories - $211.96B

$ADBE - Adobe Inc. - Software - Infrastructure - $204.90B

$CRM - Salesforce, Inc. - Software - Application - $187.74B

$PYPL - PayPal Holdings, Inc. - Credit Services - $112.45B

$BLK - BlackRock, Inc. - Asset Management - $106.91B

$WBD - Warner Bros. Discovery, Inc. - - Entertainment - $58.36B

$ILMN - Illumina, Inc. - Diagnostics & Research - $53.47B

$ADSK - Autodesk, Inc. - Software - Application - $44.78B

$A - Agilent Technologies, Inc. - Diagnostics & Research - $38.87B

$ALGN - Align Technology, Inc. - Medical Devices - $33.79B

$COIN - Coinbase Global, Inc. - Software - Application - $33.18B

$STT - State Street Corporation - Asset Management - $27.92B

$TWLO - Twilio Inc. - Internet Content & Information - $24.68B

$HUBS - HubSpot, Inc. - Software - Application - $20.53B

$SWKS - Skyworks Solutions, Inc. - Semiconductors - $20.04B

$PAYC - Paycom Software, Inc. - Software - Application - $19.25B

$KMX - CarMax, Inc. - Auto & Truck Dealerships - $14.95B

$DPZ - Domino's Pizza, Inc. - Restaurants - $14.26B

$PINS - Pinterest, Inc. - Internet Content & Information - $14.23B

$ETSY - Etsy, Inc. - Internet Retail - $14.15B
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THIS is what i’m talking about, very aesthetically pleasing post, thanks for putting this together 💪🏼
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