McDonalds Adult Happy Meal > Fed Day

🌞Buenos dias🌞

It's Fed decision day 🎊. The Federal Reserve is expected to raise the Federal Funds Rate by 25bps (or.25%), a decrease from the 50bps raise in December and the 75bps hikes earlier last year. We can infer that the Fed remains concerned with price pressures (aka inflation) but thinks it appropriate to slow down the rate increases, which has put pressure on the real economy (e.g. credit card balances, delinquent auto loans etc.)

Oil settled near a three-week low on a weakening dollar (remember, oil, dollar, fed-- always connected).

Let's jump in.

EARNINGS 💵

Reporting this week:

Meta, Peloton, Amazon, Apple, Alphabet, Qualcomm, Eli Lilly

🧿 Our equation for a newly formed bull market is = strong earnings + resilient consumer behavior + steady macro environment. So far earnings are looking fairly strong and consumer sentiment/behavior is coming in better than we anticipated for the end of 2022.

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McDonald's beat Q4 EPS and revenue estimates on a second-straight quarter of increasing traffic as inflation-strapped consumers chose cheaper eats (CNBC)

🧿 While competitors increased prices by 10-15% in previous months to combat inflation, Mcdonalds lowered their prices by 4%. The company is winning market-share during difficult times and leaning on celebrity partnerships and product innovation to accomplish growth against the odds. The adult Happy Meal has me itching for a road-trip excuse.

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Electronic Arts: The video-game maker gave a disappointing outlook for its current quarter and said it will delay the launch of a highly anticipated Star Wars game. Shares fell 11% before the opening bell. (WSJ)

🧿 EA has been a disappointing ride for its clients, investors, and employees. Despite it's carousel of massive gaming franchises shares have remained flat over the past 6 months (although up 5% year-to-date).

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Mondelez International: The maker of Oreo cookies reported that sales climbed 14% in the final quarter of 2022 as people bought more sweets and candies despite higher prices. Shares rose 3.2% premarket. (WSJ)

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Advanced Micro Devices: The chip maker reported a 98% drop in fourth-quarter profit as sales linked to PC clients were cut in half. The results were still better than analysts had expected, sending shares up 3.3% premarket. (WSJ)

🧿 We said it the other day, we'll say it again. Chips are the new oil. Expect volatility but the companies that can consolidate the next gen of processising will secure their names in the history books of integrated commodities providers. The demand for silicone is only increasing with EVs, a rising global middle class, smartphone adoption etc.

TRENDS🕺

An Oxford student was sentenced to 4.5 years for stealing over $2.4M in a cryptocurrency scam (OX)

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DIGITAL ASSETS ⚡️

Binance's offshore exchange tapped the same DC lobbyists as its US affiliate, despite claims of indepence (FT)

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MACRO 🌎

Mexico’s state-owned oil company Pemex launched a $2B bond sale with a 10.375% yield (FT)

Citizens Financial is stepping back from auto loans (RT)

🧿: Auto Loans have been the credit worlds next major concern, but it’s taken years for cracks in the market to appear. Looks like inflation and higher consumer debt is taking its toll on this market. ___

Meme Digestif☕️

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