Great Stuff 8-09-2019

Friday Four Play: Core Prices, Chips and Uber Hit the Skids

Remember when Fridays were fun?

You’d go out with coworkers or friends after work to relax and forget about the week.

Lately, it seems that we’re going out just to maintain our sanity after all our hard investing work gets dashed to pieces by frenzied Friday selling.

On the bright side, going out is apparently getting cheaper. The producer price index (PPI) — which tracks inflation in the U.S. — was all but flat last month. The July PPI rose a mere 0.2%.

“But I thought you said it was getting cheaper? A 0.2% rise is … well … a rise!”

Hold your horses, we’re not done yet. The core PPI, which tracks frivolous stuff such as food and energy, fell for the first time since 2015, dipping 0.1%.

In fact, wholesale energy prices are down 4.4% in the past year. Only gasoline prices have made any headway.

Looking ahead, the situation doesn’t get any better. Partly finished goods prices are down 2% and raw-materials prices are down 10% in the past year.

“So, Great Stuff, why should I care?”

You should care because it means that the U.S. economy is on shaky ground. While flat/falling inflation means lower prices, it also means sluggish economic growth. And that means we could see more rate-cutting action from the Federal Reserve.

Finally, it means that if you haven’t started preparing for things to get worse, you need to start now. Click here to find out how.

Now that you’re all terrified, here’s your Friday Four Play…

No. 1: Uber’s Über Loss

Great Stuff 8-09-2019

If a textbook definition of a poor quarterly report existed, Uber Technologies Inc. (NYSE: UBER) just nailed it.

The company missed expectations for revenue, earnings and bookings. It was a trifecta of terrible.

Uber said it lost $5.23 billion, or $4.72 per share, on the quarter. How do you lose $5.23 billion? That’s just insane.

The company did have $15.75 billion in revenue for the quarter, but even that lofty figure fell short of the consensus target of $15.83 billion.

The Takeaway:

Uber’s über failure stands in stark contrast to Lyft Inc.’s (Nasdaq: LYFT) blowout earnings earlier this week.

This is the start of the race for the ride-hailing market. Lyft just floored the accelerator. Uber somehow shifted into reverse.

Regular readers know I’m not big on either Uber or Lyft. Right now, they’re both glorified crowdsourced taxi services. Until one of them makes some real headway on driverless vehicles, I’ll probably remain on the sidelines.

But that’s not to say there isn’t money to be made by investing in the market.

Take Banyan Hill expert Paul , for example. Paul has the inside track on all the technology that powers both Uber and Lyft. To find out how you can profit from one of the greatest technology booms of all time, click here now!

No. 2: A Hill of Beans

Great Stuff 8-09-2019

Are we really heading back to tit-for-tat trade “negotiations”?

Unfortunately, yes. Last month, President Trump agreed to allow U.S. chipmakers to deal with Chinese telecom giant Huawei on a per-license agreement. But those licenses have yet to arrive.

And with China now halting purchases of American crops, they may never see the light of day.

This means that semiconductor companies such as Micron Technology Inc. (Nasdaq: MU) and Advanced Micro Devices Inc. (Nasdaq: AMD) will lose a crucial customer. Huawei is the largest telecom company in China. That’s a lot of chips.

The Takeaway:

Micron stands to be the biggest loser in this latest trade war spat. The company makes flash memory that’s crucial in smartphone devices around the world. Recent pricing issues in the flash memory market mean that Micron can ill afford to lose a key customer like Huawei.

AMD, on the other hand, is much better positioned to handle any Huawei fallout. The company just released its new Epyc 2 line of enterprise processors for data centers. It’s also dominating the PC and video game console market with its Ryzen chips.

While a decision to once again ban Huawei from American tech companies will ding AMD over the short term, the company is still poised to grow considerably in the long term.

No. 3: Stop Toying Around

Great Stuff 8-09-2019

Curiouser and curiouser … Mattel Inc. (Nasdaq: MAT) has one of the strangest reasons for a sell-off I’ve seen in a while.

The venerable toymaker was planning a bond offering of senior notes due in 2027. That is, until this morning. The company abruptly called off the offering due to “an anonymous whistleblower letter.”

So far, Mattel hasn’t provided any details from this mysterious letter. However, the company has promised to “investigate the matters set forth in the letter.”

The Takeaway:

If I’ve said it once, I’ve said it a hundred times. Wall Street hates uncertainty. While the cancellation of the bond offering is a big deal, this mysterious letter is likely doing more damage to MAT shares than anything else.

What does it say? What unknown issues does Mattel have that are big enough to stop a bond offering?

These questions and more will be answered in the next episode of “Mattel and the Anonymous Whistleblower.”

Until then, follow the market’s lead and hold off on MAT.

No. 4: A Game of D&D

Great Stuff 8-09-2019

Netflix Inc. (Nasdaq: NFLX) just scored a major coup in the realm of online streaming.

David Benioff and D.B. Weiss, the showrunners for HBO’s Game of Thrones, have signed a deal to develop series and movies exclusively for Netflix.

Among those bidding for D&D (as they are collectively known on the interwebs), were Disney, Comcast, Amazon, Apple and HBO … a veritable who’s who of content-creating giants.

Netflix is reportedly paying the duo between $200 million and $300 million for exclusivity.

“We are thrilled to welcome master storytellers David Benioff and Dan Weiss to Netflix,” Netflix Chief Content Officer Ted Sarandos said.

The Takeaway:

I’m going to level with you here. D&D did a great job adapting existing content for Game of Thrones. Seasons one through six were just what every George R.R. Martin fan was looking for and more.

Seasons seven and eight? Complete garbage. It was pretty garbage, but still … garbage. (How does one of your main characters “forget” about an entire fleet of ships?)

But don’t take my word for it. There were petitions started to reboot the last season of Game of Thrones, without D&D. More than one million fans signed on.

If you want the real measure of D&D’s writing and showrunning abilities, that is where you look.

This is the vitriol that Netflix has inherited by signing D&D to create content.

Do I think this will impact NFLX shares? Probably not in the short term. But it does raise questions about the quality of the company’s spending on content acquisition.

Maybe I’m just a disgruntled fan. Maybe I’m on to something. Either way, D&D have a very high bar to overcome with anything new they produce for Netflix.

Great Stuff: What Are You Waiting For?

There are still open spots left for Banyan Hill’s annual bash, the Total Wealth Symposium!

The event takes place September 12 – 14. This is Banyan Hill’s premier annual event. And attending means you can rub elbows with your favorite experts: Paul , Michael Carr, Matt Badiali, Ted Bauman … they’ll all be there!

They’ll also have exclusive market advice and recommendations just for you. Previous attendees have had the chance to capitalize on gains of 1,665% in just six months!

That’s insane.

What’s more, this year’s symposium is being held on the shores of Amelia Island, Florida. You’ll be surrounded by opulent mansions, extravagant parties, wealth and excess.

What better setting to plan out how to amass your own fortune!

But seats are limited … seats are always limited, you know. That’s just how these things go.

Once again, Great Stuff readers, I have your invitation waiting right here.

So, don’t wait another second. Reserve your spot now.

And if you’re lucky, you may even see me there!

Click here to reserve your spot at the Banyan Hill 2019 Total Wealth Symposium.

Until next time, good trading!


Joseph Hargett

Great Stuff Managing Editor, Banyan Hill Publishing