🛍️ The Amazon-TikTok Partnership

MARKET UPDATE

Good Morning Investor! On Monday, shares of financial services company KeyCorp ($KEY) rocketed higher by over 8% on news that Scotiabank ($BNS) will acquire a 14.9% stake in KeyCorp for approximately $2.8 billion, purchasing shares at an 11% premium.

TODAY’S BIG HEADLINES

Goldilocks Inflation Hopes

Sweetgreens Defies the Odds, Growing During a Slowdown

The Amazon-TikTok Partnership

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MACROECONOMICS

Goldilocks Inflation Hopes🙏

The Economic Tightrope Walk: This week is bigger than a sumo wrestler's appetite for the market, with investors on edge, pinning their hopes on an inflation update that's not too hot – and not too cold. They're looking for the Goldilocks of economic indicators, if you will. On Wednesday, we'll be getting US CPI inflation figures for June, which has the potential to be a catalyst for more market mood swings. Ever since last week's unwinding of the Japanese Yen "Carry Trade" — which saw the Volatility Index ($VIX) spike to its fifth highest level in history, the market has been about as stable as a Jenga tower in an earthquake.

The Recession Obsession: Currently, the biggest concern facing investors is whether the US is heading for a recession faster than a skydiver without a parachute. Last week, unemployment came in at 4.3%, higher than the 4.1% expected, while job openings also came in roughly 60,000 lower than expected. It seems the labor market is contracting faster than a snail touching salt. Combine this data with the warning provided by Airbnb ($ABNB), McDonald's ($MCD), and many others across the economy, and the picture becomes clear – the economy is beginning to deteriorate like a banana left in the sun.

The Inflation Sensation: The reason this week's inflation print is more vital than coffee on a Monday morning is that a low inflation reading will give the Fed the confidence it needs to begin lowering interest rates — a move that just may well save the economy and get the markets back on track. If the inflation reading comes in hotter than expected, however, we could be in for a messier time than a toddler's first encounter with spaghetti.

FAST FOOD & RESTAURANTS

Sweetgreens Defies the Odds, Growing During a Slowdown🥗

A Salad Days Surprise: While fast-food giants like Starbucks ($SBUX) and McDonald's ($MCD) are feeling the heat from a consumer spending cool-down, it appears that Sweetgreen's ($SG) audience simply can't get enough of their leafy offerings. Shares of Sweetgreens surged an earth-shaking 33% on Friday, after the company reported its quarterly earnings. Talk about a green rush!

• The Los Angeles, California-based company reported revenue of $184.6 million, which was up 21% year-over-year and ahead of Wall Street forecasts that called for $180.8 million.

• The company is still not operating profitably, and as a result, posted a net loss of $14.5 million, with a loss margin of 8%. That’s an improvement from a loss of $27.3 million, representing 18% of sales, a year ago, trimming their losses like a gardener with OCD.

• The chain managed to open 4 new restaurants, along with growing same-store sales by an impressive 9%, despite a difficult operating environment with consumers reigning in their spending.

Lettuce Celebrate!: Management also took the time to raise its guidance for the rest of the year, with the notable increase being same-store sales, which are now expected to grow 5% to 7% this year, up from a previous forecast of 4% to 6% growth. Given Friday's rally, shares of Sweetgreen are now up 216% year-to-date.

ECOMMERCE & SOCIAL MEDIA

The Amazon-TikTok Partnership🛍️

Amazon's Retail Rendezvous: In the quest for global domination, ecommerce titan Amazon ($AMZN) has made a strategic move I’m sure many investors weren’t expecting. They've begun forming partnerships that integrate the selling of products on Amazon into social media applications. Currently, Amazon has partnered with Pinterest ($PINS) and short-form sensation TikTok. It's like they're trying to slide into your DMs, but with a shopping cart!

• These partnerships will now allow users to make purchases with Amazon without having to leave the app, making it more convenient for Amazon customers to shop on those social media platforms. It's like having a mall in your pocket.

• Customers who choose to link their accounts in the U.S. will see real-time pricing, Prime eligibility, delivery estimates and product details on select Amazon product ads in TikTok as part of the experiences.

All Eyes on Zuck: All that will be required to make use of this functionality is for users to link their profiles from those platforms to their Amazon accounts, enabling them to buy products directly from the ads. This move will heap on the pressure for Meta ($META), who up until now, have been the real innovators in the social media commerce space. Zuckerberg must be sweating more than a long-tailed cat in a room full of rocking chairs!

Eyeballs Means Sales: The power of social media-powered commerce is clear, 28% of consumers have transacted on social media because it allows them to buy a product as soon as it catches their attention, and TikTok's own "TikTok Shop" generated a jaw-dropping $11.09 billion in gross merchandise volume (GMV) in 2023. That's more dough than a bakery during the holidays!

MORE NEWS

Additional market-moving events🌎

EU Warns Musk: European Commission warns Elon Musk ahead of Trump interview to keep hate speech off X. (CNBC)

Cure-Anything Drugs: New research suggests that Eli Lilly's ($LLY) Zepbound and Novo Nordisk's ($NVO) Wegovy and Ozempic — originally developed for diabetes and weight loss — may help reduce the risk of several obesity-related cancers. (NPR)

Tech Acquisition Probe: UK regulators are investigating chip-design software company Synopsys' ($SNPS) $35 billion acquisition of Ansys ($ANSS) for potential impacts on competition in the UK. (Reuters)

Past Your Prime: YouTuber Logan Paul’s beverage brand Prime is being sued by a manufacturer for $68 million over an alleged breach of contract. (NYP)

OUR PICKS

Our selections performance👾

On Monday the 11th of March, we released our “superperformers” stock pick which we believe will provide significant outperformance compared to the S&P 500. Then on the 14th of June we released our next stock selection. Lastly, on August 6th, we initiated a position in Celsius holdings.

Here’s how the stocks have performed since:

• Hims & Hers Health: $15.83 (📈+9.47%)

• PayPal: $63.59 (📈+4.86%)

• Celsius: $38.37 (📉-4.98%)

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