📺 Chick-fil-a's Streaming Service??

MARKET UPDATE

Good Morning Investor! On Friday, shares of software solutions provider Workday ($WDAY) experienced a surge that would make even the most caffeinated day trader's heart skip a beat. The company's quarterly earnings report not only beat profit expectations but also saw them flexing their financial muscles by increasing margin forecasts. This double whammy of good news sent the stock soaring an impressive 12%. It seems Workday's software isn't the only thing working overtime!

Meanwhile, building materials supplier Builders FirstSource ($BLDR) saw its share price blast off 8%, like a rocket fueled by the Fed's interest rate cut signals. Why, you ask? Well, lower interest rates typically mean looser lending standards, which in turn means an uptick in building. It's like giving sugar to kids - suddenly, everyone wants to construct something! The company has also been racking up 'buy' ratings faster than a contestant on a shopping spree game show. This month alone, they've received three buy ratings from Jefferies, Oppenheimer, and Stifel Nicolaus.

TODAY’S BIG HEADLINES

The Fed Cuts to the Chase

Automation is Soaring, Luddites Return

Chick-fil-a Launches a Streaming Service??

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MACROECONOMICS

The Fed Cuts to the Chase✂️

Powell's Mountain High Proclamation: Markets rallied on Friday faster than a squirrel on espresso after the Fed provided some relief in the form of a confirmed rate cut in September. However, Jerome Powell — Chairman of the Fed — did stop short of outlining exactly how big that cut would be. As of right now, betting markets have a 75% probability that we'll see a 25 basis point cut, along with a 20% chance of a 50 basis point cut.

Powell's "Let There Be Light" Moment: At the central bank's annual conference in the mountain town of Jackson Hole, Wyoming (because nothing says "serious economic discussion" like a ski resort), the Fed chair had his own "let there be light" moment in the financial world, saying "the time has come" to start cutting interest rates. This is a sensible move that many would actually argue has come too late, given that Inflation has now dropped to within striking distance of the hallowed 2% target. It’s like showing up to a party just as everyone's calling an Uber home.

The Fed's Labor of Love: This has forced the Fed to focus on its secondary priority, the labour market, like a parent remembering they have a second child. The reason many economists have argued that the Fed is potentially acting too late is that unemployment has already begun to tick up — bear in mind it's a lagging indicator, signifying that things will get worse before they get better. It's like noticing your boat is sinking after your feet are already wet. The central bank’s best weapon for preventing a deterioration in the labour market is quantitative easing in the form of interest rate cuts.

The Fabled Soft Landing: The Fed’s at the dismount stage of a notoriously difficult feat: hiking interest rates just enough to bring down inflation without plunging the economy into recession. Given the fact that the Fed didn't offer any insight as to the size of the first rate cut, it's made one thing clear: at this point, Powell simply doesn't know. He's basically the economic equivalent of a Magic 8-Ball right now.

• The potential arrival of a recession is also a key indicator as to how well the market will perform once rate cuts arrive. Throughout the past 80 years, whenever the Fed cuts rates and a recession occurs within 12 months, the stock market crashes faster than a computer running Windows Vista. However, inversely to that, if no recession appears, the market continues cranking out new highs like a broken record player stuck on the "cha-ching" sound effect.

ROBOTICS & MANUFACTURING

Automation is Soaring, Luddites Return🦾

History Doesn’t Repeat, But it Does Rhyme: For those of you history fanatics reading today, you'll already be aware of who the Luddites were, but for those of us who haven't taken the plunge into the annals of history, a Luddite is often a term with a negative connotation, referring to someone unwilling—or simply unable—to adapt to new technology. It's like when Microsoft decides to change the look and layout of Teams, and suddenly Karen from accounting is threatening to go back to carrier pigeons.

AI Ate My Job: The Luddites were a group of English textile workers in the early 19th century who protested the introduction of automated machinery in the textile industry. The Luddites feared that new machines, such as mechanical looms and knitting frames, would lead to unemployment and devalue their skilled labor. Many today have similar fears and concerns relating to the rise of Artificial Intelligence, not because they oppose technological progress, but because, like the Luddites 200 years ago, they fear the socio-economic impacts of unregulated machinery.

Anxiety Tracker: Since 2017, Gallup's survey shows a 22% increase in people worried that technology will make their jobs obsolete—up 7% from 2021. This anxiety is more pronounced among younger workers compared to older ones, and it has also increased more among those earning less than $100,000 than among higher earners.

• This phenomena is also even shared amongst both men and women alike. Nothing brings people together like the fear of being replaced by a toaster with a PhD.

Distopian Reality: These concerns aren’t completely unfounded either, Goldman Sachs, for instance, estimates that up to 300 million jobs, or 9.1% of the global workforce, could be lost to AI. The situation is even more dire in advanced economies, with 60% of jobs at risk of being replaced by AI soon. 44% of companies using or planning to use AI anticipate layoffs in 2024. It's like we're living in a sci-fi movie where the robots win, but instead of cool laser battles, we just get pink slips.

STREAMING & MEDIA

Chick-fil-a Launches a Streaming Service??📺

Clucking Mad: In a move that's sure to ruffle the feathers of streaming platforms and meme lords alike, fast-food behemoth Chick-fil-A, which operates over 3,000 restaurants in the US, has announced its plans to launch its own streaming service, complete with original shows. One might say they're really putting all their eggs in one basket. (We wish we were yolking, but alas, this is no poultry matter.)

The Nitty-Gritty: The company’s streaming service is aimed at being family friendly, with each exclusive show set to be allocated a budget of around $400K per half-hour episode, and to top it off, they’ve already ordered game shows from big-name producers, particularly in the unscripted space. The fast-food giant is also in talks to license and acquire content, proving they're not just winging it.

• Rumor has it that this includes a family-friendly game show from Glassman Media, the company behind NBC's "The Wall," and Michael Sugar's Sugar23, which produced Netflix's "13 Reasons Why." One can only hope the latter won't inspire "13 Reasons Why You Should Eat More Chicken."

• Believe it or not, this isn’t their first foray into the industry. Chick-fil-a has previously produced content for its own site before including Stories of Evergreen Hills, a series of short, animated films. It has also diversified into other areas such as making children’s puzzles and games under its Pennycake brand.

A Fowl New Direction: It's been reported that the idea is to launch later this year, with talks of scripted projects and animation in the pipeline. Clearly, the chicken burger maker has had enough of the restaurant business and wants in on some of that juicy, high-margin subscription revenue. One might say they're looking to spice up their portfolio with some hot and streaming action.

MORE NEWS

Additional market-moving events🌎

Billionaire Detained: French authorities on Saturday detained Pavel Durov, the French-Russian billionaire who founded the messaging app Telegram, at an airport outside Paris. Durov, 39, was wanted under a French arrest warrant due to the lack of moderation on Telegram which led to it being used for money laundering, drug trafficking and sharing pedophilic content. (CNN)

Nike x Lego Partnership: Lego and Nike will start producing “co-branded products, content, and experiences starting next year,” according to the companies. It’s unclear exactly what that means, but the potential of merging two of the most beloved brands on the planet is huge. (FC)

China’s Chairman Steps Down: Bank of China Vice Chairman and President Liu Jin resigned for personal reasons effective on Sunday. (CNBC)

Meta’s New Quest: Meta is planning to show its new budget VR headset next month.The “Quest 3S,” which Meta could sell without controllers, is slated to debut at Meta Connect on September 25th and 26th and could be priced at $300 or $400. (TheVerge)

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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: $16.73 (📈+15.62%)

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