🚀 Europe Ditches SpaceX

MARKET UPDATE

Good Morning Investor! Shares of Corning ($GLW) are living their best AI life, continuing their impressive surge from the 12% rally on Monday. The boost came on the heels of the company’s increased Q2 guidance, sending investors into a frenzy of optimism. On the flip side, Albemarle ($ALB), the world’s largest supplier of lithium for electric vehicle batteries, took a nosedive on Tuesday. Shares dropped nearly 6% after Robert W. Baird decided to rain on their parade by slashing the price target from $170.00 to $127.00 per share. Ouch!

TODAY’S BIG HEADLINES

Boeing Pleads Guilty to Fraud Charges

Walmart, Chipotle and Wendy’s Face Customer Backlash Over Pricing

Europe Wants to Diversify Away From SpaceX

TRAVEL & LEGAL PROCEEDINGS

Boeing Pleads Guilty to Fraud Charges✈️

Boeing’s Brush with the Law: Aviation titan Boeing ($BA) is hoping its "too big to fail" status will soften the blow after pleading guilty to felony charges of conspiring to defraud the federal government. This guilty plea stems from an investigation sparked by several high-profile near-disasters over the past year, dating back to 2018.

• Why might Boeing expect leniency? A little thing called history. In 2021, the aerospace giant dodged prosecution for a fraud charge linked to fatal crashes by entering a settlement with the Department of Justice.

• As part of that deal, Boeing promised to set up new safety and compliance programs—a promise they allegedly failed to keep, leading to the current charges.

Felony Fallout: As part of the new guilty-plea deal announced on Sunday night, the DOJ will appoint a third-party monitor to keep a close eye on Boeing’s safety compliance. The company must also invest $455 million into safety and compliance measures and pay a $243 million fine—matching the fine from the 2021 settlement they violated.

• This felony charge could tarnish Boeing's reputation and business prospects. There are legal statutes barring defense contractors with felony convictions from winning future contracts—a big problem for Boeing since nearly 40% of its revenue last year came from government contracts. In 2022 alone, the Department of Defense paid Boeing almost $15 billion.

• With such a significant portion of its business reliant on government contracts, Boeing's felony conviction could have far-reaching consequences. The aerospace giant's next moves will be critical in determining whether it can navigate this turbulent period and maintain its position in the industry.

IN PARTNERSHIP WITH BULLSEYE TRADES

RETAIL & FAST FOOD

Walmart, Chipotle and Wendy’s Face Customer Backlash Over Pricing😠

Chipotle’s Bowl Watch: Despite inflation cooling off, consumers' fury over rising prices is still blazing hot. Leading the charge are Walmart ($WMT), Wendy’s ($WEN), and Chipotle ($CMG). The consumer backlash ignited on TikTok, where users roasted Walmart for its new digital shelf labels that allow for rapid price changes based off demand for products.

• Wendy’s had to reverse course after its CEO floated the idea of dynamic pricing—raising and lowering prices based on demand. The suggestion didn't sit well with the public, and the burger chain quickly felt the heat.

• Over at Chipotle, customers took matters into their own hands, filming workers to ensure they didn’t skimp on burrito bowls. The frustration with perceived price gouging is palpable.

Fighting for Frugality: These three companies aren't alone in their struggles. An ever-growing list of retailers, restaurants, and consumer businesses have angered customers with price hikes. Many, including Starbucks ($SBUX) and McDonald’s ($MCD), have seen sales slump as shoppers tighten their belts.

• Now, businesses are scrambling to woo back customers with promises of better deals. This has sparked a surge in discounts, promotions, and value meals, with McDonald’s and Wendy’s rolling out new "value" meal deals. Welcome to the "fast food wars," where your dollar menu might just be the most coveted prize.

INDUSTRIALS

Europe Wants to Diversify Away From SpaceX🚀

A European Space Oddity: In a move that's surprising no one, Europe is attempting to wean itself off its reliance on SpaceX, the undisputed global leader in rocket technology. Enter the "Ariane 6," a new rocket launched from the European Space Agency’s pad in French Guiana on Tuesday. Developed by the French company ArianeSpace, this shiny new toy carried a few satellites and science experiments into orbit.

The Basket Full of Eggs: ArianeSpace, a relic from 1980, once played a significant role in the commercial space industry by launching satellites. But over the years, it has fallen remarkably behind competitors like SpaceX. With Earth's orbit turning into the next commercial gold rush due to lucrative government contracts, competition is heating up. The EU is starting to sweat, fearing its heavy reliance on a single US contractor, especially in a sector with serious military implications.

Europe Unites (Kind Of): Ahead of the launch, the ESA declared that Europe “must have autonomous access to space to realize its ambitions on the world stage.” Despite the trend towards a privatized space industry, several European nations have chipped in to fund the Ariane 6 launch, with France covering a hefty 55% of the costs.

• Given the military implications, being dependent on any nation for access to Earth's orbit could hand that nation significant leverage. So, while Europe’s move to diversify might seem like overthinking to some, it’s a sensible strategy in the grand cosmic scheme.

MORE NEWS

Additional market-moving events🌎

Tense OS Saga: Microsoft employees in China will only be allowed to use iPhones for work due to security concerns. (Reuters)

Travel Boom Continues: A record 3 million travelers passed through TSA on Sunday. (apnews)

Vaccum Troubles: Vacuum cleaner manufacturer Dyson to cut around 1,000 jobs in the UK. (CNBC)

Weight Loss Wars: Novo Nordisk ($NVO) shares dropped 1.1% after a JAMA Internal Medicine analysis found Eli Lilly's ($LLY) Mounjaro leads to faster and greater weight loss than Ozempic. (Reuters)

OUR PICKS

Our selections performance👾

On Monday the 11th of March, we released our “two superperformers” stock picks which we believe will provide significant outperformance compared to the S&P 500. Then on the 12th of June we released our next stock selection.

Here’s how the three stocks have performed since:

• Evolution AB: 1,121.50 SEK (📉-14.50%)

• Hims & Hers Health: $20.15 (📈+39.25%)

• PayPal: $59.38 (📉-6.37%)

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