😨Middle-East crashes the markets

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MARKET UPDATE

Fun fact: Gold has massively outperformed US equities over the past 25 years. Since April of 1999, the S&P 500 is up 295%, the tech-heavy Nasdaq has flexed a 551% increase. Meanwhile, priced in US dollars per ounce, Gold bullion has bulked up a whopping 725%! There’s just no beating shiny rocks.

TODAY’S BIG HEADLINES

• Middle-Eastern conflict spooks the markets

• How Stanley Cup made $750 million

• Uniswap & DeFi under attack

• Drug side effects send Zoetis sinking

GEOPOLITICS

Middle-Eastern conflict spooks the markets😨

Friday The 12th: On a frightful Friday, global markets took a nosedive, spooked by the specter of escalating tensions in the Middle East between Israel and Iran, two of the world’s seven nuclear powerhouses. These tensions have further escalated over the weekend after Iran launched a direct assault on Israel.

Timeline Of Events: The markets began to decline on news that the US, informed Israel of a 24-48 hour window during which they believe Iran might unleash a retaliatory attack. Meanwhile, Russia, not to be outdone in this global horror show, flexed its muscles with a test launch of its latest ICBM at the Kapustin Yar testing range.

Proxy Agenda: Iran’s proxy group, Hezbollah, operating out of Southern Lebanon, decided to turn up the heat on this already simmering Friday. They launched a barrage of drone and rocket strikes against Israel around 1:15pm ET, turning the sky into a fireworks display. Many of these were intercepted by Israel’s Iron Dome defense system, proving it’s not just for show.

Weekend Timeline: Iran unleashed a swarm of 400-500 “one-way” explosive drones towards Israel this past Saturday, precisely at 16:45 EST. It was a sight that would’ve had any birdwatcher reaching for their binoculars, if only they were birds and not instruments of war. The Isreali government’s “Doomsday plane“ fled the country, potentially with prime minister Netanyahu and the rest of the cabinet enjoying the in-flight peanuts.

Offensive Expansion: Iran’s attack later expanded, launching Land-attack cruise missiles and medium-range ballistic missiles. Israel’s Defense of Saturday night’s Iranian Missile and Drone Attack is Estimated to have Costed over $1.3 Billion in Jet Fuel, Surface-to-Air Missile Interceptors, and other Military Equipment.

Market Whispers: Stocks took a significant hit on Friday, but these losses were mere whispers compared to the screams coming from the crypto markets over the weekend. Even Gold, the old reliable, took a tumble. This could either be an incredible buying opportunity, like finding a full-size candy bar while trick-or-treating, or the beginning of a sizable correction in the markets. Only time will tell.

sources: (ABCNews), (AlJazeera), (The Guardian), (BBC)

PRIVATE COMPANIES

How Stanley Cup made $750M 🥤

Viral Success: In a move that would make any marketer green with envy, Stanley, the 110-year-old company that’s as vintage as a black-and-white movie, harnessed the wildfire-like viral potential of TikTok. Their cups, as ordinary as they come, featuring no novel attributes, were marketed with such finesse that their sales skyrocketed from a humble $74 million in 2019 to a staggering $750 million in 2023. That’s a tenfold increase in sales in just four years, faster than a greyhound on a race track! All this, despite their products being as novel as a loaf of bread. The secret sauce? The Midas touch of their CEO, Terence Reilly, a man who turned the Crocs (CROX) brand from a laughing stock into a trend-setting sensation during his tenure as the company’s CMO.

Sense of Community: Much like Crocs, Stanley tapped into our primal urge to covet what others possess, a phenomenon known as “social contagion”. As Reilly told CNBC, “Our customer wants her Quencher to match her outfit, her nail polish, her car, her mood, her kitchen.”

Unwavering Demand: The success has been so monumental that TikTok is now awash with videos of both children and adults alike, shedding tears of joy over being gifted a Stanley product. The Quencher, released in limited edition colors that sell out faster than Taylor Swift concert tickets, has become the Holy Grail of drinkware. A recent collaboration with Starbucks resulted in a red Quencher that was being resold on eBay for hundreds of dollars the same day it dropped.

Opportunisitic: In a recent twist, a woman involved in a car accident posted a video on TikTok showing her car in shambles, but her Stanley Cup emerged unscathed. Seizing the moment like a hawk spotting its prey, CEO Terence Reilly offered her more Stanley cups and even paid for her to get a new car. This move not only marketed the product as “built-for-life” but also painted the company in a light so positive, it could outshine the sun.

sources: (Forbes), (CNBC)

CRYPTOCURRENCY

Uniswap & DeFi under attack⚔️

Decentralized Combat: On a day that could have been just another Thursday, Uniswap Labs’ CEO, Hayden Adams, took to X to drop a bombshell. The company had received a “Wells Notice” from the SEC, the financial world’s equivalent of a thundercloud on a sunny day. These notices are like the ominous music in a horror movie, hinting at the regulator’s intention to bring charges against them. They’re usually the prelude to enforcement actions, or in layman’s terms, the calm before the storm. Adams, the captain of this decentralized ship, responded with “just annoyed, disappointed, and ready to fight.”

Regulatory Radar: This is an ongoing theme from the SEC, with the regulator acting as strict as a school principal and recently going after centralized crypto exchange Coinbase (COIN), for “Operating as an Unregistered Securities Exchange“.

Market Whispers: The fallout from this news has sent ripples through the crypto pond. The Uniswap native token (UNI) has taken a tumble, down 21.26%, hitting its lowest point since the frosty days of late February. This has nudged it out of the top twenty cryptocurrencies by market cap. It seems UNI is playing a high-stakes game of musical chairs with its market position, and right now, the music has stopped.

sources: (CoinTelegraph), (sec.gov), (Coindesk)

HEALTHCARE

Drug side effects send Zoetis sinking💊

The Zoetis Zigzag: On a not-so-fine Friday morning, news emerged that there have been thousands of reports made of “side effects“ emerging from the use of drugmaker Zoetis’ (ZTS) dynamic duo of arthritis treatments, Librela and Solensia. The news hit Zoetis’ shares like a ton of bricks, sending them tumbling down the stock market cliff by a staggering 8%. This added another layer of gloom to the company’s already clouded skies, as it grapples with an antitrust probe from the EU over its canine pain-relief treatment. To add insult to injury, back in February, the company’s EPS guidance for the year turned out to be more of a shy whisper than a confident forecast, falling short of Wall Street’s expectations.

A Silver Lining?: But wait, it’s not all stormy weather for Zoetis. As of now, both the company and the scientific community are yet to find any concrete evidence linking the drugs to the reported side effects. So, it seems the jury is still out on this one. Remember, correlation is not causality.

Stock Market Whispers: As for Zoetis’ shares, they’ve been on a downhill ski trip this year, currently sitting at a chilly 24% below their starting point. With the stock now trading at a forward PE ratio of 27 and a forward free cash flow yield of 3.04%, it’s like finding a designer dress at a thrift store sale. Especially when you consider that the FCF is expected to strut down the runway with a 30% growth this year, and earnings are set to puff up their chest by 8%. So, despite the rollercoaster ride, we might just be looking at a hidden gem in the rough.

sources: (Bloomberg), (WSJ)

MORE NEWS

Additional market-moving events🌎

• Are You Surprised?: Saudi Arabia have had to scale back their $1.5 trillion plan to build a 106 mile long city in the desert called “The Line”, to a mere 1.5 miles. (Daily Mail)

• Apple’s Court Endeavours: The smartphone maker Apple (AAPL), have lost a bid in the court system to dismiss a U.K. lawsuit targetting the tech giant for “unfairly” charging its app developers up to 30% commission on the Apple app store. This lawsuit could cost the company up to $1 billion. (Reuters)

• Innovation in Music: Spotify have released a new feature allowing users to remix songs, in a bid to attract the attention of the “TikTok generation”. (WSJ)

• Mortgage Suckerpunch: Mortgage rates in the US have climbed to 6.88%, up from 6.82% in the week prior. This reflects the ongoing housing affordability challenges, compounded by the “sticky” inflation fears. (CNN)

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