Good Chop | March 25th, 2024

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GOOD MORNING

Here’s everything you need to know today. As we bid adieu to March and usher in an April showered with crucial economic indicators and earnings escapades, your friends at Moby are here to light the way through the twists and turns of the trading week ahead—albeit a tad shorter, thanks to Good Friday's market siesta.

Foremost on our radar is the Personal Consumption Expenditures (PCE) index, the Fed's favorite financial thermometer. With investors hanging on every decimal point for hints of inflation's temperature, Friday promises a day of reckoning. Will it signal a continued chill or hint at a heating up?

Amidst the suspense, Tuesday brings us a saga of earnings reports starring none other than GameStop, the original meme stock maestro, ready to reveal whether it's leveled up or facing a boss battle. The plot thickens with entries from Walgreens—freshly ousted from the Dow Jones' exclusive club—Carnival Cruise Line, navigating through post-pandemic waters, and other corporate contenders.

But that's not all! The week is packed with pivotal data points from housing market metrics to consumer confidence cocktails, all serving to sketch a fuller picture of our economic landscape.

Let’s dive into more detail below.

On the cusp of a quiet Good Friday, the financial world's eyes are riveted on an anticipated piece of economic drama: the release of the Personal Consumption Expenditures (PCE) report. This isn't just any report; it's the Federal Reserve's preferred spotlight for gauging inflation, a critical factor in its rate-setting script. February's forecast hints at a softer reading, potentially easing to 0.3% month-over-month from January's 0.4%. A seemingly small tweak, but in the vast theater of economic indicators, it's a pivotal scene that could support the Fed's narrative for lowering interest rates in the near future.

Why the spotlight on such subtle shifts? The core PCE price index, by excluding the volatile costs of food and energy, presents a clearer picture of inflationary trends. As the Fed's go-to metric, a downtick could signal that the disinflationary trend is holding its ground, despite recent plot twists of higher-than-expected CPI and PPI readings. This Friday's data drop is set to reveal whether the Fed's battle against inflation is advancing as hoped, or if new strategies need to be drafted in the economic script. As we await the unveiling, one thing is clear: in the nuanced narrative of economic policy, every decimal tells a story, guiding the Fed's next move in its ongoing quest for stability.

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In an unprecedented move that's shaking up the real estate world, the National Association of Realtors (NAR) settlement has been met with open arms by consumer advocates and some realtors, signaling a promising shift towards increased competition and transparency in homebuying. Celebrated for its potential to lower costs across the board, this historic agreement is expected to open up the industry like never before, making the homebuying process more straightforward and financially accessible for buyers and sellers alike.

Digging deeper into the financial implications, experts suggest significant savings for consumers. For instance, instead of homebuyers shouldering a traditional 3% commission, amounting to $15,000 on a $500,000 home, the settlement encourages exploring alternatives like hiring a real estate lawyer or appraiser for a fraction of the cost. This not only democratizes the buying process but also injects a healthy dose of competition among service providers, potentially reducing the overall expenses tied to purchasing a home.

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Kevin O'Leary is spearheading a syndicate to bid for TikTok, aiming for a purchase price between $20 and $30 billion, which starkly contrasts with its recent $220 billion valuation. This strategic move is in response to increasing pressures from U.S. legislators on TikTok's parent company, ByteDance, to divest its American operations due to national security concerns. O'Leary's proposed bid reflects a potential 90% discount, hinging on the necessity to overhaul TikTok's core algorithms within the U.S. to sidestep a looming national security ban.

In his bid, O'Leary is navigating a complex web of political and regulatory challenges, including the need for White House approval. The deal, underscored by its national security implications, has prompted discussions with key political figures and plans to court sovereign wealth funds starting April. O'Leary's approach not only highlights the unique challenges of acquiring a tech giant like TikTok but also signals a significant shift in how tech acquisitions might be viewed and negotiated in the future, especially those involving platforms with international ties and data privacy concerns.

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In a twist that might make Wall Street feel like it's on a roller coaster, shares of Digital World Acquisition Corp. (DWAC) nosedived nearly 14% following the approval of its much-anticipated merger with Trump Media. This seismic shift in the stock market unfolded after DWAC's shareholders green-lit the fusion with the former President's social media venture, setting the stage for a new ticker symbol, DJT, to make its debut next week.

Starting the day with optimism at $44.20 a share, DWAC's fortunes quickly reversed, plummeting to a close of $36.94. This sharp $5.87 fall erased hopes of a merger-fueled rally, leaving Trump Media’s valuation—and Trump's majority stake—significantly diminished. With Trump poised to control nearly 80 million shares, representing a staggering 69.4% of the newly merged entity, the stakes couldn't be higher. Yet, as DWAC's shares tumbled, so did the paper value of Trump's impending windfall.

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Tesla Inc. has throttled its Shanghai production, signaling caution as the EV giant navigates China's challenging auto landscape. This scale-back aligns with emerging patterns in global EV sales, mirroring a broader industry trend towards moderation and strategic re-evaluation.

In Shanghai, Tesla's facility has adjusted to a new rhythm, operating five days a week, scaling back from its fuller schedule. Despite maintaining their typical dual-shift vigor, there must be a clear timeline for revving back to full capacity. Amidst this contraction, Tesla's shares have taken a hit, echoing uncertainty as the company grapples with a dip in Chinese vehicle deliveries and mounting competition from rivals like BYD, which offer a fresher fleet and more competitive pricing.

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1. Chewy Stock Dips on Gloomy Outlook

Management's pessimistic forecast for the upcoming fiscal year led to a decline in Chewy's stock.

2. Micron Excels with AI-Driven Forecast

Micron Technology's shares surged to a new high after outperforming estimates in its second fiscal quarter, bolstered by AI prospects.

3. Olive Garden Owner Darden's Stock Tumbles

Darden Restaurants saw its stock plummet as more consumers opt to dine at home, forcing a revision of its fiscal 2024 outlook.

4. Elizabeth Warren Requests SEC Probe Into Tesla

Senator Warren has called on the SEC to investigate potential governance issues at Tesla, pointing to concerns over Elon Musk's dual roles.

5. Japan Prepares for Rate Adjustments

Facing the need to replace aging machinery, businesses in Japan are concerned about the costs amid historic changes to interest rates.

6. State Farm Cuts 72,000 Home Policies in California

Citing rising costs and disaster risks, State Farm announced it won't renew 72,000 home policies in California, exacerbating the insurance market crisis.

7. DOJ Sues Apple; Jim Cramer Still Recommends Stock

Despite the DOJ's antitrust lawsuit against Apple, Jim Cramer believes the stock remains a worthy buy.

8. Mega Millions Jackpot Nears $1 Billion

The Mega Millions jackpot has escalated to $977 million, ranking as one of the largest in U.S. lottery history.

9. Bitcoin Fluctuates Amid Volatility Expectations

As analysts forecast more volatility, Bitcoin tested the $66K mark, indicating a potentially calm market ahead.

10. Paramount Shares Dip After M&A Speculation Cools

Following initial excitement over a potential deal, Paramount Global's stock declined on reports that Shari Redstone is skeptical of the Apollo offer for the studio.

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Today's insights are courtesy of Good Chop, high-quality meat & seafood, delivered from American family farms & fisheries.

Learn More About Good Chop ➔