Stocks Edge Higher, Bringing S&P + Nasdaq to New Highs

Dow: +0.37% | Nasdaq: +0.14% | S&P: +0.28%

Catch Up Quick

• Tesla (TSLA) is eyeing 9/25 for its full (beta) self-driving public release

• Bitcoin and Cardano broke $50K and $3 respectively, while Ethereum has gained >20% in the past week

• A wave of director-to-consumer (“DTC”) companies is making its way towards public markets → Allbirds, Warby Parker, Chobani, and Sweetgreen all reportedly are planning IPOs in hopes to cash in on U.S. consumer strength

• Audi unveiled its Grandsphere concept car which features Level 4 autonomy and an electric drive system → said it was basically a “private jet for the road”

• Apple’s new operating system (iOS 15) will allow users to store their driver’s licenses and state IDs in the Wallet app

• GameStop’s possible return to the S&P 500 is officially in the hands of anonymous committee (WSJ)

• The Federal Aviation Administration (“FAA”) grounded Virgin Galactic’s spacecraft during an investigation of the previous flight that carried its Founder Richard Branson into space

• Jefferies recommended clients to buy the dip caused by lower-than-expected Q2 earnings in discount retailer Five Below

• A state of emergency was declared in NYC due to record rain fall

• Walmart hiked its hourly pay by $1 for more than 550K workers ahead of the holiday season

Thought of the Day

• Over the past twelve months, shares of Zoom Video (ZM) have fallen over 30% despite the trend of remote work showing strong signs of outlasting the pandemic

• Just a couple days ago on August 30th, the videoconferencing platform reported Q2 2022 financial results which in turn drove nearly half of the aforementioned sell off

• You may be wondering why this Google Finance summary of recent earnings doesn’t appear to align with a negative market reaction

• However, during the call, the CFO admitted that user growth was beginning to normalize

• This in itself appeared enough to tank shares given valuation is far more dependent on future expectations than it is on current margins (which, for our readers in finance, can be seen first hand by toggling your cash flow growth rate assumption in a DCF and comparing the change in output to that induced by toggling margin projections)

• However, the above is a typical CFO talk track for times of rapid business growth in order to ensure that shares doesn’t overheat on future expectations, which could cause high volatility

• Therefore, the recent draw down could be overblown, especially because Zoom has fundamental support with both remote workforces (of course) and from teams working in offices, given the ability for teams to provide real-time annotations for all to see during in-person presentations

• Keep in mind, for the most part, Zoom is subscription-based pricing (not usage-based), so while usage may fall as remote work tapers, as long subscriptions still exist at all, there won’t be any material revenue churn

• Perhaps this is why Cathie Wood / Ark Invest bought $56M worth of shares on the dip!

Share Afternoon Audit

Tomorrow is FRIDAY and a long weekend awaits :)