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Good Morning Everyone!

Turns out free money is very expensive. 

• FTX/Alemeda collapse will cost US$7-12B – FTX worth almost NOTHING

• Meta – lost US$730 billion in 12 months – soon be worth NOTHING?

• Tiger Global – hedge fund losing US$40MM a day

The system needs a reset.

MARKET UPDATE

Markets move to Thursday’s CPI number after Midterm results trickle in

• Midterms did not move the markets

• CPI likely will (Thursday)

• Cleveland Fed Inflation Nowcast:

Crude    88           -1% 

• Lower on a large crude build in the API weekly

Midterms

• Senate 

  • Control is up in the air

  • Georgia, Arizona, Nevada are too close to call

  • Georgia likely to go to a run-off in December

  • Democrats flipped a Senate seat in Pennsylvania, Fetterman defeated Dr. Oz

• House 

  • Republicans likely to take the House but by a smaller margin than forecast

Meta     +5%

• Letting go of around 11,000 employees and extending a hiring freeze through Q1

• 13% of its staff

• First ever broad restructuring at Facebook/Meta

• 2023 operating budget $97 billion at mid-point vs. prior $98.5 billion

• 2023 capital expenditures $35.5 billion at mid-point vs. prior $36.5 billion

Disney  -8%

• Revenue miss = 5%

• EBIT operating miss = 23%, largely due to Parks

• Parks margins missed

• Bigger losses at direct-to-consumer streaming and linear

• Disney+ sub adds beat 12.1 million but average revenue per user declined 5% y/y

ByteDance/TikTok

• Also getting hit with lower Advertising revenue

• Slashed $2 billion off its 2022 Ad Revenue target ($12B to $10B)

Tesla

• Elon Musk sold around $4 billion of Tesla stock to close Twitter deal

• Elon also sold stock in August

Taiwan Semiconductor

• Plans to build another chip making plant in Arizona

• Already announced a $12 billion complex

• The two plants will be north of Phoenix

Earnings

• Affirm       -16%, lowered 2023 guide

• Occidental Petro      -1%, cash Flow, FCF and production beat, EPS slight miss

• Lucid

• D.R. Horton        -2%, Revenue $9.87B vs. guide $10-10.8B, EPS $4.67 vs. $5.07

• Roblox        -15%, revenue miss, less gaming

• AMC          -1%

Under the Radar

FOUR NEW ICONIC BRANDS ACQUIRED. People don't just want to drive from point A to point B – they want to have fun driving. EV Technology Group acquires beloved brands—like it did the iconic MOKE—and electrifies them. It now has its next set of brands to electrify: Brewster & Co. Fantuzzi, Marazzi, and Office Stampaggi Industriali.*

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CRYPTO UPDATE

FTX update: things very much not “fine”

• FTX facing serious liquidity crunch

• Binance signs non-binding LOI to acquire FTX

  • No guarantees…due diligence underway

• Just months ago FTX was doing the bailouts

• Who is left to bailout Binance if it fails?

• Is FTX’s Sam Bankman-Fried the next Warren Buffett: A Hard NO

• FTT (FTX token) crashed…down >80%

• Surge in withdrawals out of Jump Trading, Alameda Research (both owned by FTX):

Ripple effects felt throughout crypto

• October crypto gains have been erased

• Prices back at June lows

MEME OF THE DAY

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