Happy Friday Everyone 👋
FIVE things you need to know this week in 60 seconds.
If you’re reading this but haven’t subscribed, join our community of +35k smart, fun & edgy investors 👇
*as of 4pm ET, 7/15/21
1. MACRO
Feelin’ hot, hot, hot!
Consumer prices rose 5.4% over the last 12 months, the highest rate since 2008. Zooming in, prices increased 0.9% in June, well above estimates of 0.5%. So where did consumers feel the most pain?
Hopefully, you didn’t buy a used car or truck last month because if you did, you probably (definitely) overpaid! This category alone accounted for 1/3 of the overall CPI with prices climbing 10.5%.
The other major culprits were anything to do with reopening: hotels and motels, airfare, restaurants, etc.
GRIT’S TAKE: J-Pow was grilled on the Fed’s monetary policy by the House Financial Services Committee this week and the results were predictable: despite acknowledging that inflation is hotter than expected (uhh, ya think?) he still thinks it’s too soon to begin scaling back on the $120B Treasuries and mortgage-backed securities monthly allowance.
GRIT’S ACTION: Diamond Hands: commodity stocks.
2. DEALS & IPOs
A pair of crypto giants are going public
Last week, Peter Thiel-backed Bullish announced it was going public via SPAC merger in a $9B deal. The company has plans to launch a crypto exchange later this year.
*As an aside: I think Peter Thiel is not a human being. First, he takes Palantir (meme/software/defense) public, then Affirm (buy now/pay later), then Atai (let’s get psychedelic), and now this. The man never sleeps!
Not wanting to be left behind, Circle Internet Financial, one of the biggest crypto companies in the world, announced its plans to go public via its own SPAC merger deal valued at $4.5B.
The valuation might be half as big as Bullish’s, but there’s no reason to be bearish on Circle, which is growing fast. Right now, there’s over $25B in USD Coin (its stablecoin) in circulation. Compare that to only $1B just a year ago.
GRIT’S TAKE: Circle’s USD Coin has become the fastest growing, regulated, fully reserved dollar digital currency in the world. Their going public is a HUGE step towards the validation of cryptocurrencies!
GRIT’S ACTION: #HODLing Bitcoin and eyeing Ethereum for an entry point!
3. STOCK MARKET
Banks heading into earnings season like
The big banks came out swinging with their second quarter results this week. Let’s run back the tape:
JPMorgan: $3.78 a share vs. $3.21 est; $31.4B rev. vs. $29.9B est
Highlight: $3.4B investment banking rev. vs. $300M est
Morgan Stanley: $1.85 a share vs. $1.65 est; $14.8B rev. vs. $13.98B est
Highlight: $2.83B equities-trading revenue beat estimates by +$400M
Goldman Sachs: $15.02 a share vs. $10.24 est; $15.39B rev. vs. $12.17B est
Highlight: $3.61B investment banking revenue vs. $3B est
Wells Fargo: $1.38 a share vs. $0.97 est; $20.27B rev. vs. $17.77B est
Highlight: $6B net income compared to $3.8B loss in Q2 last year
Citigroup: $2.85 a share vs $1.96 est; $17.47B rev. vs. $17.2B est
Highlight: $1.1B equities-trading revenue vs $879 est
GRIT’S TAKE: Bank earnings were helped, in part, by the release of billions in reserves that had been set aside for loan losses (COVID). Another tiny driving factor? INVESTMENT BANKING. Global deal volume hit $1.42T last quarter alone!
GRIT’S ACTION: Diamond hands – JPMorgan, Morgan Stanley & RBC.
4. COMMODITIES
OPEC finally lets the UAE pump
A compromise was reached between OPEC and the United Arab Emirates (UAE) that will lift the baseline on how much oil the UAE can produce. You might remember that last week the group was bickering like a gaggle of drunk teenagers.
The UAE originally wanted to up production to 3.8M barrels per day from 3.17M, but Saudi Arabia agreed to 3.65M in the most passive-aggressive concession ever. Seriously, all this fuss over 150k barrels?
GRIT’S TAKE: Now that tempers have flared, the Cartel can focus on the actual matter at hand which is finalizing the plan to revive production. That plan will likely involve adding another 400k barrels a day (in monthly intervals) to help meet projected demand, which is expected to increase by 3.4% in 2022.
GRIT’S ACTION: Diamond hands – energy stocks
5. ENTERTAINMENT
Ladies and gentlemen, PEAK IPO: single-asset REITs
The folks over at ROX Financial LP in Oakley, California must have heard that IPOs have raised a record-breaking +$350B already this year because they want in on the action. So what does ROX Financial do, exactly?
Nothing. But they do have a plan to raise $84M as they form a real estate investment trust (REIT) to buy…….a single warehouse? It’s not just any warehouse, though, this is an Amazon warehouse!
If ROX Financial is successful, it would possibly be the first-ever real estate company to go public despite owning just one (1) single property.
GRIT’S TAKE: The company’s goal is to use the capital raised from the IPO to expand its portfolio with similar warehouses that it would then lease to Amazon. With e-commerce continuing to surge despite the pandemic subsiding, Amazon is not the worst online retailer to hitch your wagon to if this is your business model…
GRIT’S ACTION: Diamond hands – industrial REITs with e-commerce focus (up nicely on one of them!)
Want to find out which stocks Genevieve actually owns? Keep reading below!
UNDER THE RADAR*.
Calling all bankers! Have a client that is looking for a large injection of cash? Did you know you can make up to $150,000 in UPFRONT commission with JUST 1 referral? Let me introduce you to TVT Capital. A market leader in bridge loans of up to US$15MM in industries like O&G, Cannabis, Law Firms and Wholesalers. Contact them NOW!
The bull case for Flora Growth just got a lot stronger. They signed a sales agreement with the largest Colombian distributor representing up to US$10MM in expected annual sales. PLUS, Flora expects to close the acquisition of Kock & Gsell which would add another +US$7.5MM to their top line. Keep your eye on this REVENUE MACHINE!
Over 6 million adults in North America suffer from heart failure resulting in healthcare costs of over $30 billion annually. Cardiol Therapeutics is a clinical-stage pharmaceutical company that’s developed ultra-pure, high concentration CBD treatments to fight heart failure. Their shares are in the process of being uplisted to NASDAQ!
New World wants to enhance the relationship between user and creator. That’s why they built the first ever augmented reality NFT platform where consumers can interact with their favorite artists, musicians, celebrities, and companies on a global scale. They were just acquired by publicly traded DeFi firm Graph Blockchain!
Don’t buy Bitcoin, earn it. Earn 1.5% back in Bitcoin on every purchase with the BlockFi Bitcoin Rewards Credit Card. There are no fees* and you earn daily interest in crypto on your Bitcoin rewards. Click here to learn more – Terms Apply
*This is sponsored advertising content
How’s Grit playing it? Find out!
Now you can watch how a pro invests her real money in real-time with premier access to Genevieve’s investment portfolio!
Join hundreds of people who are following her NOW!
What will you get?
Genevieve’s Stock Positions in Real-Time
Her Buys & Sells Daily
Private Deal Flow (seed rounds aka founders’ rounds and choice private placements!)
Not only that, every month you’ll get a newsletter explaining the rationale behind the major changes in her portfolio so that you’re not just following along, you’re LEARNING!
Sign-up NOW to follow her moves!
*SOURCES
1. Bloomberg
Disclaimer: Grit Capital Corporation is a publisher of financial information, not an investment advisor. We rely upon the “publisher’s exclusion” from the definition of investment advisor under Section 202(a)(11)(D) of the Investment Advisors Act of 1940 and corresponding state securities laws. We also rely on the exemption from registration under Section 34 of the Securities Act (Ontario) and its equivalents in other Canadian jurisdictions.
We do not provide personalized or individualized investment advice or advice that is tailored to the needs of any particular recipient. Any information provided as part of the services is impersonal and not specific to any person’s investment needs. You acknowledge and agree that no content published or otherwise provided as part of any service constitutes a personalized recommendation or advice regarding the suitability of, or advisability of investing in, purchasing or selling any particular investment, security, portfolio, commodity, transaction or investment strategy. To the extent that any of the content may be deemed to be investment advice or recommendations in connection with a particular security, such information is impersonal and not tailored to the investment needs of any specific person.
No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. Grit Capital Corporation does not provide individual investment counseling, act as an advisor, or individually advocate the purchase or sale of any security or investment. You assume the entire cost and risk of any investing or trading you choose to undertake. You are solely responsible for making your own investment decisions.
Grit Capital Corporation is NOT a registered investment advisor or dealer. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments discussed in this publication should only be made/considered after consulting with your investment advisor and only after reviewing the prospectus, other offering materials or financial statements of the issuer in question. Reading and using this website, newsletter or any content created by Grit Capital.
Corporation you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.