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- 📈 Automation Showdown At Ports
📈 Automation Showdown At Ports
Activist investor wants a healthier CVS, OpenAI losing billions, Hurricane Helene causes complete destruction, China doesn't want Nvidia chips, Port strike looks imminent
Evelio Silvera
September 30, 2024
Good morning.
⚡ The Fast Five → Activist investor wants a healthier CVS, OpenAI losing billions, Hurricane Helene causes complete destruction, China doesn't want Nvidia chips, Port strike looks imminent
And now…
⏱️ Your 5-minute briefing for Monday, September 30, 2024:
MARKET BRIEF
Before the Open
As of market close 9/27/2024.
Pre-Market
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Fear & Greed
*DOWN 3 pts
Trends
Wall St Week Ahead Jobs data to test US stock market's soft-landing hopes
Last Week: Dow notches record close after tame inflation report
Last Week: US Equity Indexes Rise This Week as Gains Linked to China Stimulus Help Outweigh Mixed Inflation Print
WHAT WE’RE WATCHING
Events
Today: Fed Chair Powell Speaks at National Association for Business Economics Annual Meeting, 1:55PM
Why You Should Care: As head of the central bank, which controls short term interest rates, he has more influence over the nation's currency value than any other person. Traders scrutinize his public engagements as they are often used to drop subtle clues regarding future monetary policy.
Earnings Reports
Today: Carnival, IperionX, ReposiTrak, SolarBank
Tomorrow: Nike, Paychex, McCormick & Co, Acuity Brands
MARKET BRIEF
Leading News
Strike Looms with Automation Tug-of-War at Ports
Why it matters: A looming strike at major U.S. ports could disrupt supply chains and impact stocks across sectors, from retail (WMT, TGT) to tech (AAPL, AMZN).
The big picture: A brewing conflict between U.S. longshoremen and port operators over automation has triggered fears of a potential port strike. The unions want to halt the push for automating port operations, claiming it threatens jobs. But the economic reality… Automation is likely inevitable in a global supply chain that's already stretched thin.
Automation in shipping and logistics has been a long-term trend, helping boost efficiency and cut costs. Ports like those in Los Angeles and Long Beach are the gatekeepers for billions in goods. A disruption here could send ripple effects through shipping giants like CMA CGM and Maersk (AMKBY).
Yet, for investors, the real play may be in companies enabling this shift, like automation-focused stocks or even blockchain tech firms that could help modernize supply chains.
Key takeaways:
Automation is critical to keep up with rising global demand and tighter margins in shipping.
Major logistics companies are investing in AI, robotics, and blockchain tech to streamline operations.
Expect more labor disputes, but long-term gains could come from the adoption of smart technologies in the space.
What they're saying:
"Outlawing the effective use of technology will unquestionably doom our nation," warns Benchmark Capital's Bill Gurley, calling for potential government intervention.
The bottom line: Smart investors should watch for opportunities in automation tech stocks (ABB, KION) and alternative logistics players (FDX, UPS) that could benefit from port disruptions. But don't sleep on blockchain-based supply chain solutions – they might be the long-term winner in this old-school vs. new-tech showdown.
Activist Investor Seeks Prescription for Growth at CVS
Why it matters: CVS Health ($CVS) is facing pressure from activist investors, but this could unlock major value for savvy investors looking to capitalize on a potential turnaround.
The big picture: Activist fund Glenview Capital is pushing CVS to shake up its strategy. They're targeting CEO Karen Lynch, who has spearheaded the company's aggressive expansion into healthcare services. The stock has taken a hit, down nearly 30% this year, as Wall Street questions the company’s ability to integrate its recent acquisitions and regain market confidence.
But this is where it gets interesting. Activist involvement often sparks major changes that can drive stock prices higher. CVS could see a renewed focus on efficiency and shareholder returns, making it a prime candidate for a turnaround play.
Key takeaways:
Glenview’s involvement typically signals a potential restructuring, which could lead to asset sales, cost-cutting, or a pivot in strategy— all bullish signals for long-term investors.
CVS has diversified into areas like health insurance and pharmacy benefits, but the integration has been rocky. Streamlining operations could yield significant gains.
Valuation is compelling: With a price-to-earnings ratio under 10, the stock is trading at a steep discount compared to peers like UnitedHealth ($UNH) and Cigna ($CI).
What they’re saying:
“Investors should expect Glenview to push for more shareholder-friendly moves like buybacks or divestitures,” says one analyst at Jefferies.
The bottom line: CVS has the potential to rally if it can get its operations in line. Keep an eye on any strategic changes—they could be the catalyst that lifts the stock back to healthier levels. For long-term investors, this might be the right time to start accumulating CVS shares at a discount, especially if activist pressure drives meaningful change.
Headlines
'Complete Obliteration': DeSantis Says Hurricane Helene Damage Worse Than Idalia (link)
Here's Why China is Urging Its Companies to Forgo Nvidia's Chips (link)
Open AI: Burning cash and losing billions (link)
Apple Reportedly Exits OpenAI’s $6.5 Billion Funding Round (link)
TD Bank in Talks About Money Laundering Plea (link)
Freeport cranks up copper output as rivals scour for deals to grow (link)
CRYPTO
Fear & Greed
*DOWN 2 pts
Headlines
DAILY SHARE
On the Socials
*Hat-tip to AutismCapital