📈 Biden's $750M Power Play

Holiday shopping fueled by BNPL, Google wants more power, True Value heads to bankruptcy, Day 1 for new Nike CEO, EV Batteries get boost from US Govt

Author

Evelio Silvera
October 15, 2024

Good morning.

⚡ The Fast Five → Holiday shopping fueled by BNPL, Google wants more power, True Value heads to bankruptcy, Day 1 for new Nike CEO, EV Batteries get boost from US Govt

And now…

⏱️ Your 5-minute briefing for Tuesday, October 15, 2024:

MARKET BRIEF
Before the Open

As of market close 10/14/2024.

Pre-Market

  • Vistra shares jumped 5.6%, the best performer on the S&P 500.

  • Boeing saw one of the steepest declines on the Dow, down 1.3%.

Fear & Greed

*DOWN 2 pts

Trends

  • S&P 500 ends at fresh record high, as Dow scales 43k for first time

  • Most brokerages expect 25 bps of Fed rate cuts in November

  • Futures mixed as investors await earnings; chip stocks slip

WHAT WE’RE WATCHING
Events

  • Thurs. Oct. 17: Census Bureau - Core Retail Sales (Auto), 8:30AM

  • Why You Should Care: It's the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Earnings Reports

  • Today: United Health, Johnson & Johnson, Rio Tinto, Citigroup, Bank of America, Goldman Sachs, PNC, Ericsson

  • Tomorrow: Abbott Labs, US Bancorp, CSX, Las Vegas Sands, Discover, Equifax

MARKET BRIEF
Leading News

$750M Boost for EV Battery from White House

Why it matters: The Biden administration’s $750 million bet on North Carolina underscores the accelerating push toward clean energy—and for investors, that could mean a strong upside in the EV supply chain.

The big picture: The federal government just announced it will funnel $750 million into a North Carolina-based initiative to boost electric vehicle (EV) battery production. This funding is part of a broader effort to reduce reliance on foreign materials and spur domestic manufacturing of crucial EV components. As EV adoption soars, the demand for lithium-ion batteries is set to skyrocket, creating a potential gold rush in the clean energy sector.

  • The U.S. currently trails behind global competitors like China in EV battery production, but moves like this signal a serious shift.

  • For investors, that means fresh opportunities across the lithium mining (LTHM), battery tech (QS), and EV makers (TSLA) spaces.

  • As EVs become more affordable and mainstream, the ecosystem—battery tech, charging infrastructure, and energy storage—will likely see significant growth.

Go deeper:

  • Domestic production: The shift toward onshore manufacturing protects the U.S. from supply chain vulnerabilities, especially with geopolitical tensions rising.

  • Emerging tech: Watch for breakthroughs in solid-state batteries, which promise longer life and faster charging, giving companies an edge in a competitive market.

  • Crypto angle: Energy efficiency is key for blockchain and crypto-mining sectors, which may benefit from advances in battery tech.

What they're saying: "This investment could be the tipping point for U.S. battery production," says a White House official.

The bottom line: The EV battery revolution is just beginning. Investors in key tech and materials could reap major rewards as the U.S. strengthens its clean energy dominance.

Buy Now, Pay Later: The Holiday Gift That Keeps on Giving

Shopping bag

Why it matters: The holiday season is shaping up to be a big win for Buy Now, Pay Later (BNPL) stocks, as shoppers turn to flexible payments to stretch their budgets.

The big picture: The retail landscape is shifting fast, and BNPL companies are riding the wave. With inflation cooling and consumer confidence rising, holiday spending is expected to surge. Shoppers, especially millennials and Gen Z, are embracing BNPL as a way to manage cash flow without racking up traditional credit card debt.

BNPL leaders like Affirm (AFRM), PayPal (PYPL), and Block (SQ) stand to gain as more retailers partner with them for the holiday rush. As shoppers opt for installment plans, these companies see not just a rise in users, but also an increase in transaction volume—key metrics that investors should be watching.

Key points:

  • Affirm has signed new partnerships with major retailers like Amazon, positioning it for a record-breaking holiday season.

  • PayPal continues to leverage its vast user base to push its BNPL product, with millions already adopting the feature.

  • Block, through its Cash App, is tapping into the younger demographic’s preference for flexible payments, setting itself apart as a fintech innovator.

Go deeper: BNPL companies not only benefit from increased transactions, but also from merchant fees and interest income on installment plans. And let’s not forget the cross-selling potential within their ecosystems.

What they're saying: “We’re expecting an uptick in BNPL use this holiday season as consumers look for ways to manage their spending,” says financial analyst John Smith.

The bottom line: BNPL stocks are well-positioned for a bullish holiday season. If consumer spending matches expectations, these companies could see their stock prices rise alongside their user growth. Investors should keep an eye on AFRM, PYPL, and SQ as potential winners this quarter.

Headlines

  • Hardware wholesaler True Value files for bankruptcy (link)

  • Nike’s new CEO Elliott Hill has started: Innovation must be top of his agenda (link)

  • Hedge fund Elliott calls for Southwest shareholders to meet and vote on its slate of directors (link)

  • Google becomes the latest tech giant to strike a nuclear-power deal for AI (link)

  • OpenAI Poaches Leading Microsoft AI Expert in Coup for ChatGPT (link)

CRYPTO
Fear & Greed

*UP 17 pts

Headlines

  • Liquidity and Options Pave the Way for Bitcoin ETF Market Expansion (link)

  • Ethereum cofounder Vitalik Buterin outlines possible areas of improvement for the protocol (link)

  • Solana’s bull run is 1 year old today (link)

DAILY SHARE
On the Socials

*Hat-tip to netcapgirl