🍋 75 bps of PAIN

Together With

Good Morning! A rough year for Opendoor got even worse this week. The iBuying real estate platform announced it will cut 18% of its staff. Credit Suisse’s chairman wants you to know his bank is not for sale - he says the firm will stay independent as it restructures.

A judge blocked Penguin Random House’s merger with Simon Schuster. The PowerBall jackpot is at $1.2 billion, Elon Musk said it will take weeks for suspended Twitter accounts to be reinstated. And options traders are getting burned betting on lower volatility - if there’s one thing we’ve learned over the past few years, it’s that nobody has any idea wtf is gonna happen to the stock market...

If you've got a bunch of credit cards and want to maximize your rewards on every purchase, let Lever do all the optimization automatically for you. Check out their Chrome Extension here.

1. Story of the Day: 75 bps of PAIN

Jerome Powell really had us in the first half. After previously hinting he might slow the pace of rate hikes, the Fed chairman seemingly backtracked yesterday.

Investors felt a little duped. Stocks rallied yesterday before Powell’s 2:30pm press conference, but then took a nosedive after Powell said the economy still has a long way to go.

Max Gokhman, an investor based in California, summed up Powell’s mixed signals “as if investors came to a haunted house and got candy, but once they unwrapped it, saw it was soggy broccoli.” 

Powell thinks inflation will peak at a higher level than previously anticipated. He thinks it’s too early to talk about pausing rate hikes. The Fed is committed to slowing the economy to tame inflation, even if it lasts a little longer than some thought.

Americans are starting to feel some pain from the economic slowdown. The S&P 500 is down almost 22% on the year, consumer spending is slowing, and CEOs are bracing for a recession and layoffs. Based on the Fed’s comments yesterday, it seems like the economy can expect more pain in the coming months.

Takeaway: Investors hoped for a quick Fed ‘pivot’, and many economists and business leaders called on the Fed to slow down the pace of rate hikes. The stock market has become increasingly influenced by what JPow says this year, and there are likely more ups and downs as the Fed unwaveringly fights inflation.

2. Markets Rundown

If you want access to Wall Street insider interviews, industry deep-dives, and investment ideas, check out our Insiders newsletter.

Stocks had their worst 'Fed' day since January 2021 as the Fed doesn't plan to stop tightening soon.

Movers & Shakers

• (+) Chegg ($CHGG) +22% after the homework-helper platform beat earnings.

• (+) Match Group ($MTCH) +4% the Tinder parent company increased revenue after more are willing to pay for online dating.

• (–) Tupperware ($TUP) -42% over bankruptcy fears for the kitchen product manufacturer.

Private Dealmaking

• Volocopter, a German air taxi manufacturer, raised $182 million

• Icertis, a contract management software company, raised $150 million

• Alation, a data cataloging software provider, raised $123 million

• Valera Health, a virtual mental health provider, raised $45 million

• Fox Robotics, a startup that manufactures self-driving forklifts, raised $20 million

• Gaw Capital Partners will buy Blackstone’s Tokyo-area warehouses for $540 million

Top Reads

• Is Elon Musk too distracted to run Tesla? (YF)

• Hiring is still booming in some industries - but falling in others (CNBC)

• Albertsons sued to stop the $4 billion payout ahead of Kroger merger (Axios)

• Washington Commanders owner hires Bank of America to explore sale (CNBC)

• Maersk CEO says shipping slowdown indicates a recession (CNN)

• CVS and Walgreens reach $10 billion deal to settle opioid claims (NPR)

• UBS economist thinks rising profits are driving inflation (Hill)

• Etsy beats revenue, rosy guidance (CNBC)

• Hong Kong bankers say the worst is behind them (CNN)

A Message from Lever

The credit card game is tough - it’s hard to know which credit card to use to get the maximum rewards.

There’s so many different factors to consider to actually make the best decision when shopping.

Lever is a Chrome extension that makes sure you always use the best credit card to maximize your rewards, every time.

Lever brings all of the complicated reward details to the checkout page. Use the best card every time to get more miles, cash back, points and more.

It’s super easy and you don’t need to give them your credit card details.

Just download the extension, tell them the rewards you like, and move on. *Mobile capabilities are coming soon.

4. Book of the Day: Super Abundance

After analyzing the prices of hundreds of commodities, goods, and services spanning two centuries, Marian Tupy and Gale Pooley found that resources became more abundant as the population grew. That was especially true when they looked at “time prices,” which represent the length of time that people must work to buy something.

To their surprise, the authors also found that resource abundance increased faster than the population―a relationship that they call “superabundance.” On average, every additional human being created more value than he or she consumed. This relationship between population growth and abundance is deeply counterintuitive, yet it is true.

Why? More people produce more ideas, which lead to more inventions. People then test those inventions in the marketplace to separate the useful from the useless. At the end of that process of discovery, people are left with innovations that overcome shortages, spur economic growth, and raise standards of living.

But large populations are not enough to sustain superabundance―just think of the poverty in China and India before their respective economic reforms. To innovate, people must be allowed to think, speak, publish, associate, and disagree. They must be allowed to save, invest, trade, and profit. In a word, they must be free.

“The world currently needs 1.6 Earths to satisfy the demand for natural resources.”

5. Short Squeez Picks

• 4 secrets to having emotionally intelligent arguments

• How to stop procrastinating by boosting your willpower

• 6 rules to become more charismatic

• Why you should stop saying ‘I’m sorry’ at work - and what to say instead

• 30 productivity tips from ‘Atomic Habits’

What Else to Listen To

What’s Your Problem? A New Podcast for Innovators

How do you grow a niche business (ramps for weiner dogs!) when a pandemic blows up your supply chain? How do you convince people to buy a home on the Internet? The new podcast, What’s Your Problem? gives listeners the inside scoop on how leaders are facing their business problems head-on.

Former Planet Money host Jacob Goldstein talks with really smart people figuring out how to do things that no one on the planet knows how to do. Entrepreneurs and engineers share the future they’re going to build – once they solve a few problems.

Listen now wherever you get podcasts.

6. Daily Visual: Gender Representation on S&P 500 Boards Reach new Milestone

Share of first-time S&P 500 directors from underrepresented groups, 2022

Source: Axios

7. Daily Acumen: Making Decisions

“You can tell how good someone is at making decisions by how much time they have.

Busy people spend a lot of time correcting poor decisions, so they don’t have time to make good decisions.

Good decisions need good thinking, and that requires time.”

Source: FS Blog

8. Crypto Corner

• Binance boss hints at crypto future for Twitter

• The people making real-life money in the Metaverse

• NFL crypto video game kickoff draws closer

• DeFi could replace institutions entirely

• Why crypto winter is only getting worse

• Judge orders probe to investigate if Celsius was a Ponzi

9. Memes of the Day

 Advertise With Us / Wall Street Shop / Private Equity Course

*****