🍋 Gen Z is the Captain Now

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Good Morning! Walmart sounded alarms Monday when it slashed its quarterly and full-year profit forecasts because of an inventory pileup and aggressive markdowns. Stock fell 8% on the news. The IMF has also slashed its forecasts for the global economy, seeing a "gloomy" picture ahead. On the bright side, millennials have more than doubled their average net worth in the pandemic. Speaking of changes since the pandemic, Credit Suisse CEO Thomas Gottstein, who has been in charge of the bank since February 2020, will leave the bank as a result of a broader effort to turn around the firm.

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1. Story of the Day: Gen Z is the Captain Now

Gen Z, the demographic that couldn't care what anybody thinks, is now controlling what everybody thinks. Whereas older generations used to be all about how many likes a post got, Gen Z is pivoting away from traditional social media addiction, and the big boys will have to play along.

According to the Pew Research Center, Gen Z is the only age group showing declines in social media use recently. They have a smaller number of apps for specific purposes like Twitch for live-streaming/gaming, Discord for private chats, and BeReal for candidly updating their friends. This shift has come from Gen Z being turned off by clickbait, and thirstiness from the Instagrams and Snaps of the world.

Other than TikTok, every social media app reported less use by Gen Z last fall. Nowadays, as users are more aware (and therefore concerned) about their online presence and privacy, they are much more deliberate about the apps they interact with.

The pandemic also played a big role in the paradigm shift, as the young and hip generation (am I automatically not part of that for saying "young and hip?") had to create communities online, during some of their most formative years. Taking the knowledge of stranger danger online that I didn't grow up with, Gen Z knows to be more thoughtful about these communities. This leads to more private messaging, and less joining of the "Donut Fan Club" on Facebook.

Short Squeez Takeaway: First of all, if you're not part of the Donut Fan Club, I don't trust you. I've never met a donut I didn't like, and don't understand how anyone could. Secondly, I wish I grew up with online presence awareness, as I could have saved myself from some embarrassing posts. In the end, Gen Z being less interested in the novelty of social media, and more focused on the purpose/effects of it, could be great for the world.

2. Markets Rundown

Equity markets were off big today after Walmart cut profit guidance due to inflationary pressures sending consumers to lower-margin products.

Movers & Shakers

• (+) 3M ($MMM) +5% thanks to quarterly earnings that beat Wall Street's expectations.

• (+) General Electric ($GE) +5% also thanks to a quarterly earnings beat.

• (–) Coinbase ($COIN) -21% on news that the SEC is probing the crypto firm, looking into its listings of digital coins.

Private Dealmaking

• China plans real estate fund worth up to $44 billion for distressed sector

• Chelsea Clinton backs $7.5 million seed round for pediatric telehealth startup Summer Health

• Ginkgo Bioworks to acquire Zymergen, a biotech company, for $300 million

• Energy Exploration Technologies, an Austin-based lithium start-up, raised $450 million

• Oak Hill Capital to invest $250 million in Omni Fiber, a Cincinnati-based fiber broadband provider

• Aptos Labs, a blockchain startup, raised $150 million

3. Top Reads

• Job switchers are earning a lot more than those who stay (WSJ)

• Billionaire Tom Steyer bets on weather stations to battle climate (BB)

• Investors bet Fed will need to cut rates next year (WSJ)

• Big Tech stocks on tap to swing markets (Axios)

• Why Meta and Alphabet should dance on TikTok’s grave (Forbes)

• Morgan Stanley sees more Fed hikes while JPMorgan expects pivot (YF)

• Calling in sick or going on vacation, workers aren’t showing up this summer (WSJ)

• How IBM could become a digital winner (Forbes)

• The sings inflation has peaked - but can it come down fast enough? (WSJ)

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4. Book of the Day: The Noise Factor

There is an inherent, invisible flaw in how our financial system operates: the way the markets are built, they turn insignificant day-to-day deviations, or “noise,” into harmful volatility.

As high levels of noise mask reality, people make money in the market regardless of the actual value of companies, commodities, or the economy itself.

The growing disconnect between financial markets and the real economy changes the very nature of the financial marketplace. The market stakeholders focus more on shifting gains and losses among participants rather than on creating real value.

The book reveals the fundamental principles required to turn off our economy’s noise amplifiers and provides a vision for a more productive financial market.

“The Noise Factor is a financial fantasy that transports the reader to an alternate reality.”

5. Short Squeez Picks

• Why these ‘unretirees’ went back to work

• Five types of talent behind the great resignation

• The fastest-selling new car in America May surprise you

• Low-wage workers want higher pay and more training - not bigger titles

• Ice cream, bagel machinery, and two priceless life lessons

6. Daily Visual: Wage and Price Growth

Source: Axios

7. Daily Acumen: Balance is Everything

“Every good idea and every admirable trait can be taken too far.

A few big ones where balance is everything:

Confidence without arrogance.

Optimism without complacency.

Independence without isolation.

Skepticism without cynicism.

Respect without idolizing.

Loyalty without fealty.

Open-minded without gullibility.

Opportunistic without FOMO.

Patience without stubbornness.

Caution without pessimism.

Risk without recklessness.

Passion without addiction.

Ambition without greed.

Honesty without disrespect.

Aspiration without insatiability.

Intelligence without overconfidence.

Success without ego.

Adaptable without being erratic.

Learning without cherry-picking.

Brevity without oversimplifying.

Simple without vapid.

Leadership without dominance.

Marketing without charlatanism.

Connection without dependance.

Luxury without excess.

Saving without hoarding.

Praise without flattery.”

Source: Collaborative Fund

8. Crypto Corner by Bonkalytics.com

• Coinbase faces SEC investigation over cryptocurrency listings

• Top VC issues dire prediction after Terra Luna-led crash wiped $2 trillion from crypto market price

• Debating the case against crypto

• The road to digital currency

• Why crypto gets crushed as the dollar delights

• How Kirkland & Ellis became the go-to law firm for crypto bankruptcies

For more crypto-focused content, sign-up here.

9. Memes of the Day

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*Stock Advisor returns of 375% as compared to S&P 500 returns of 121% as of 5/4/2022. Not all picks have performed as well. Past performance is not an indicator of future results. All investing involves a risk of loss.

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