🍋 Wall Street's Layoff Season
"If I argue with someone broker than me, the only outcome is that I get broker." — Kanye West (on ongoing struggles with Adidas/Gap)
Good Morning! If you thought the Yeezy brand wasn't wild enough, your wish has come true. Kanye West says he'll finish out current contracts, but there will be "no more companies standing in between me and the audience." Peloton co-founders are also leaving the company in an executive shake-up. Starbucks plans to shake things up too, unveiling a "reinvention strategy" at its investor day today.
Another big reveal today is the inflation report, as headline CPI is expected to decline by 0.1% because gasoline and travel costs have fallen. Not for long though, since airfare-tracker Hopper is predicting the most expensive holiday travel season in five years.
It's sweatpants season 24/7/365, which means y'all need to have Public Rec’s All Day Every Day Pant.
1. Story of the Day: Wall Street's Layoff Season
Autumn is here and that means the return of a bunch of great things, like football, and pumpkin spice everything! Also back, but not so great, are layoffs on Wall Street. Goldman is back to its annual cut, and trimming the fat around the office.
Several hundred roles are set to be eliminated starting this month, according to folks familiar with the matter. The total number is less than some previous years, but it's back to business after the pandemic put the exercise on pause.
These layoffs are the result of a drop in revenue after many record years. In July, Goldman said it planned to pump the breaks on hiring, and restart annual performance reviews in an effort to lower expenses through this "challenging operating environment." Challenging is right, as analysts expect the firm to post a more than 40% drop in earnings this year.
A vicious slowdown in IPOs and other investment banking activity has been offset by trading, but affected capital markets and asset management numbers. Trading posted a 32% surge in revenue, while investment banking revenue fell 41% in Q2.
Short Squeez Takeaway: The good news is this cull is supposed to be on the smaller end of the 1-5% historical range. The other good news is that the reviews are targeting low performers, which can't be any of y'all because you read Short Squeez every morning! Still, best of luck everyone. Start your day with this newsletter, and finish the year strong.
2. Markets Rundown
Stocks were up as everyone awaits for the US CPI inflation report today, and Ethereum was down ahead of the expected completion of "The Merge" later this week.
Movers & Shakers
- (+) Bristol-Myers Squibb ($BMY) +3% after the FDA approved its oral treatment for plaque psoriasis.
- (+) Carvana ($CVNA) +15% because it was upgraded to overweight by Piper Sandler.
- (–) Amgen ($AMGN) -4% since BMY's drug will compete with Amgen's Otezla.
- BayPine raises $3 billion for its inagural fund
- Gotham Greens, a NYC indoor farming startup, raised $310 million
- Mysten Labs raises $300 million, aims to onboard one billion users to web3
- Nimbus Therapeutics, a pharmaceutical startup, raised $125 million
- Tonal Systems, an at-home fitness startup, raised $100 million
- Lumafield, a desktop CT scanner manufacturer, raised $35 million
3. Top Reads
- Elon's ex to auction off his pictures (BB)
- America is doing better than you think (YF)
- ECB has more rate hikes in store - but don’t expect another whopper (CNBC)
- Big investors favoring large-cap stocks for rest of 2022 (MW)
- Twitter calls Elon Musk’s argument for terminating merger ‘invalid’ (Axios)
- Goldman economist says August CPI will be another ‘soft’ one (YF)
- Goldman’s Apple Card business has surprising subprime problem (CNBC)
- How quiet quitters are costing companies money (Fox)
- The tectonic plates of global economy shift (Reuters)
- Amazon plans job cuts in healthcare business after shuttering telehealth service (CNBC)
A Message from Public Rec: Tis' Sweatpants Szn
The pandemic has completely changed how we dress, both inside and outside the office.
You no longer have to wear uncomfortable slacks to the office. Now you can wear sweats all the time! What? Yes!
Public Rec’s All Day Every Day Pant is a core staple of any wardrobe.
Seamlessly make the translation from the work day to happy hour to movie night on the couch in the All Day Every Day Pant.
4. Book of the Day: The Secret Life of Groceries
The miracle of the supermarket has never been more apparent. Like the doctors and nurses who care for the sick, suddenly the men and women who stock our shelves and operate our warehouses are understood as 'essential' workers, providing a quality of life we all too easily take for granted. But the sad truth is that the grocery industry has been failing these workers for decades.
In this page-turning expose, author Benjamin Lorr pulls back the curtain on the highly secretive grocery industry. Combining deep sourcing, immersive reporting, and sharp, often laugh-out-loud prose, Lorr leads a wild investigation, asking what does it take to run a supermarket? How does our food get on the shelves? And who suffers for our increasing demands for convenience and efficiency?
The product of five years of research and hundreds of interviews across every level of the business, The Secret Life of Groceries is essential reading for those who want to understand our food system--delivering powerful social commentary on the inherently American quest for more and compassionate insight into the lives that provide it.
“Food is the business of eating—grocery, we’ll see, that’s completely different; it’s the business of desire.”
5. Short Squeez Picks
- 9 useful advantages of waking up at 5:00 am
- The case for letting yourself be bad at something
- Don’t send your kids to the Ivy League
- Step-by-step guide to building an interactive Excel Dashboard
- 5 pieces of career advice shaped by economics and psychology
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6. Daily Visual: Holiday Shopping Growth Expected to Cool
Year over year holiday retail (Nov. 1 - Dec. 24) sales growth
7. Daily Acumen: Volatile Times
“Calm plants the seeds of crazy.
If markets never crashed, they wouldn’t be risky. If they weren’t risky, they would get expensive. When they’re expensive they crash.
Same for recessions. When the economy is stable people become optimistic. When they get optimistic, they go into debt. When they go into debt, the economy becomes unstable.
Crazy times aren’t an accident – they’re an inevitability.
The same cycle works in reverse, as depressed times create opportunities that plant the seeds of the next boom.
One way to summarize it: Nothing too good or too bad lasts indefinitely.”
Source: Collaborative Fund
8. Crypto Corner
- What ETH holders should know about the Merge
- Ledger aims to fine-tune pitch for untouchable crypto wallet
- A bad year for crypto is a really bad year for crypto miners
- Ethereum blockchain to undergo major upgrade to cut energy use
- Bitcoin may be down but crypto and NFT interest is here to stay
- Starbucks says reward members will be able to earn and buy NFTs soon
9. Memes of the Day
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