Sales Season Began Two Months Ago - Market Update September 23-27, 2024
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Welcome back to the Rambling Mind Newsletter. This is your Market Update.
Summary of Topics:
Companies
🎁Holiday Sales Coming SUPER EARLY
👵🏾Mama Always Said, "DON'T LIE!" Exxon did not listen
Stats of the Week
💊$969 vs $59: Which would you rather pay for your medication
🤑1% = 1.025%: How companies make more money from sales
🛍️$240.8 Billion will be spent this holiday season. MOST EVER!
Looking Ahead
🧑🏾🏭Rihanna said it best, "Work Work Work Work Work"
Sports I Love
🗑️Oh Look Garbage
⚠️Stumble
Extras
😶61% of Americans self-silence their true beliefs
Markets
Stocks keep climbing and making new all-time highs. I feel bad for everyone who decided money market funds were a better investment. You missed out on a 20% return. Now you did get 5% so it ain't that bad. For the rest of y'all who listened to Lady Wisdom and did nothing. Congratulations! Your money is making even more money.
YTD Results
Tale of the Tape
Companies
🎁Holiday Sales in Non-Holiday Months
Christmas may still be 3 months away but that isn't stopping retailers from announcing Christmas sales.
🔎Details: Amazon, Walmart, Target, and Best Buy all announced plans to begin holiday sales on the first week of October.
🤔Why: Consumers are not shopping right now. With excess pandemic savings gone, consumers have stopped shopping. It is forcing retailers to make major price cuts and inventory decisions. Holiday shopping makes up a large percentage of the total sales retailers make in a year. So, retailers are trying to get those sales earlier in the year:
Target lowered prices on 5000 items.
Home Depot rolled out Halloween decor in July
🤨Will It Work: This might be a great move from retailers. According to a survey from Bankrate, 48% of consumers plan to start their holiday shopping in September or October.
🙄My Takeaway: I like to say, "If you did not plan to spend money on an item and it is 50% off, you are not saving 50%. You are SPENDING 50%."
Ignore all these tactics from retailers to make the money in your pocket disappear then reappear in their bank accounts.
Exxon might have to learn this lesson by paying BILLIONS to the State of California.
🔎Details: On Monday, California state officials announced a lawsuit against Exxon. Cali said Exxon lied to the world about the effectiveness of recycling in order to continuing business as usual.
🗨️Response: An Exxon spokesperson said, “Instead of suing us, they could have worked with us to fix the problem and keep plastic out of landfills.”
PR Interpretation: Bruh, why you have to put us on blast? We could have just done nothing and hidden this under the rug.
🔁Background: I always believed that anything with the ♻️ symbol meant it could easily be recycled. Well, that is a lie. Only about 5% of all plastics in the US is actually recycled. Whether due to food contamination or plastic mixture, recycling is actually a complete waste of time.
According to California AG, Exxon has known about the limitations of recycling since the 1970s but kept studies hidden and kept the lie that recycling is the solution to counter one time use plastic.
Exxon spent HELLA money on lobbying state and local governments (not only in Cali) to restrict all bans on plastic production.
Even now, Exxon's "advanced recycling" is another PR stunt to distract from the fact that only 8% of the plastics are turned into new products. The rest is burned.
🤥Takeaway: For years, companies have been able to profit and ignore the issues their products cause on the world. Exxon is not the only oil company facing these lawsuits and California is not the only state that is suing companies.
States are done with believing the promises of these companies who enjoy unimaginable profits, but citizens have to take on the adverse effects.
My Takeaway: Things might finally be changing. Not because people found their conscience but because "kids" are slowly moving into positions of authority and forcing changes. An example is the lawsuit in Montana that forced the state to enact policies for the benefit of its younger residents.
However, it all depends on who wins the election. One political party has shown that company profits matter more than individual safety and wellness. From 2016 till now, many of the Environmental Protection Acts have been rolled back. Then the Supreme Court also depowered many of the Federal Agencies that protected the environment.
Stats of the Week
On Tuesday, Novo Nordisk CEO Lars Fruergaard Jørgensen, was questioned by Congress over its drug pricing. In the US, Ozempic (the superstar drug of today) costs $969/month vs $59/month in Germany.
🤨Why Does it Cost So Much IN the US: We love overcomplicated systems. Lars told Senate Committee the problem is “complex US healthcare system”, pointing the finger directly at pharmacy benefit managers (PBM) aka middlemen like CVS Health’s Caremark and UnitedHealth’s OptumRx. When drug makers reduce prices, PBMs tend to not offer the drug because they make less fees on those drugs.
According to a study by Adobe Analytics, every 1% price drop it leads to increase demand of 1.025% which translates to excess spending of $305 million. It is estimated that these "sales" will contribute $2-$3 Billion in excess spending from consumers.
🙄Takeaway: As we enter heavy holiday season which basically means sales season, just remember sales are not designed to help you save money. Businesses know exactly what they are doing. Sales are designed to get dollars into the pockets of retailers and manufacturers.
Now you can make it work for you, but it means you do not spend mindlessly just because you saw something on sale. If you are saving for an item and you see it on sale that is the only time you actually save money. Otherwise, you are playing into the tricks of these companies.
Adobe Analytics estimates that $240.8 billion will be spent this holiday season. This is from Nov.1 to the end of the year. An increase of 8.4% from last year.
Looking Ahead
Jobs
As Peter Lynch said, "There is always something to worry about."
With PCE (Personal Consumption Expenditure - the Fed's preferred inflation gauge) for August being only 2.2%. Investors are switching from worrying about inflation to worrying about the labor market. At least according to the news.
📅Key Dates to Panic Investors:
On Tuesday, JOLTS (Job Openings and Labor Turnover Survey)
On Wednesday, ADP will release its private employer payrolls.
On Thursday, weekly initial jobless claims.
On Friday, the grandaddy of the reports, the nonfarm payrolls for September.
If investors believe the labor market is regressing, expect the stock market to react very negatively (or not at all).
Stock Market
The End of September is upon us. This means the end of Q3 is upon us. This means it is time to enter a new Earning Season.
Sports I Love
🗑️Oh Look Garbage
I looked in the dictionary for a picture of trash; there was a Man U emblem as a reference. This team is such a disaster.
💢Who to Blame?: The Management? For an inability to get decent players that fit a system. Or having a sense of direction for the club.
The Coach? For seeming to have no idea what kind of system he wants to play or not being able to get his players up to speed?
The Players? For sucking and not living up to their talent level. Looking like absolute scrubs every time they step on the field.
The Fans? For continuing to believe that this steaming pile of 💩 can become gold.
I don't even know. The despair on a weekly basis is just too much.
Stumble
My shining Hope stumbled this week. They led the entire game but gave up a goal right at the end.
They gotta get their ish together cause if they keep messing up like this Barcelona will run away with the La Liga trophy this year.
Extras
Most Americans Agree On "Divisive" Issues
A new study by Populace, found that despite the public rhetoric we see from politicians and from the loudest noisemakers on the internet. Most people agree on a plethora of issues. The issue is most people just never say what they really think out in public.
This is a massive problem. Because it is giving room to the most fringe and extreme individuals in our communities. According to the study, 61% of Americans self-silence.
Per the Report, "The belief that there is social pressure to have the “right” opinion is pervasive in America today. In fact, a majority of Americans (58%) think that most people cannot share their honest opinions about sensitive topics.
They are not wrong: In the last year alone, 61% of Americans reported that they have avoided saying things that they believe because others might find them offensive. This includes a majority of all demographic groups — regardless of race, gender, age, income, or political affiliation — with Gen Z having the highest rate of self-silencing of any group (72%)."
In His Words: Todd Rose, CEO of Populace, put it best, "It would be tragic if we got led by a vocal fringe on both sides into positions and values that we don't privately hold, but that come to represent us as a country."
Hurricane Helene