Black Swan Street Weekly Stock Market Summary (May. 6-May. 10 2024)

Welcome to Black Swan Street!

Welcome back to another edition of the best business and finance newsletter on the block: Black Swan Street.

It was a crazy week, so let’s jump in:

• Strong Q1 Earnings Drive Market Rally📈

• The Swan’s Selections🦢

• In Other News🗞️

• Next Week In The Stock Market🔮

• The Swan’s Story Of The Week🦢

Read time: 7 minutes

Strong Q1 Earnings Drive Market Rally📈

Even with market uncertainty, stocks have been largely resilient in recent weeks. 

Reports of sticky inflation and the risk of the Fed holding interest rates higher for longer have not done much to damage the stock market.

We can thank a better-than-expected set of first-quarter earnings for that. 

With over 80% of companies in the S&P 500 done reporting their metrics, the benchmark index is slated to pace at a 5% growth rate for the first quarter in terms of earnings per share.

This is the largest increase, year-over-year, since the second quarter of 2022. It's higher than the 3.2% growth analysis predicted prior to the start of the earnings season.

But one can say that this doesn’t make any sense. Higher interest rates usually hurt U.S. stock valuations.

Instead, the stock market seems to have a mind of its own, as strong Q1 earnings have done a great job supporting stocks even as lofty expectations and high rates raise the bar for what it takes to crack the market.

➡️Read more on why that is (here)

The Swan’s Selections🦢

💲Reddit CEO Owns 61.5% of Class A Shares. Social platform, Reddit, went public back in March and was valued at $6.4 billion. Well, according to a regulatory filing, co-founder and CEO Steve Huffman owns 62.4 million Class A shares.

✨Disney Stock Falls. Disney+ and Hulu, posted an operating income of $47 million, barely squeaking in their first profit in company history. However, the company expects weaker results for this business segment for the current quarter, which has caused the stock to fall 10% in early trading.

🏈Private Equity Potentially Entering The NFL. Proposals in discussion could let NFL owners sell up to 30% of the team to approved investment collectives (the most any one fund could own in a team would be 10%).

⚡️Texas Electricity Prices Soar. Texas electricity prices rise almost 100-fold as a high number of power-plant outages raise concerns. Spot prices at the North Hub, which includes Dallas, jumped to more than $3,000 a megawatt hour versus about $32 at the same time earlier in the week.

🫙Siracha Shortage Coming? Major Siracha company Huy Fong Foods plans to halt production until Labor Day, causing panic among fans as they scramble to get ahold of the sauce before stores run out. The shortage can be blamed on jalapeño chili peppers as they aren’t “red” enough.

🖥️Dell Data Breach. The computer giant is warning its customers of a data breach affecting over 49 million customers. If you’ve purchased anything from Dell in the last seven years, likely the Dark Web now knows as well.

In Other News🗞

• U.S. added fewest jobs in six months as unemployment rose - BBG

• Apollo Global and Sony Pictures Entertainment are in formal negotiations with Paramount Global over a $26B takeover bid - NYT

• PE firms step up to edge banks out of low-risk lending - FT

• Hamas accepted a Gaza ceasefire proposal - AP

• Morgan Stanley and Barclays are preparing a WBS debt package to finance Roark Capital’s $9.6B LBO of Subway - BBG

• Wall Street bonuses expected to rise as deals return - RT

• Uber’s European rival Bolt is expanding in the U.S. - BBG

• TikTok sues to block U.S. divest-or-ban law - BBG

• U.S. backed Colorado’s bid to block supermarket giant Kroger’s $24.6B acquisition of Albertsons - BBG

• Quant firms seek to get in on bond markets - YF

• Private equity targets India’s healthcare sector with record investments - FT

• Sweden becomes second rich nation to cut rates - WSJ

Next Week in the Stock Market🔮

Earnings Calendar Next Week:

Economic Calendar Next Week:

The Swan’s Story Of The Week🦢

🏦Wall Street Banker Death Ignites a Firestorm

The death of a 35-year-old Bank of America associate has caused a major disturbance in Wall Street. Many are slamming the banking industry for its toxic work culture, which may have contributed to his death. 

The former Green Beret, Leo Lukenas III, died of “acute coronary artery thrombus” at age 35 last Thursday, according to a Reuters report. He leaves behind his wife and two young children. 

This unfortunate tragedy occurred after he had allegedly been working for over 100 hours a week for the past several weeks on a $2 billion merger as part of the bank’s Financial Institutions Group. 

The Wrap-Up🔄

🎊🎉 That’s it for this week of Black Swan Street🎉🎊

Per the usual, let us know what you thought⬇️