🦢 Black Swan Street Weekly Stock Market Summary (August 14th - August 18th 2023)

Welcome, Finance aficionados!

Michael Burry’s new billion-dollar short position, Fogo de Chao acquired, Coinbase and crypto futures, Janet Yellen eating mushrooms.

Here’s what we got for you this week:

• The Big Short pt.2? 📉

• Earnings Summary 💰

• Headline Roundup 🗞

• Next Week in the Stock Market 🌎

Read time: 5 minutes

The Big Short pt. 2? 📉

Recognize this ugly mug? Well, if you don’t, it’s Michael Burry (aka the guy who the movie ‘The Big Short’ is based on). Great movie btw.

Well, anyways. He predicted the 2008 financial crisis, and his fund made ~$700 million from it. He predicted the ‘unpredictable’.

Now, he’s made a new bet on the stock market. Michael Burry is short ‘QQQ’ and ‘SPDR’, two ETFs that track the major index funds.

In layman’s terms, he’s bearish on the stock market.

And this isn’t some tiny bet he’s making. In fact, the combined notional value of this new bet is $1.6 billion. You can see his entire portfolio and positions here.

Very interesting stuff, especially considering that the S&P 500 isn’t far off all-time highs.

All this being said, Burry isn’t some oracle and he’s been wrong plenty of times in the past. Make your own decision with your own research. Making investing decisions strictly based on someone else’s convictions and positioning is a horrible strategy.

Earnings Summary 💰

In-Depth Earnings Dive:

Home Depot (HD)

• Adj. EPS $4.65 beats $4.46 estimate

• Sales $42.92B beats $42.25B estimate

• Announces $15 billion share repurchase authorization

• Sees FY Sales Down 2%-5%

• Sees FY EPS Down 7%-13%

Cardinal Health (CAH)

• Adj. EPS $1.55 beats $1.48 estimate

• Sales $53.45B beats $52.41B estimate

• Sees FY24 Share Repurchases of about $500 million

• Raises FY24 Guidance, Now Sees EPS of $6.50 to $6.75 vs prior $6.45 to $6.70

H&R Block (HRB)

• Adj. EPS $2.05 beats $1.89 estimate

• Sales $1.03B beats $1.01B estimate

• Sees FY24 Revenue $3.35B-$3.585B vs $3.56B estimate

• Raises Quarterly Dividend to $0.32 from $0.29

Target (TGT)

• Adj. EPS $1.80 beats $1.39 estimate

• Sales $24.77B miss $25.18B estimate

• Expects 2023 adjusted profit per share of $7-$8 vs $7.75-$8.75 estimate

• Comparable sales declines 5.4% vs 3.7% estimate

Cisco (CSCO)

• Adj. EPS $1.14 beats $1.06 estimate

• Sales $15.20B beats $15.05B estimate

• Sees Q1 Adj. EPS $1.02-$1.04 vs $0.99 estimate , Revenue $14.5B-$14.7B vs $14.62B estimate

• Sees FY24 Adj. EPS $4.01-$4.08 vs $4.04 estimate

• Sees FY24 Revenue $57B-$58.2B vs $58.38B estimate

Walmart (WMT)

• Adj. EPS $1.84 beats $1.70 estimate

• Sales $161.10B beats $160.27B estimate

• Sees Q3 Adj. EPS $1.45-$1.50 vs $1.49 estimate

• Sees FY24 Adj. EPS $6.36-$6.46 vs $6.30 estimate

Headline Roundup 🗞

• MSCI to acquire remaining 66% of the Burgiss Group for $697 million in cash, brings total to $913 million to acquire the company - MW

• U.S. Steel rejects $7.3 billion buyout offer from rival Cleveland-Cliffs - APN 

• Charles Schwab says its experiencing temporary lower net flows after TD Ameritrade deal spurring retail, advisory attrition - YF

• Harmony Biosciences to buy Zynerba Pharmaceuticals for up to $200 million - MW

• AMC to effect 10:1 reverse split on August 24th - RT

• UBS to pay $1.4 billion to settle fraud claims from 2008 crisis - BBC

• Discover Financial Services CEO & President stepping down - BW

• U.S. Retail Sales MoM: 0.7%, from previous 0.3%, and above 0.4% forecast

• Hindenburg reveals short on Brokerage Firm Freedom Holding - BBG

• PNC is selling $750 million of debt - BBG

• Sacks Parente Golf’s stock soars more than 600% in trading debut on Nasdaq - MW

• UK launches £1 billion fintech fund to compete with Silicon Valley - CNBC

• Aldi buying 400 grocery stores across Southeast - USAT

• Coinbase wins approval to list Crypto Futures in U.S. - CB

• Mortgage rates top 7%, hitting 21-year high - YF

• U.S. 10-Year hit its highest yield since 2008 - WSJ

• Seven U.S. states requested the FTC block Kroger’s $24.6 billion acquisition of Albertsons - RT

• Intel cancels $5.4 billion acquisition of Israel contract chipmaker Tower Semiconductor after their merger agreement expired without Chinese regulatory approval - RT

• Activist investor Starboard Value takes a nearly 10% stake in Bloomin’ Brand, the parent company behind restaurant chain ‘Outback Steakhouse’ - APN

• Softbank buys Vision Fund’s stake in Arm at $64 billion valuation - WSJ

Next Week in the Stock Market 🌎

Earnings Calendar Next Week:

What the Swan is watching:

Monday: Zoom

Tuesday: Lowe’s, Dick’s Sporting Goods, Medtronic, Macy’s, Baidu, BJ’s Wholesale Club

Wednesday: Kohl’s, Nvidia, Analog Devices, Advance Auto Parts, Williams Sonoma, Peloton

Thursday: TD Bank, Ulta Beauty, Royal Bank of Canada, Dollar Tree, Nordstrom, Gap, Workday, Intuit, Marvell Technology

Economic Calendar Next Week:

The Swan’s Picks 🦢

🍄 Janet Yellen vs Mushshrooms: Treasury Secretary, Janet Yellen, admits to eating ‘hallucinogenic’ mushrooms during China visit. This happened as part of a meal at a popular Chinese restaurant. She said she was not aware that the dish included psychedelic mushrooms (yeah, alright Janet).

🗽 New York City becomes latest to ban TikTok on government devices: Following in Montana’s footprints is New York. City agencies now have 30 days to remove the app and employees will lose access to TikTok from city-owned devices and networks.

⚽️ Signed Lionel Messi jersey goes up for auction: The jersey is signed and from his first ever game with FC Barcelona, while wearing number 10. It’s said “to be a $100,000+ jersey”

🍴 Fogo de Acquisition: The popular Brazilian steakhouse chain ‘Fogo de Chao’ just got acquired for $1.1 billion. Who was responsible for this madness? The private equity firm ‘Bain Capital’.

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The Wrap-Up 🔄

Okay. I’m sorry. I know I said last week Black Swan Street was going bi-weekly, but we can’t. Truth is, we aren’t ready behind the scenes. We don’t have the infrastructure in place to go bi-weekly (yet). And, we will never sacrifice quality for quantity.

So for now, still weekly. Every Friday.

As always, please let us know what you thought ⬇