🥩 Costco's New Gold Bars

Happy Saturday to everyone on The Street. And welcome to the second edition of our super skimmable “Street Tweets” newsletter. The feedback we got from last week’s edition was incredibly positive so thank you for allowing us to test and try new formats.

To that end, keep an eye out for a surprise this Monday. We think you’re going to like it. And if you don’t, you know you can always reply directly to this email.

Before we dive in, we’d like to call your attention to our new referral program. It’s super simple:

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Hedge fund investor letters are an incredible way to get a sneak peak into the brightest minds in finance.

This week, we’re starting with Third Point’s Q1 2024 investor letter. Third Point is a New York-based hedge fund founded by Daniel S. Loeb in 1995.

Third Point’s Q1 letter includes comments on performance, their top five stock winners and losers, an economic outlook, tech outlook, and future outlook.

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MARKET REVIEW

TL;DR: This week, all three major U.S. indexes fell from record highs due to rising Treasury yields and tech sector corrections.

Core PCE rose 2.8% annually in April, aligning with expectations, while Q2 GDP growth was revised down to 1.3%, raising concerns about inflation's impact on consumer spending. Fed officials indicated no imminent rate cuts.

Company news included DraftKings shares dropping on a higher sports betting tax, GameStop raising $1 billion from a stock sale, and ConocoPhillips buying Marathon Oil for $17 billion. Retailers surged on strong earnings, while Salesforce and Tesla faced stock volatility.

Click here to read our full market review

MARKET PREVIEW

Economic Data

• Monday: S&P flash U.S. manufacturing PMI, Construction spending, ISM manufacturing

• Tuesday: Factory orders, Job openings

• Wednesday: ADP employment, ISM services, U.S. productivity (final revision)

• Thursday: Initial jobless claims

• Friday: Consumer credit, U.S. employment report, U.S. hourly wages

Earnings

• Monday: Bank of America, JPMorgan Chase & Co, AstraZeneca

• Tuesday: Allianz, Deutsche Telekom, Siemens

• Wednesday: American Airlines, Advanced Micro Devices, Allstate, Airbnb

• Thursday: Adidas, Lululemon, Infineon, Roche Holding

• Friday: Alphabet, Spirit Airlines, Diamondback Energy

😒 So much for wage growth outpacing inflation… For reference, the Consumer Price Index climbed to 3.4% in April from year-ago levels.

But let’s be honest — it’s not like the Indeed Wage Tracker is the “end all, be all” of US economic metrics. Earlier this month, compensation costs, a closely tracked wage growth metric, hit its highest level in a year during the first quarter.

What has your personal experience been?

💣 Just when it felt like headlines about Bill Ackman had finally slowed down, the billionaire hedge fund manager announced this bombshell!

Over the past few months, Ackman has found new social media stardom and infamy for waging war against Ivy League schools, citing hypocritical DEI policies and high-level plagiarism.

The Wall Street Journal believes that the timing of this plan to take Pershing Square public is a clear attempt to “capitalize on his [Ackman’s] social-media fame.”

Click here to read the full article (Subscripton needed)

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Learn more.

What’s going on here?

At a time when Wendy’s, McDonald’s, and Burger King are making headlines off of new “ultra-cheap deals” to win back inflation-weary consumers, Costco is selling heavy volumes of Japanese Wagyu?

Costco is known for its great deals, but deals only go so far with Wagyu. Three pounds of Wagyu steak is priced at $469.99 on Costco’s website.

The retail giant has certainly found an interesting niche given the current economic climate. In addition to Wagyu, Costco CEO Ron Vachris highlighted a sales spike in:

• Golf clubs

• Artificial trees

• $1,200 swing sets

• Gold bars (at least this one makes sense, given inflation)

A tale of two Western nations

The Canadian and US economies have historically grown and shrunk in tandem due to their close relationship and similar domestic policies.

However, Canada hasn’t been able to pull off the same post-pandemic recovery as the United States.

• Last year, the Canadian economy saw a growth rate of 1.1%, one of its weakest in recent years, while the US economy grew by 2.5%

• In Q1 of 2024, Canadian per-capita GDP fell short of the US by 10% (the largest gap between the two economies since 1965)

BMO Global Asset Management believes this is partially because Canada’s economy is more rate-sensitive than America’s due to things like household debt levels and the structure of the Canadian mortgage market.

Click here to read the full article from BMO

Make your money rise and grind while you sit and chill, with the automated investing and savings app that makes it easy to be invested.

Learn more.

Did someone say 2008 subprime mortgage crisis?

“Woke capitalism” aside, Bank of America isn’t alone in this renewed zero-down mortgage effort.

United Wholesale Mortgage recently launched its own zero-percent down mortgage program.

UWM's chief strategy officer stated that the “Initial demand has been huge. We already have a couple of thousands of loans submitted.”

The huge demand isn’t surprising… but it has concerned plenty who think we somehow managed to forget a massive lesson from the Great Recession.

TRIVIA

Last week we asked: What was the first company to be listed on the New York Stock Exchange (NYSE)?

The correct answer was Bank of New York.

This week’s question…