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China’s PMI jumps -> why you’ll want to pay attention

Mar 01, 2023

Good morning! 👋

The markets valiantly tried to make a stand in the wee hours but have all flipped to the downside as I type. The 10YR has popped, which means stocks’ll drop (again). 🤦‍♂️

Here’s my playbook.

The Internet’s Magna Carta moment

The Magna Carta was written in 1215 to codify the fact that the King of England and his minions were not above the law. That’s what Section 230 represents… a digital Magna Carta moment.

The stakes couldn’t be higher.

The US Supreme Court will rule on Gonzalez v. Google, a lawsuit in which the father of a victim of a 2015 terrorist attack in Paris claims that the defendants (Google) aided and abetted international terrorism by allowing ISIS to use their platforms to plan attacks and to threaten and intimidate others. The lawsuit also alleges that the defendants failed to take meaningful action to prevent terrorists from using their services.

The biggest issue of all... freedom of speech vs. content moderation.

Social media platforms and Big Tech have relied on Section 230 to protect them because they are classified as a platform rather than a publisher. Ergo, they are hosting user-generated content rather than generating content. So far, so good—until you get to the “recommendations” and “likes” used to drive traffic and promote specific content.

What a ruling means for your money.

Not all Big Tech is the same; there will be winners and there will be losers. I’ll be sharing detailed analysis with the One Bar Ahead® Family shortly, along with specific, actionable ideas for playing the situation as it develops. Trust me when I say, you do NOT want to get caught offsides!

Speaking of which...

People said I should do a “special”—so I did recently: your one and only chance to get 2 years of OBA for the price of 1. If you’re still on the fence for whatever reason, I get that. One Bar Ahead® isn’t for everyone, but those who are serious about investing tell me frequently that they love it.

Just understand this, I hate spam and slimy marketing as much as you do, which is why I will not waste your time with endless upsells and promotions. I will send you one final reminder this Friday, and the sale ends Sunday at midnight EST. No exceptions. Upgrade to Paid

I’d love to earn your trust, goodwill, and business—simple as that.

Jeers for Kohls

Big box retailers are under tremendous pressure from consumers and activists alike. That’s why I’ve made no bones about suggesting you avoid ‘em.

Case in point, Kohls.

The company just missed holiday quarter estimates badly, coming in at a loss of -$2.49 per share versus expected earnings of +$0.98. (Read)

The temptation is to do some bottom fishing... but visit a store. Take a look with your own eyes. Contrary to what Wall Street wants you to believe, there is no such thing as a “value” name in that space.

Should you buy?

AYFKM??!!

No.

If anything, putskies.

GM: Worst case of buzzword bingo I’ve seen in years

General Motors is the latest company to enter slash-and-burn mode. FOX Business reports that the company wants to save $2B, so it’s cutting hundreds of executive-level and salaried jobs. (Read)

GM statement says the job action Tuesday “follows our most recent performance calibration and supports managing the attrition curve as part of our overall structural costs reduction effort.”

This is undeniably the worst buzzword bingo I’ve seen in years.

Here’s an idea.

Try making better cars and trucks.

Shame on you, GM, for letting great brands like Chevy, Buick, and Cadillac languish and letting down scores of hard-working people who put their heart and soul into every one of ‘em!

Inflation’s so bad that even Dollar Tree is feelin’ it

Analysts forecast Dollar Tree’s (DLTR) revenue for 2023 between $29.9 billion and $30.5 billion, which is higher than the previous estimates of $29.86 billion. Meanwhile, estimates for profit are between $6.30 and $6.80 per share, down from the previous $7.78 per share. (Read)

What you really want to pay attention to is something different.

Profit-per-share forecasts are -15.8%, even though topline numbers are projected to increase.

Put another way, inflation is so bad that consumers are turning away from higher-margin items like toys and toward lower-margin items like snacks—even within dollar-based bargain basement stores.

There’s a very straight line between “must have” products and profit margins.

Invest accordingly.

China’s expanding at the fastest pace in years

Our government is busy glad-handing anybody who’ll listen. Inflation rages, and the threat of a recession looms. DC’s boffins say it’s a worldwide problem.

China didn’t get the memo.

That nation’s PMI is growing at the fastest pace in over a decade. Exports rose for the first time in 2 years, and home sales are on the uptick. Economic activity has expanded for the second month in a row. (Read)

Obviously, you wanna take what’s happening with a grain of salt because, not for nothing, we are talking about China where the numbers are cooked even more than our own. But still.

Pay particularly attention to companies selling into China like... oh, I dunno... my favourite fruity computer maker, just to name one.

Wall Street won’t waste an opportunity to pick up the slack, and savvy investors shouldn’t either!