Market Analysis: How to Build a Macro Framework (w/ Raoul Pal and Ash Bennington)

TL;DR

Netflix misses earnings, labor market shows distress, COVID cases rise, mortgage rates hit record low.

Transcript

it's friday july 17 2020 just after market closed in new york this is the real vision daily briefing i'm ash bennington from new york joined shortly by our ceo and founder rao powell from little cayman but first jack farley with today's news thanks ash netflix released its earnings last night a big swing and a miss for its earnings per share a doll... Read More

Key Insights

• 😘 Netflix's lower-than-expected earnings led to a stock plunge despite beating revenue estimates.
• 🤘 The labor market is showing signs of distress with job openings and unemployment searches deteriorating.
• 😮 COVID cases continue to rise globally, impacting economic recovery efforts.
• 😘 Record low mortgage rates are attributed to the Fed's market support and demographic shifts.
• 🫰 The banking sector, particularly the BKX index, shows signs of persistence in the economic downturn.
• 🗂️ Divides and contention in politics during the pandemic are exacerbating economic uncertainties.
• 🌐 Monitor international bank indices like EuroStoxx, FTSE, and Japanese banks for global economic health.

Questions & Answers

Q: How did Netflix's earnings report impact its stock price?

Netflix's earnings per share coming in below expectations led to a 7% drop in its stock price, causing concern among investors.

Q: What signs of distress are emerging in the labor market?

Job openings are decreasing, and searches for unemployment are not declining, indicating a worsening labor market scenario.

Q: How are COVID cases affecting global economies?

Rising COVID cases, especially in countries like India and the US, are hampering economic recovery efforts and causing increased uncertainty.

Q: Why are mortgage rates hitting record lows?

The Federal Reserve's support in the RMBS market has driven mortgage rates down, but underlying demographic shifts may contribute to a long-term slide in demand.

Summary & Key Takeaways

• Netflix reports lower-than-expected earnings per share, causing a stock drop of 7%.

• Labor market signals distress with job openings and unemployment searches showing no improvement.

• COVID cases continue to rise globally, with India surpassing 1 million cases and the US setting new daily case records.