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Thanksgiving Geopolitical Thoughts
Importance of diversification during war
Market update
Ozempic and Wegovvy are changing the world
Recommendations and Links
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Market Update📈📉
Welcome back after the Canadian thanksgiving long weekend.
We want to begin todays newsletter by sending our sincerest thoughts and prayers to all of our friends in the Jewish community and the innocent civilians impacted by the brutal terrorist attacks in Israel this weekend. Hate has no place in our community, country, or world.
Headlines of the week:
On Wednesday, news that LVMH’s revenue growth has slowed dramatically likely marks the end of the global luxury bubble. Global growth investors may cycle into US Big Tech as a result.
Middle East tensions have pushed gold/silver prices higher but virtual currencies are falling. News that terror groups receive funding via the latter puts this space under renewed scrutiny.
Appetite-suppressing drugs have received a lot of attention lately for potentially hurting food-related companies’ top lines as people who take them consume less. That may be true in the near-term, but companies’ may be better off over the long-term from the health benefits some of their customers may enjoy along with weight loss. The longer people live, the longer they’ll be “consumers”, after all.
Ozempic thoughts and links from the podcast discussion:
As much as there’s negative sentiment surrounding the impact of weight loss drugs on a variety of industries from an investment perspective, there are also plenty of positives other than obviously benefiting the pharmaceutical and health care companies that offer them. For one, retailers can capitalize on this weight loss trend as people need new wardrobes for their new, slimmer selves. Additionally, there’s a substitution effect here. The less money people spend on food and drinks, the more discretionary dollars they’ll have to allocate towards other goods and services. Ultimately, new innovations always come along to disrupt industries and it’s up to investors to discern which companies can best adapt.
Sources:
https://www.wsj.com/business/ozempic-impact-snack-food-companies-9eec87e5?mod=hp_lead_pos10
Twitter links from the pod:
Bob Elliott shows us why diversifying in the face of war produces superior returns
Michael Kao talks about the impacts of the war on Oil prices
Podcast & YouTube Recommendations🎙
5000 years of history and Golds important role in a portfolio:
The conflict between Israel and Palestine can often seem like a permanent feature of the global order. The wars, intifadas, refugees camps, suicide vests, UN resolutions, and peace talks have been painfully burned into our collective consciousness. But how could this have happened? Was it always this way? That’s what we’ll seek to find out in Fear & Loathing in the New Jerusalem, a multi-part series exploring the history of the Israeli-Palestinian conflict.
Derek Thompson Has a few Israeli Palestine experts on his Plain English Podcast to explain the why:
https://spotify.link/bsiXJER4PDb
Best Links of The Week🔮
"A sustained rise in long-term Treasury yields could be bringing the Federal Reserve’s historic rate hiking cycle to an anticlimactic end. Top central bank officials have signaled in recent days that they could be done raising short-term interest rates if long-term rates remain near their recent highs and inflation continues to cool... San Francisco Fed President Mary Daly last week said the increase in Treasury yields since Fed officials’ last meeting is roughly equivalent to a quarter-percentage point rate increase in the Fed’s short-term rate." Source: WSJ
"LVMH’s sales growth softened in the third quarter as shoppers reined in spending on high-end Cognac and costly handbags — more evidence the post-pandemic luxury boom is waning. Organic revenue at the French group’s crucial fashion and leather goods unit, which includes the Louis Vuitton and Christian Dior labels, rose 9%, the company said Tuesday. Analysts expected an 11.2% increase. Sales at the wines and spirits unit tumbled 14%, much worse than estimates." Source: Bloomberg
"German sandal maker Birkenstock priced its shares at $46 in an initial public offering ahead of its first day of trading on Wednesday, giving the company a market valuation of $8.6bn. The price is in the middle of a range of $44 to $49 set by the company last week, reflecting demand for its shares as the group perpetuates a revival in the US IPO market after a dearth of deals since the start of 2022." Source: FT
"ExxonMobil has agreed to buy Pioneer Natural Resources in a $59.5bn deal that is set to unleash a wave of consolidation in the US shale oil industry. The biggest western oil supermajor said on Wednesday it had sealed an all-stock deal that values Pioneer at $253 per share. The combination hands Exxon a dominant position in the Permian Basin, the vast field in western Texas and New Mexico that has helped turn the US into the world’s largest oil and gas producer." Source: FT
"Federal Reserve officials at their September meeting differed on whether any additional interest rate increases would be needed, though the balance indicated that one more hike would be likely, minutes released Wednesday showed. While there were conflicting opinions on the need for more policy tightening, there was unanimity on one point – that rates would need to stay elevated until policymakers are convinced inflation is heading back to 2%." Source: CNBC
"Israel’s new unity government pledged on Wednesday evening to change the “strategic reality” of a Gaza Strip controlled by Hamas as it tightened its siege of the enclave ahead of an expected ground offensive. Prime Minister Benjamin Netanyahu formed the emergency war cabinet and unity government earlier in the day with Benny Gantz, head of the centre-right opposition National Unity party, in response to Saturday’s deadly attack by Hamas." Source: FT
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