Scary Season Is Over

Let’s enjoy the harvest that awaits in the post-sugar-shock of Halloween. Record highs today across the market.

After two months of dread, Big Tech cleared the air. AAPL and AMZN didn’t do great. MSFT and GOOG did. FB went sideways but is now a sideline . . . TSLA is bigger and had a fantastic week.

We aren’t a big fan of mega-tech but we respect their size and market shadow. All in all, the winners gained more ground than the losers lost. That’s healthy rotation. It’s how the market creates wealth.

The real story is in the details. MSFT is a powerhouse, still growing the business 10% a year. GOOG and AAPL are dragging, growing the bottom line maybe 2-4% in the coming year. That’s not the go-go story people come to these stocks to experience. That’s a crawl.

And while AMZN is still growing about as fast as MSFT, it’s back to its habit of spending a fortune on new ventures, cutting into the bottom line. At this growth rate, this stock will look expensive for at least another decade . . . even if it goes nowhere at all, which is no fun.

So that’s most of the FANG and Friends. Then there’s Facebook or “Meta.” Dumb name. I get that they want to show they’re more than the title website . . . in case Facebook problems fester . . . but it’s not really going to stick. Instagram and Whatsapp are still very small pieces of the overall footprint. And the virtual reality thing is not ready for prime time.

TSLA is bigger than FB now. Remember when there was an N in FANG for Netflix? NFLX never really grew beyond $300 billion, tiny compared to these trillion-dollar names. FB isn’t even a $1 trillion company yet, the small one in the bunch, getting left behind.


Is still a drag. That simple. Channel checks show construction is as hot as it gets through next summer . . . building pipelines are already full and labor is hard to wrangle.


Are a problem. Anecdotally $25 an hour is the offer in many parts of the country. You can’t run a traditional minimum wage operation on that. WMT pays $12 an hour and that’s under pressure. They’re struggling to keep people from walking out. TGT pays $15. COST pays $17 and so on.

If you don’t pay more than that, people will walk. Disruption is here.

The Fed

Is coming Wednesday. Hope is perversely that the economy stalls so interest rates won’t rise. That’s not the right place for hope.