Risk On, Mask Off

Tale of the Tape

Good evening folks and welcome back to the greatest casino since the baccarat scene in Dr. No.

It was risk on, mask off on Wall Street and you gotta love the animal spirits. 

The S&P 500 closed up another 1.67%, marking its highest close in 2 months. The Nasdaq 100 rose 2% and is now 8% higher on the year and 2.5% from the all-time closing high. The Russell 2K was up 3% for God’s sake, Unfreakinreal…

Underperformers played the catch up scenario. Energy led while healthcare lagged. Small-caps bested large-caps. Banks outperformed. You know the drill.

Amazon ticked $2500 and Facebook closed at a new all time high. Spotify jumped another 8.4% on yesterday’s Rogan news.

Nvidia closed at a new all-time high. The company is scheduled to report earnings tomorrow after the close. Keep an eye out.

Social Media stocks were hot as Dante’s 7th Circle with Facebook up 6%, Twitter up 8%, and Snapchat up 4%. 

S&P 5002,971+1.67%
Russell 20001,346+3.00%
Dow Jones24,575+1.52%

Amazon Fires When Ready

Amazon’s first major video game, Crucible, will be available tomorrow for free on PC. It’s a shooter game, which is apropos, because the company takes aim at a market and then fires bombs in your face.

Amazon is fearless, sees a giant market and so everybody should be paranoid. Remember, your margin is his opportunity.

Mike Frazzini, VP of Amazon Games had this to say: 

There’s tremendous room for invention in games. We’re just getting started.

Check out Bloomberg for more and tomorrow you can download Crucible here.

Will Amazon disrupt video games? We’ll see.

Earnings Wrap-Up

Target beat earnings estimates but the stock dropped 2.87%. The company saw a massive uptick in digital sales which is not surprising given COVID. 

Here’s the Q1 financial highlights:

Here’s the press release.

Lowe’s posted better than expected earnings as well. $LOW gapped up 5% but faded all day and closed flat. 

Home Improvement stores Lowe’s and Home Depot are both within 8% of all time highs. There’s no shortage of projects when you’re stuck at home. No wonder these folks are outperforming the S&P.

Here’s Investors Business Daily with more.

Pizza Arbitrage & VC Karma

Epic blog post on The Margins Substack the other day about the owner of AJs Pizzeria outta Kansas and his friend Ranjan Roy (the author of the Margins Substack). They noticed that DoorDash was buying its pizzas, delivering them, and charging less than the cost of the pizza.

Why would they do that, you ask?

Well, DoorDash has a ton of VC cash and it’s happy to lose money in order to grow. They’re selling dollar bills for 67 cents.

So, Ranjan and the owner set up an experiment where they ordered a bunch of their own pizzas through Doordash and turned a profit on each one because they paid less than AJs was charging.

Genius Pizza Arbitrage.

Here’s a money quote:

If you have not read the full post yet, definitely get over there and do so. You’ll chuckle for sure but then you’ll go hmm 🤔

Day Trading Junkies

This chart from Bianco Research shows an explosion of trading volume across the major brokerage firms in Q1. Volume has nearly tripled since the prior quarter. Absolute madness.

Will this explosion in volume endure or is it just a quarantine side effect? Place your bets…

Willis Tower Has No Power

The Willis Tower in Chicago lost power Tuesday night due to a flood in the building’s basement. The Tower looked freaky as heck. Check out this ominous photo. 

Earnings Tomorrow

Be sure to know when your stocks report earnings. Here’s the full earnings calendar.

Links That Don’t Suck

America Just Made a Huge Investment in Next-Gen Nuclear Power

Brooklyn, Before It Was A Global Brand

Growth Stocks Outperforming Value by Widest Margin in Decades

Is This Eco-Friendly “Smart Office” the Way of the Future?

College Football Prepares for a Tough Matchup: Tradition vs. Coronavirus

For Creators of Giant Oil ETF, Troubles in Market Began a Decade Ago

Ex-Green Beret, His Son Arrested, Accused of Aiding Ex-Nissan Boss’ Escape

How To Get Started With Aircraft Ownership