📊 Biggest Mistake Of All Time?

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Some key data bites from this week that you should know:

• Mark Zuckerberg $META is now the world’s 2nd richest person with a $211B net-worth.

• The U.S. added 254,000 jobs in September, significantly higher than the 140,000 expected.

• Harvard’s 20-year annualized endowment return is among the lowest in the Ivy League at 8.8%.

• The U.S. stock market now makes up roughly 50% of the global stock market capitalization.

• PepsiCo $PEP is buying a tortilla company for $1.2B.

• Netflix $NFLX cancellations nearly 3x’d after its co-founder endorsed Kamala Harris.

• Costco $COST is now selling platinum bars for $1,089.

• Apollo $APO wants to double its AUM from $700M to $1.5T by 2029.

• Fidelity estimates Elon Musk’s X is worth 80% less than what he paid.

• Eli Lilly $LLY plans to build a new $4.5B R&D lab in Indiana.

• Microsoft $MSFT has $108B in pending data center leases.

• AT&T $T will sell its 70% stake in DIRECTV to TPG for $7.6B.

• Boeing $BA was awarded $9.4B in defense contracts.

In today’s newsletter:

• 🇨🇳 The Return Of Chinese Stocks

• 😫 Biggest Mistake Of All Time?

• ✔️ Nike’s Sales Growth Keeps Tanking

• 🪫 Tesla Barely Misses Q3 Deliveries

• 🎨 Jensen Huang Overtakes Intel

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Want to see the power of monetary stimulus in action? 

Look no further than China.

Chinese stocks recently had their best week since 2008, fueled by aggressive government stimulus measures.

So, what did the stimulus include? According to Reuters, China:

1. Issued $284B in special sovereign bonds

2. Reduced the cash reserve ratio for banks by 50 bps

3. Injected $142.5B in liquidity into the banking system

4. Lowered the 7-day reverse repo rate by 20 bps to 1.50%

5. Ordered banks to lower mortgage rates for existing home loans before October 31

The result?

• The CSI 300 Index, often considered China's equivalent to the S&P 500, entered a bull market.

• It surged to 52-week highs, just after recently hitting 52-week lows.

Hedge fund billionaire David Tepper called the Chinese government’s actions a “bazooka” and announced he’s loading up.

Another China bull? Michael Burry.

• The famous investor had 21% of his portfolio in Chinese e-commerce giant Alibaba at the end of Q2.

If there was one company that didn’t see the scale of the stimulus unleashed by the Chinese government coming, it was probably Walmart.

On August 21st, Walmart sold its entire stake of 144.5M shares in JD.com for $3.6B.

Since then, shares of the Chinese e-commerce company have surged by roughly 74%.

• Had Walmart held onto its shares, they would now be worth about $6.8B.

• In other words, Walmart missed out on nearly $3.2B in unrealized gains.

This seems to have come right out of Jim Cramer’s playbook.

Jokes aside though, hindsight is 20/20. 

• JD’s stock was down about 10% over the last five years prior to the sale, making the sale seem reasonable at the time.

• That being said, it's certainly painful to look at in retrospect.

Can Nike find its footing?

This week, the American athletic company released its earnings for Q1 FY 2025 with mixed results.

Here were some of the key figures:

• 🟢 Adj. EPS: $0.70 vs. $0.52 Est.

• 🔴 Revenue: $11.59B vs. $11.65B Est.

Compared to last year, EPS fell roughly 26% and revenue declined 10%.

The immediate future also looks like an uphill battle. 

• For the current quarter, the company is projecting sales to drop 9% at the midpoint, below the 6.9% analyst estimates.

• The company continues to face fierce competition from ON and Hoka, who have been gaining market share.

A few weeks back, the company announced company veteran Elliott Hill would be taking over the helm of CEO.

• As a result, during the earnings announcement, Nike announced it would be removing its full-year guidance and postponing its investor day given the change.

• Fixing this great American brand will be no easy feat and Elliott Hill has a big task on hand.

Shares of Nike are down 12% over the past 5 years, severely underperforming the S&P 500 which is up 95%.

In a recent newsletter, I highlighted the challenges facing the automobile industry, from high interest rates to labor disputes and recalls.

On Wednesday, Tesla reported its Q3 vehicle deliveries, giving us a sneak peak to see how the biggest automaker in the world is doing.

• The EV company delivered 462,890 vehicles, just short of the 463,310 analysts' estimates compiled by FactSet StreetAccount.

• Although Tesla narrowly missed estimates, it still achieved delivery growth, with a 6.4% increase YoY.

One thing to call out is that Tesla has several catalysts on the horizon.

• On October 10, the company will host its Robotaxi event, with McDonald’s teasing a potential partnership in a tweet referencing the 10.10 date.

• Additionally, Tesla will report its earnings on October 23rd, which could bring more news and momentum for the stock.

You probably wouldn’t believe it unless you checked, but Nvidia’s CEO, Jensen Huang, is now worth more than Intel.

Not Nvidia, the company—just Jensen himself.

That’s right. Huang’s net worth recently surpassed Intel’s entire market capitalization. 

• His fortune now sits at $109B, while Intel’s market cap has dropped to $97B.

It’s a tale of two very different stories.

• Nvidia has skyrocketed 2,645% over the past five years, while Intel has declined 56%.

• This incredible rise has catapulted Huang’s net worth from $3.8B in 2019 to $109B today.

• Meanwhile, Intel had a market cap of $226B back in 2019.

📚 Recommended Reading

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Notable Companies Reporting Earnings This Week:

Earnings season is finally here. Some of the biggest names reporting this week?

• PepsiCo, Domino’s Pizza, and JPMorgan Chase & Co alongside a few other key financial companies.

I use EarningsHub to track earnings, estimates, and receive AI summaries of investor calls.

• If you’d like an all-in-one earnings tool and see all other companies reporting, I definitely recommend you check it out!

Buys

• Jonathon Jackson (D)

  • Company: Simon Property Group ($SPG)

    • Amount Purchased: $15K - $50K

• Josh Gottheimer (D)

  • Company: IBM ($IBM)

    • Amount Purchased: $3K - $45K

  • Company: HDFC Bank ($HDB)

    • Amount Purchased: $3K - $45K

  • Company: Sysmex ($SSMXY)

    • Amount Purchased: $2K - $30K

Sells

• Michael Burgess (R)

  • Company: Illumina ($ILMN)

    • Amount Sold: $15K - $50K

• Josh Gottheimer (D)

  • Company: Broadcom ($AVGO)

    • Amount Sold: $3K - $45K

  • Company: SAP SE ($SAP)

    • Amount Sold: $2K - $30K

Buys

• Southwest Airlines ($LUV)

  • Insider: Rakesh Gangwal (Director)

    • # of Shares Purchased: 3,600,000

    • $ Amount: $106,698,763

    • SEC Forms: [1], [2], [3], [4], [5], [6], [7]

• New Fortress Energy ($NFE)

  • Insider: Wesley Edens (CEO)

    • # of Shares Purchased: 5,793,742

    • $ Amount: $49,999,993

    • SEC Forms: [1]

Sells

• Palantir ($PLTR)

  • Insider: Peter Thiel (Director)

    • # of Shares Sold: 8,423,118

    • $ Amount: $309,979,287

    • SEC Forms: [1]

• Apple ($AAPL)

  • Insider: Timothy Cook (CEO)

    • # of Shares Sold: 223,986

    • $ Amount: $50,276,355

    • SEC Forms: [1]

🤝 Review of the Week