Well, we talked yesterday about how China called our bluff on Tik Tok, well, today the country straight-up showed a pair of pocket aces. The World Trade Organization ruled that the tariffs President Trump imposed on Chinese imports are illegal, based on trade agreements signed in 1994 by President Clinton. I am not sure our current President will care much as we can effectively appeal the decision and we are not electing new appellate members to the board.
The ruling mostly demonstrates how foreign nations have failed to rally around the US at the WTO and in the global power struggle—both Australia and the European Union voted in China’s favor. And these are fights we usually win. America’s argument against China was: the $200 billion in tariffs was an exception to enforcing “public moral” policy, which is usually reserved for gambling and pornography, but the WTO wasn’t buying that. The U.S. did not challenge China’s retaliatory tariffs—which it could have—because of the ongoing Phase 1 trade—which isn’t being adhered to. Moreover, that trade deal was basically an agreement for China to purchase some $200 billion in US goods because we could not get China to agree to fair trade rules for competition—And that deal is heinous because it allows China to impose state-centric trade rather than affirming a rule-based free-market…
This idea about “deglobalization” came up in a Blackstone report citing a “lost decade” for the US equities market. Blackstone cited 1990s Japan in the report, which made me almost spit out my coffee, and claimed low interest rates will negatively impact corporate stock prices leading to “anemic equity returns”…
Well, the stock market could care less right now because 13 IPOs are hitting the Street this week:
- Snowflake – the largest software IPO of all time
- Unity Software – 3D Game rival to Fortnite
- Pactiv Evergreen – foodservice packaging
- Amwell – telehealth platform
- Broadstone Net Lease – single occupancy REIT
- JFrog – Israeli app development and CSRM
- Sumo Logic – continuous cloud intelligence pioneer
- Vitru – Brazilian online education company
- Outset Medical – reducing the cost of dialysis
- Dyne Therapeutics – biotech with therapies for muscle diseases
- Metacrine – trial stage biopharma for NASH treatments
- Compass Pathways – first psychedelic biotech (magic mushrooms)
- Stepstone Group – private market investing firm
Now, the horse to watch in this IPO Derby is certainly Snowflake, but don’t sleep on Sumo Logic. The latter has a similar repertoire to Newsheater BFF, Splunk ($185 per share). Splunk and Sumo Logic essentially have the same catalog of products and both allow companies to get very cozy with their data and analyze the heck out of it. The difference is that Splunk has transitioned into SaaS and Sump Logic was born in the SaaS (*cue Bane voice)—and this market is big enough for the both of them. Of course, we are not sure we expect +$100 prices for Sumo Logic as Splunk has killer cybersecurity products that accounts for half its revenue…
Now, if you had a bad day yesterday, you did not have one like Carnival Cruises…This party boy cruise line is barfing $770M a month and only has $8 billion left in cash…And to make matters worse, Carnival announced a $1B sale of new stock and then the stock dropped 8%…which would nullify any proceeds from the raise…Bruh? Pardon our slang.
One last thing, Apple’s new service divisions and their announcements—Apple Fitness+, a health/fitness content product and Apple One, a bundling of Music, TV+ and Arcade—caused rivals to hit the anti-trust roof. Spotify basically lost its mind on the news.
VXRT is living the pennystock dream come true…This biotech was worth a little more than a quarter a year ago, but a Phase 1 COVID-19 trial has this stock in legitimate breakthrough territory with a novel tablet vaccine that is coming up the rear on the other more flashy trials…It could end up being effective and easier to take (i.e. no needles).