🍨 Daily Scoop: The Chicken War
By Mon, Nov 25, 2019
Hello Scoopers,
The stock market had a stable morning. However, right about noon, all three indices dropped has investors heard about the main reason why there is a delay in the signing of the trade deal.
Beyond the overall market, one American retailer managed to live up to investors’ expectations and met the high standard of its fake, fancy name of “Tar Jay.” Quite contrary to Tar Jay, a micropayment provider in Brazil disappointed investors all around who had no love to spare.
Oh, and by the way, how many stock market-related wars can you count? Whatever the number is, add one more, and let’s call it the “Chicken War.” More on that in the “Water Cooler” section.
MARKETS
- U.S. markets: All three indices finished Wednesday in the red zone. Scroll to the “Overall Market” section to learn more.
- Cryptocurrency: Bitcoin’s price is barely holding above $8,000. There were even analysts calling for the coin price as low as $4,800 if technical analysis is to be trusted.
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OVERALL MARKET
A fight over a venue for signing the deal…
What happened in the stock market?
An anonymous White House official broke the trade deal silence on Wednesday and disappointed the stock market. Apparently, there is disagreement over where to meet to sign the deal. Well, of course, we are simplifying it. However, just like that, a disagreement over where to meet up dragged the stock market down mid-day on Wednesday.
How come the market didn’t drop even further?
The oil prices came to the rescue of the market. As investors lost hope in seeing a signed trade deal, the price of crude oil rose a few percentages and saved the market. The price increase came due to a lower than expected increase in the crude oil inventory report. And, perhaps protests and unrest in two of oil-exporting nations in the Middle East, Iran and Iraq, boosted the price a little bit. Isn’t it interesting that unrest on one side of the world came to the rescue of the stock market on another of the globe?
WHAT’S UP
Tar Jay is crushing it
So, what happened?
Shares of Target (Ticker: TGT) were up more than 14% on Wednesday. The excitement is all about more than 30% growth in the online segment, and almost all of the growth is due to the company’s success is same-day delivery and curbside pick-up.
A few years ago, it was hard to believe that target can ever survive the Amazon era, but here we are in late 2019, and the company has proved to be one of the best performing retail stocks.
WHAT’S DOWN
So, what happened?
Shares of PagSeguro (Ticker: PAGS) were down more than 17% on Wednesday. The company is also known as Square of Brazil. However, unlike Square, PagSeguro’s payment volume has slowed down in the latest quarter, and investors had no love to spare. Brushing off investors’ disappointment, one may wonder whether the stock price decline was justified.
Let’s see what happened to the company in the latest quarter. Net Income was up 48.0% compared with 3Q18. Active merchants were up by 1.2 million, reaching a total of 5.0 million in the last twelve months. Not to forget that the company is profitable, with no long-term debt. To that, add the massive growth opportunity that comes with the transition from offline payments to digital transactions in an emerging market such as Brazil. What were investors scared of then?!
WATER COOLER
The Chicken War
What does that mean?
Here at the Daily Scoop editorial room, we have a wall with the name of all the ongoing wars in the stock market. On Wednesday, we officially added one more war to the wall. This one is all about the chicken?!
The Chicken War started when Popeye’s made fun of Chick-fil-A for being closed on Sundays and ran out of its chicken sandwich in only two weeks. The war was also spiced up (ahem, pun intended) when a few of McDonald’s (Ticker: MCD) franchise owners sent a public letter to the company’s then-CEO asking for the addition of a chicken sandwich to the menu. Now, Taco Bell decided to join the action. The company announced the testing of crispy tortilla chicken tenders, in Houston, Texas, and Dayton, Ohio. And, with this announcement, the Chicken War is officially on the grill (or, deep fryer).
About the Author
The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card
