🍨 Daily Scoop: Wine and Cheese Tasting Sticker Shock!
By Fri, Oct 4, 2019
Happy Friday, Scoopers!
The curse of October finally broke, and the stock market finished Thursday higher than where it started. The upbeat mood is courtesy of investors’ hope for another interest rate cut at the end of October. Aside from that, if you live in North Carolina, you may buy your CBD oil when you pick up milk from your local grocery stores. Aside from that, watch for the price of French wine and cheese tasting at your local hipster bar. You may get a sticker shock thanks to a tariff approval by WTO.
For those stories and more, scroll down to the “Overall Market,” “What’s up?” and “What’s down?” sections.
MARKETS
- U.S. markets:U.S. markets: The stock market finally recovered, and all three indices finished Thursday in the green zone. Scroll to the “Overall Market” section to learn more.
- Cryptocurrency: Bitcoin’s price is still in the $8,000 per coin range.
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OVERALL MARKET
Another interest rate cut, please!
What’s happening?
After a few days of decline in value, investors decided its time to find a good reason to change the mood. The reason came through the latest interest rate cut probability estimation by CME. This week, we talked about two declining economic indicators, here and here. and those are the reasons the CME increased its estimated probability of an interest rate cut at the end of October to 90.3%, up from 49.2% only a week ago.
What does this mean?
We have talked about CME Group in the previous editions of The Daily Scoop. It is a leading exchange for derivative markets. The rate cute probability estimation is based on the price of futures contract traded on the CME’s exchanges. Similar to all predictions, this one can also be wrong. Don’t conclude that there will be a rate cut. For example, what if the U.S. and China suddenly agree on a trade deal (it’s possible). In that case, all the reasons for a rate cut will be nullified.
WHAT’S UP
CBD oil for sale at your local grocery store.
So, what happened?
Shares of CV Sciences (Ticker: CVSI) were up more than 18% after the company announced a new distribution partnership with Harris Teeter, a grocery store in North Carolina. Cannabis stocks are not having a good year. However, hemp-based cannabidiol (CBD) products are having a moment and are the shiny stars of the overall cannabis market.
WHAT’S DOWN
Hold my seltzer!
So, what happened?
Shares of wine and beer distributor Constellation Brands (Ticker: STZ) dropped more than 5% after the company’s latest quarterly earnings report disappointed investors with declining sales and net income in the wine and spirits segment. The company tried to excite investors with the launch of its Corona brand hard seltzer, but investors were not impressed.
We imagined somewhere in a boardroom, some investors are having an interesting conversation:
“Jonny, hold my seltzer! These people at Constellation Brands are trying to distract us from all the money they are losing on the wine segment. Not to forget the billions of dollars they’ve poured into Canopy Growth (Ticker: CGC) hallucination.”
We don’t know for sure! But, someone is saying that, somewhere.
WATER COOLER
Wine and cheese tasting sticker shock!
So, what happened?
The U.S. and China trade dispute is not the only trade war game in town. The U.S. and the E.U. are also fighting over tariffs and subsidies, specifically aircraft subsidies to Airbus.
This week, the U.S. announced a 25% retaliatory tariff on more than $7 billion worth of imports from the E.U. This new tariff is approved by the WTO court as a retaliation of the subsidies Europeans gave to Airbus. The tariff is notably applied to French wines, cheeses, even single-malt whiskey. So, the next time you are planning a date night to sample some French wine and cheeses at the new hipster place in the trendy up and coming part of town, get ready for a sticker shock.
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
