Eyes On Lulu, $RCAT, VIX Feeds Families Monday

Markets Overview 07/12/2024

S&P 500 -0.04%

DOW -60%

Nasdaq +0.39%

Notable Sector Performance

Industrials +1.26%

Energy +1.14%

Financials +0.81%

VIX: The Vix finished the week at $20, down 63% from its Monday highs of $55

Observations:

-I got into $RCAT about a month ago as I read a report on what winning the government contract entails and this week Red Cat Holdings jumped 45% on hopes that they will compete for government drone contracts and a good forward looking earnings call

-Sweetgreen stock soars 33% Friday after reporting revenue exceeding estimates and having cut losses, this is a part of a bigger move into fast casual as I feel like traditional fast food just doesn’t appeal as much as it used to with the consumer, $CAVA $CMG NOT $NDLS

-Eli Lilly says that they don’t even have to advertise their weight loss products and all the customers are just inbound, their stock went up 17% this week after earnings

-Novo Nordisk reported slimmed-down profits and lowered their guidance as everybody wants a piece of the GLP-1 pie, long $hims

-Rivian reports a wider loss than street estimates but stated that they are on track to positive gross profit in the fourth quarter, they lost $32,700 on vehicles in the second quarter, I think I’ll do a write-up on them sometime before the end of the year and really dive deep into their financials

-Lucid Motors stock rallies on another Saudi investment and a sales beat in their earnings report, the Saudis invested $1.5 billion from their wealth fund into the EV maker

-Under Armour jumped 22% on the week with a top and bottom line beat, it’s still down 10% YoY ( footwear revenues decreased 14% YoY) since people aren’t buying Curry’s as much I assume

$LULU

I have my eye on apparel maker Lululemon, they’re down 53% on the year and I think are adjusting as a company to increasing competition from brands like Alo, Vuori, and Fabletics.

The quality of their clothes is still top notch but since Alo and Vuori are private companies we can’t get as much of a peek into what they are making.

I think this is also a look into the current consumer as they don’t want to buy $100 pairs of pants in this current state of the economy when they could go to Fabletics and get multiple pairs for the same amount. Lulu targets that middle-class range (more skewed towards people who are higher’ish’ middle class) and specifically that consumer has tapped out as we have seen other high-class consumer brands stock struggle on the year like $CAPRI and $LVMH, which are both down big on the year, Ralph Lauren reported a good quarter with their CEO stating, “As far as our core consumer is concerned we actually find them to be very resilient” But in North America, the company’s wholesale sales fell 13% and e-commerce sales fell another 4%. I think this tells more of the bigger picture as consumers are still facing inflationary pressures and these luxury brands have to realize that they can’t have their cake and eat it too, they have to either discount their items or take the hit on a sales punch.

Not saying this is long right now but I will be doing a deep dive once they report their earnings in early September

Good post here on VIC,

Overall,

The week started off super rough, we had people calling for emergency rate cuts and emergency fed meetings, but markets always go back up and after the jobs print, we started to hit a little stride. I feel that big tech is still kind of jittery after earnings and will continue to be until Nvidia reports at the end of this month. The election has also had its toll on markets as we saw the “Trump Trade” fade away and are now seeing frenzy in who we want in the oval office, I see the markets rallying to end the year after the election anyway. Next week's earnings that I will be analyzing are Lifeway Foods and On Holding, two of the biggest holdings in my portfolio.