Investing

[1984Echoes]

I think that would be fantastic.

I vote for the 50 bps in September and then wait until December... to give a bit of time to see the effect of the 50 bps... and then do 25 bps in December and maybe one more 25 bps in early 2025.

[mtutiger]

Any update on the Kamala Krash?

[Screwball]

It was NVDA day. One of the MAGS. Only down around 7% AH. Hyped to the max by bubblevision and the usual hucksters. Got a kick out of the image below if I can post it. As it turned out - a dud - in the big picture. Chart porn of action around the release;

https://pbs.twimg.com/media/GWGDV4AWkAAW4kN?format=jpg&name=900x900

[Screwball]

Under the radar today;

Dollar General shares crater 25% as retailer cuts outlook, blaming ‘financially constrained’ customers

Down a little over 28% as of 11:48

[CMRivdogs]

1 hour ago, Screwball said:

Under the radar today;

Dollar General shares crater 25% as retailer cuts outlook, blaming ‘financially constrained’ customers

Down a little over 28% as of 11:48

Maybe if they'd stop building stores within a half mile of the competition. They're using the old philosophy of making the "customer" pass their store on the way to Dollar Tree. It's the old Advance Auto parts strategy. 

[Hongbit]

45 minutes ago, CMRivdogs said:

Maybe if they'd stop building stores within a half mile of the competition. They're using the old philosophy of making the "customer" pass their store on the way to Dollar Tree. It's the old Advance Auto parts strategy. 

When your name is Dollar General, it’s hard to raise prices to maintain profitable margins while blaming inflation like every other big consumer company has done. 

[CMRivdogs]

25 minutes ago, Hongbit said:

When your name is Dollar General, it’s hard to raise prices to maintain profitable margins while blaming inflation like every other big consumer company has done. 

https://money.howstuffworks.com/personal-finance/budgeting/dollar-store.htm

Quote

According to analysis by The Guardian, paying $1 for a 16-oz (473-milliliter) bottle of milk at a dollar store is the equivalent of paying $8 for a full gallon (3.8 liters), which is more expensive than the fancy organic stuff at Whole Foods. Similarly, the $1 bag of raisins at the dollar store weighs only 4.5 ounces (128 grams), while a 72-ounce (2-kilogram) bag from a big-box store costs $10.50, or 52 percent less per ounce.

By shrinking package sizes, dollar stores can get away with charging way more per volume, which is one of the main strategies that dollar stores use to wring the most profit out of every sale. Just because you only paid $1 for that roll of aluminum foil doesn't mean that it's a good deal.  The Washington Post reported in 2018 that the Dollar Tree $1 roll of foil was only 15 square feet (1.4 square meters) long, while Walmart sold a 75 square foot (7 square meter) roll for $4.06, the equivalent of more than 18 square feet (2 square meters) per dollar. Of course, if finances are tight, maybe you'd rather pay $1 for 15 feet of foil rather than $4.06 for 75 feet.

Dollar-store shopping is a no-frills experience and that's not an accident. By keeping stores small and employees at a minimum, dollar stores are able to convert a larger portion of sales into profit.

According to 2012 figures, Dollar Tree captured 35 cents of profit for each dollar of revenue compared to 24.1 cents per dollar at Walmart. For third quarter 2021, figures remained comparable. Dollar Tree had a gross profit margin of 27.5 percent of net sales, while Walmart's was 25 percent.

 

Edited August 29 by CMRivdogs

[Screwball]

1 hour ago, CMRivdogs said:

Maybe if they'd stop building stores within a half mile of the competition. They're using the old philosophy of making the "customer" pass their store on the way to Dollar Tree. It's the old Advance Auto parts strategy. 

If you read their earnings report their net sales were up YOY along with foot traffic in the stores. From their filing;

Quote

Net sales increased 4.2% to $10.21 billion driven primarily by new stores and a 0.5% increase in same-store sales. Average sales per square foot for all stores over the 52-week period ended August 2, 2024 were $263.

Quote

Our core customers are often among the first to be affected by negative or uncertain economic conditions and among the last to feel the effects of improving economic conditions, particularly when trends are inconsistent and of an uncertain duration. Our customers continue to feel constrained in the current macroeconomic environment and continue to experience elevated expenses that generally comprise a large portion of their household budgets, such as rent, healthcare, energy and fuel prices, as well as cost inflation in frequently purchased household products (including food). Furthermore, certain of our customers have reported that they are relying on credit cards to purchase basic household items. Accordingly, we expect our customers’ spending to continue to be pressured overall and particularly in our non-consumables categories. As a result of this pressure, we anticipate a heavier promotional environment in the second half of 2024, which could have an impact on our sales and margin results.

Quote

We continue to experience significant levels of inventory shrink. Although we continue to take actions designed to reduce shrink, including refinement of our self-checkout strategy, and believe these actions are starting to positively impact the trend, we anticipate shrink will nonetheless materially pressure our fiscal 2024 full-year financial results.

 

[chasfh]

1 hour ago, CMRivdogs said:

https://money.howstuffworks.com/personal-finance/budgeting/dollar-store.htm

 

Yes, it's true you can save more per volume at a grocery store, but on the down side, you end up with two kilograms of raisins.

[Screwball]

Another live one, this time Dollar Tree. Reported earnings last night. The carnage begins. Down %25 as of 2:54.

[gehringer_2]

23 minutes ago, Screwball said:

Another live one, this time Dollar Tree. Reported earnings last night. The carnage begins. Down %25 as of 2:54.

Investors getting wary of anyone selling chips...

[gehringer_2]

Reuters reporting that the White House will block the Nippon Steel purchase of USSteel.

https://www.reuters.com/markets/deals/biden-preparing-block-nippons-us-steel-takeover-washington-post-reports-2024-09-04/

Edited September 4 by gehringer_2

[Hongbit]

Core inflation came in a bit higher than expected this morning which looks to take the possibility of a 50bp cut off the table.   Should be a 25bps cut next week.  

[Hongbit]

Also announced 2 more 1/4 point cut most likely coming before the end of the year.  

[Deleterious]

Interest rates were fine. What a joke.

[Screwball]

17 hours ago, Deleterious said:

Interest rates were fine. What a joke.

The other times they cut by 50 bps or more were in 2007-8 due to the financial crisis and in 2020 due to COVID. So yes, this is a joke, or something else, but then again, we already know who the Fed serves.

Now all we need is for these war mongering idiots to provoke a wider conflict and watch crude oil go nuts and negate what may have been gained by rate cuts.

[Screwball]

The bellwether known as Fed Ex getting spanked to the tune of -15% due to poor earnings.

[Tigeraholic1]

Amazon has changed the postal delivery game. Once they went internalized air freight and ground delivery the needs for UPS/FEDEX have dropped off a cliff.

[chasfh]

21 hours ago, Tigeraholic1 said:

Amazon has changed the postal delivery game. Once they went internalized air freight and ground delivery the needs for UPS/FEDEX have dropped off a cliff.

I’m starting to wonder whether they will ever be broken up, or whether we have given up on Sherman antitrust in their case because they’re so powerful.

[gehringer_2]

2 hours ago, chasfh said:

I’m starting to wonder whether they will ever be broken up, or whether we have given up on Sherman antitrust in their case because they’re so powerful.

amazon's status reminds me of the Bell System before the breakup. The complaints about them are coming more from people who want a piece of their business than from the customers they are serving and when they are gone (if it happens) people will complain that life was simpler before they were broken up. 

That's not to say their size may not be unhealthy for the economy for a lot of other reasons, but IMO  it's not because the value proposition that Amazon provides it's customers is a bad one.

[chasfh]

22 hours ago, gehringer_2 said:

That's not to say their size may not be unhealthy for the economy for a lot of other reasons, but IMO  it's not because the value proposition that Amazon provides it's customers is a bad one.

At least at this very moment. The insidiousness of monopolies is that they appear to be customer-friendly as they are dropping prices during their bid to run smaller competitors that can’t keep up out of business, at which point the monopolists will achieve the status they need to rent seek at consumers’ expense.

This will be especially insidious in the case of Amazon once they get there because unlike with Baseball, a monopoly that consumers can take or leave, Amazon threatens to eventually be so integrated into the macroeconomy that no one will reasonably be able to “leave” it.

[gehringer_2]

2 hours ago, chasfh said:

At least at this very moment

exactly.

The interesting question is what a DOJ anti-trust action against Amazon look like? (as opposed to them just being sued by competitors who want compensation). With Standard Oil and Bell back in the day the obvious approach was to subdivide the entity regionally. I don't that approach would make much sense with Amazon. I suppose you could craft consent decrees that would simply limit their prerogatives without directly addressing their market share. 

[Deleterious]

Amazon would dump their E-Commerce division in a heartbeat.  They make most of their profit off of AWS anyway.

[gehringer_2]

9 minutes ago, Deleterious said:

Amazon would dump their E-Commerce division in a heartbeat.  They make most of their profit off of AWS anyway.

ironically, that is an area they have plenty of solid competition.

[Deleterious]

Intel Gains on Report That Qualcomm Made Takeover Approach

Sort of interesting.  I can't see the Feds allowing this to happen.  And I don't understand why Qualcomm would want this to happen.  Manufacturing chips is extremely difficult and Intel isn't very good at it.  In fact, they currently out source some of their production to TSMC because Intel can't do it.

Intel does have some interesting chip technology coming down the pipeline.  Early benchmarks for their Lunar Lake chips look good, comparable to Snapdragon and even some of the Apple ARM stuff.  But again, those chips were designed by Intel but manufactured by TSMC.  Maybe Qualcomm wants to pick the good parts off the carcass and leave all the manufacturing garbage behind.