Posted May 09, 2022
By Matt Insley
Trading Places (Tech Winners and Losers)
As for inflation’s “transitory” nature, a reader says…
“My sister’s rent has gone up yearly; she is on Social Security only and is in her 70s, and walks with a walker. They are now upping her rent by more than $50 since new owners took over her apartment complex. Don’t tell me they will reduce her rent later.
“My secondary and long-term health care insurances keep climbing yearly as well as the cost of prescription drugs. Don’t tell me they will decrease the price.”
Another reader concurs: “For the unfortunate retired folks, who have already been getting cheated by Social Security's phony cost of living adjustments, rampant inflation is a disaster with no mitigating ‘wage increases.’”
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Your Rundown for Monday, May 9, 2022...
Tech stock earnings show a major shift from the early days of the pandemic; meaning, some pandemic winners and losers have traded places.
Ecommerce platforms, for example, including eBay (EBAY) and Etsy (Etsy) have cooled with the removal of lockdown restrictions.
“Both [companies] issued weaker outlooks for the months ahead and said they were experiencing ‘headwinds,’ with Etsy singling out issues related to consumer discretionary spending, coronavirus-related reopenings and geopolitical events,” The Financial Times says.
And by the closing bell Friday, EBAY shares traded down 16% while ETSY was down 11%; both stocks are continuing to fall this morning. (To be fair, Nasdaq stocks across the board are slump this morning.)
On the other hand, the tech-adjacent tourism sector, which was hammered hard in 2020, is rebounding, evidenced by recent TSA numbers…
“Booking Holdings [BKNG] said its gross travel bookings totalled $27.3 billion in the three months to March 31, a quarterly record and a year-on-year increase of 129%. Revenues of $2.7 billion represented a 136% jump from a year ago,” the FT notes.
“TripAdvisor [TRIP] reported a 113% increase in revenues and its $262 million sales figure beat analysts’ expectations of $251 million, helped by a 229% increase in revenue in its ‘Experiences & Dining’ segment.”
But buyer beware: “Given the macroeconomic issues facing the [travel] industry, investors may be shifting their focus toward specific companies,” says Barron’s. “Booking Holdings… parent of online travel agency Booking.com, is a favorite among analysts and investors.”
JP Morgan analyst Dough Anmuth says: “We continue to believe Booking Holdings is the best-positioned company in the online travel space.
“We think there is meaningful room for global share gains,” he says, while putting a $2,900 price target on BKNG, up over 33% from its price today.
Market Rundown for Monday, May 9, 2022
S&P 500 futures are down 1.55% to 4,055.
Oil is down 2.3% to $107.20 for a barrel of West Texas crude.
Gold is down about 1% to $1,865.20 per ounce.
And Bitcoin continues to slide: It’s down almost 5% to $32,935.
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Happy Monday… Check back from more on Wednesday.
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