This Newsletter is brought to you by…
Cardiol Therapeutics (Nasdaq: CRDL) is a clinical-stage life sciences company focused on the research and clinical development of anti-inflammatory and anti-fibrotic therapy for the treatment of cardiovascular disease (“CVD”)
Recently, Cardiol disclosed promising results regarding their clinical study:
🧬 Cardiol enrolled its first patient for its, Phase II, ARCHER study, and is expected to enroll another 100 patients at major cardiac centers in North America, Europe, Latin America, and Israel.
❤️ Dennis McNamara, Director of the Center for Heart Failure Research at the University of Pittsburgh Medical Center, chimed in by saying, “I am pleased this important milestone has now been achieved and the ARCHER study, […] is formally underway […] we believe cannabidiol has the potential to truly benefit patients with this condition.”
For more information on Cardiol Therapeutics, check out their Investor Relations page.
A Quick Market Recap
“Price stability is the responsibility of the Federal Reserve and the bedrock of our economy.” ~ Jerome Powell
Intending to reach the benchmark inflation rate, the Fed and other central banks plan to continue raising interest rates until there are clear signs that inflation is slowing down to the optimal level of 2%.
Following the news, nearly $78 billion was wiped from America’s wealthiest, reflecting a broader reaction by financial markets as every day since has been in the red.
While less than ideal for homeowners and investors, Powell exclaimed that:
“These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”
Since little is known about how the markets will perform in the near future, the best thing to do is be prepared.
Who knows, a sudden crash may present wonderful opportunities to buy assets at a significant discount.
Here is how major indexes performed this week:
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Lululemon (LULU) soars after strong earnings beat & favorable outlook
Despite high inflation causing households to pinch their purse a little tighter, the Canadian retailer Lululemon is exceeding expectations amidst a turbulent economy.
With its higher-income customer base, the athletic apparel company appears undisturbed by poor economic conditions given that it is growing in all aspects.
🚴♂️ Earnings per share: $2.20 vs. $1.87 expected
⛹️♀️ Revenue: $1.87 billion vs. $1.774 billion expected
🧗♂️ Same-store sales grew 23%, while net store sales grew 29%
🏋️♀️ Store traffic increased over 30%, and e-commerce traffic rose over 40%
🏊♀️ CFO Meghan Frank explained, “Despite the challenges […] guest traffic in our stores and on our e-commerce sites remains robust, which speaks to the strength of our multi-dimensional operating model.”
Are you bullish on Lululemon (LULU)?
Nvidia (NVDA) stock tumbles as the US bans exports to China
The race for microchip supremacy is ramping up as the US looks to curb China’s growth within advanced tech markets.
With geopolitical tensions rising and governments looking to produce semiconductors locally, this mandate is sure to accelerate the process.
👾 The chip maker said in a filing yesterday that the US government imposed a new licensing requirement, effective immediately, blocking any exports of Nvidia’s A100 and H100 chips to China and Russia.
😭 The license requirement is expected to affect about $400 million in potential sales to China for the rest of the year; Nvidia does not do any business with Russia
📊 In 2021, China made up 26.42% of revenue at $7.111 billion; other revenue streams were Taiwan at $8.544 billion (31.75%); US at $4.349 billion (16.16%); other countries at $6.910 billion (25.67%).
📉 Nvidia (NVDA) is down 53.19% YTD, now trading at a P/E of 36.89, and a market cap of $342.82 billion
Will Nvidia (NVDA) be a top chipmaker after losing the Chinese market?
🚨 Microchips stocks are down bad, but this is the perfect opportunity to buy this diamond of a small cap while it is cheap.
Snap Inc. (SNAP) jumps after announcing a new restructuring plan
It has been a brutal year for the once revolutionary social media company, as the price of Snap’s stock fell more than 75% YTD.
But there is a glimmer of hope with the announcement of a new restructuring plan that is expected to reduce expenses and improve focus on its core businesses.
👻 CEO Evan Spiegel declared, “We are restructuring our business to increase focus on our three strategic priorities: community growth, revenue growth, and augmented reality.”
🤬 Snap reported a disappointing Q2, posting YoY revenue growth of 8%, and is planning not to provide guidance for Q3.
💸 The company has failed to be profitable for the past 3 years and is currently trading at a P/B of 4.92
🛠 The restructuring plan includes:
- Laying off 20% of its staff (over 6000 employees)
- Promoting senior vice president of engineering, Jerry Hunter to COO.
- Scrapping several projects including Pixy, Snap Minis, Snap Games, and Zenly
Do you think Snap Inc. (SNAP) is undervalued at $16.93 billion?
Here is what our IG community had to say 👈🔥
DID YOU KNOW?!
The Federal Reserve once raised interest rates to 22.36% in 1981
High inflation is nothing new for the world’s largest economy, but in the late 1970s, the “Great Inflation” destroyed households buying power at a rate never seen before; inflation peaked at 14.6%, the highest level on record.
In response, the Federal Reserve and Chairman Paul Volcker took an unprecedented approach to tackle runaway inflation by aggressively raising the federal funds rate, and forcing the US into a recession.
Here are a few lessons from the Great Inflation of the 70s and Volcker’s unconventional strategy:
🚀 Inflation hovered between 5% and 6% at the start of the decade, but began reaching double digits in 1974 and eventually peaking at 14.6%.
👑 The “Nixon shock” as it was known, resulted from President Richard Nixon abandoning the Bretton Woods system which halted the exchange of dollars for gold by foreign central banks, meaning that world currencies “were now completely unanchored.”
🛍 The Nixon administration introduced wage and price controls from 1971 to 1974, but this only slowed prices while food and energy shortages increased.
🛢 Members of OPEC placed an embargo on the US for their support of Israel in the Yom Kippur War, which resulted in oil prices reaching a then high of $143.07 per barrel.
🏚 Paul Volcker’s aggressive interest rate policy forced the US into a recession from July 1981 to November 1982, with unemployment peaking at approx. 11%
Do you see today’s federal reserve taking a similar approach to combating inflation?
🚨 If you are interested in learning the different advantages of investing in small and large-cap stocks, check out our article: What is Small Cap vs Large Cap