Vested Shorts: Amazon vs. SpaceX, BYD’s rise, US dollar, and changing America’s food habits

by Parth Parikh
October 7, 2023
3 min read
Vested Shorts: Amazon vs. SpaceX, BYD’s rise, US dollar, and changing America’s food habits

In today’s edition

  • Amazon’s Project Kuiper takes flight
  • BYD’s rapid ascent in the EV market challenges Tesla’s dominance
  • Rising US dollar index
  • Former FTX developer’s testimony
  • Ozempic’s popularity might reshape America’s dietary habits

Market Snapshot

On Friday, the stock market witnessed a surge, driven by a favorable September jobs report that displayed significant job gains and moderated wage inflation. This uplifted the S&P 500 Index from its four-week slump and pushed the Nasdaq Composite to a two-week high. Despite initial apprehensions about inflation, the report showed a 336,000 increase in nonfarm payrolls, a moderate wage growth of 0.2%, and an unchanged unemployment rate at 3.8%. 

By week’s end, the S&P 500 stood at 4,308.52 (up 0.5%), the Dow Jones at 33,407.58 (up down 0.3%), and the Nasdaq at 13,431.34 (up 1.6%). 

As we head into next week, third-quarter earnings reports will dominate headlines. Keep an eye out for results from major players like Delta Airlines, Domino’s Pizza, PepsiCo, United Health Group, and Walgreens Boots Alliance. Additionally, financial giants such as Citigroup, JPMorgan Chase, PNC Financial Services, and Wells Fargo are slated to unveil their numbers next Friday.

Market close data: Week of Oct 2-6, 2023

News Summaries

Amazon’s Project Kuiper, aiming to create a global satellite internet network, successfully launched its first two satellites. This development is part of Amazon’s over $10 billion investment to compete with SpaceX’s Starlink service. After some launch vehicle changes due to delays, the satellites were sent into space using the United Launch Alliance’s Atlas V rocket from Cape Canaveral. Amazon has secured launch contracts worth around $7.4 billion with firms including ULA and Blue Origin. This procurement has sparked controversy, with claims suggesting biases against SpaceX due to personal tensions between Bezos and Musk. Amazon plans further Kuiper satellite launches next year and aims for customer beta testing by 2024.

Chinese automaker BYD has rapidly risen in the electric vehicle (EV) market, coming close to becoming the world’s top seller of all-electric cars, with only 3,000 deliveries behind Tesla. In the latest quarter, BYD reported 432k EV deliveries, closely trailing Tesla’s 435k, which saw a 7% drop due to planned factory downtime. Despite selling just 39,000 electric cars in the first quarter of 2021, BYD surged to 143,000 sales a year later, outpacing the entire VW Group. As BYD expands its international exports, it might soon surpass Tesla in deliveries. However, in terms of market value, Tesla remains dominant, boasting a market cap nine times larger than BYD’s.

The US Dollar Index (DXY) has risen over 7% since mid-July against the basket of currencies. The rise is influenced by factors such as high U.S. interest rates, which are attracting global capital. This strong dollar has mixed implications: while beneficial for U.S. companies importing supplies and tourists abroad, it poses challenges for U.S. exporters by making their products more expensive overseas. Moreover, emerging economies may find it harder to repay dollar-based debts. As the third-quarter earnings season approaches, experts are watching for the dollar’s impact on corporate profits, especially as a robust dollar can potentially hinder international profits.

In the criminal trial of Sam Bankman-Fried, former FTX developer Adam Yedidia testified that he had informed Bankman-Fried about a significant financial discrepancy months before FTX’s collapse. After fixing a software error in June 2022, Yedidia revealed a liability issue, shedding light on the problematic relationship between FTX and its sister trading firm, Alameda, in handling customer deposits. Yedidia, who testified under immunity, ended his association with Bankman-Fried after learning of Alameda’s misuse of FTX customer deposits. He recalls Bankman-Fried hinting at the company’s uncertain future.

The rising popularity of weight loss drugs like Ozempic may decrease Americans’ consumption of high-calorie foods. Walmart’s U.S. CEO observed a slight reduction in food purchases among Ozempic users. While the drug’s long-term effects are still being studied, a Morgan Stanley report indicates that these drugs could lead to a 20% calorie intake reduction in the next decade. This trend might impact companies like Pepsi and McDonald’s. However, the adaptability of the food industry could counteract major shifts in consumption patterns.

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