TLDR

MARKET RECAP → 📈  The S&P 500 (VOO) and the Nasdaq Composite (QQQ) closed slightly higher Tuesday, as the market still struggles for direction ahead of the PCE inflation data slated to be released on Thursday. Bitcoin (BTC) continued to rip higher today with its all-time high in clear sight after exceeding $57K.

DIMON'S DOUBTS → 🚨 JPMorgan (JPM) CEO Jamie Dimon plays the cautious card, eyeing a recession roulette that Wall Street's betting too optimistically against, with a side glance at interest rates playing hard to get lower and potential real estate and banking hiccups, minus the 2008 drama.

MACY'S MAJOR MOVE → 🔄 Macy's sharpens its retail scissors, cutting loose 150 underperforming stores to weave a tighter tapestry of luxury with Bloomingdale's and Bluemercury expansions, betting big on beauty and boutique over bulk.

GRANOLAS LEAD EUROPE→ 🌟 The GRANOLAS, Europe's elite 11 stocks, have whipped up a financial feast, outcooking the U.S.'s Magnificent Seven with a recipe of robust growth, less volatility, and a dash of sector diversity, stirring the Stoxx 600 to record highs amidst whispers of market indigestion.

Sean Horgan

Head of Investor Relations @MoneyLion

$shorgan*

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DIMON'S DOUBTS

📉 Recession Risks Underpriced: JPMorgan (JPM) CEO Jamie Dimon expressed skepticism about the market's optimism for a soft landing, suggesting the likelihood of a U.S. recession is higher than many anticipate. He believes interest rates could remain elevated longer than the market expects, challenging the prevailing sentiment.

🏦 Quantitative Tightening and Fiscal Concerns: Dimon highlighted the impact of the Federal Reserve's quantitative tightening and ongoing fiscal deficits as factors that could exert prolonged pressure on the economy. Despite expectations for the Fed to taper its tightening program, these elements contribute to his cautious outlook.

🏢 Sector-Specific Strains Over Systemic Crisis: While Dimon doesn't foresee a crisis akin to 2008, he warned of potential troubles in commercial real estate and among regional banks in the event of a recession. However, he views these issues as more idiosyncratic than systemic, suggesting a targeted rather than widespread economic impact.

MACY'S MAJOR MOVE

🛍 Store Closures and Strategic Shifts: Macy's announced the closure of about 150 of its namesake stores, focusing on eliminating underperforming locations, particularly those in struggling malls. This decision aligns with a broader strategy to concentrate on more profitable and better-located stores, reflecting a pivot towards higher-end department store Bloomingdale's and beauty chain Bluemercury.

🌟 Bloomingdale's and Bluemercury Expansion: In contrast to the Macy's closures, the company plans to open approximately 15 new Bloomingdale's stores and at least 30 new Bluemercury stores over the next three years. These expansions underscore Macy's commitment to growing its more successful brands, targeting higher-income and fashion-forward shoppers, and enhancing its beauty offerings.

📈 Focus on Profitability and Customer Experience: Macy's is not just shrinking its footprint; it's also enhancing the customer service experience at its remaining locations and continuing to roll out smaller Macy's stores in suburban strip malls. The company's strategy includes testing improvements in customer service at 50 stores and expanding its off-mall presence, aiming to adapt to changing consumer preferences and shopping behaviors.

GRANOLAS LEAD EUROPE

📈 GRANOLAS Dominate the Scene: A select group of 11 stocks, dubbed the GRANOLAS, drove half of the Stoxx 600 index's gains, propelling it to record highs. These "internationally exposed quality growth compounders" include giants like GSK, Roche, and LVMH, showcasing a blend of solid earnings growth, high margins, and robust balance sheets.

💹 Outperforming the Magnificent Seven: The GRANOLAS not only matched but outperformed the U.S.'s tech titans, the so-called Magnificent Seven, especially when considering risk-adjusted returns. Despite trading at high price-to-earnings ratios, they offer a significant discount compared to their American counterparts, with expectations of continued strong growth momentum.

🔍 Concentration Risks vs. Diverse Sectors: While the concentration of gains in a few stocks raises concerns about market risk, the diverse sectors these companies operate in could provide some insulation. Analysts recall past market cycles where concentration led to broader market rallies, suggesting a potential for repetition despite underlying risks of complacency and vulnerability to negative surprises.

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