Dear valued client,
Markets lost ground again this week. They’ve been going sideways somewhat in the past month without any significant directional changes. April is historically the best performing month of the year; though investors are reluctant to take large positions with lingering concerns over growing inflation and the Fed’s looming response to it, as well as the war in Ukraine further disrupting global supply chains. The Canadian consumer price index reported another price increase in goods and services; it currently sits at 6.7%, up from 5.7% last month.
Aside from gas, the most notable elevated prices in goods have been eggs. This is in large part due to avian flu that’s been detected in half the states in our neighbor to the south. Prices have roughly tripled since November. Your morning omelets have just gotten a tad more expensive.
In COVID news, the Transportation Security Administration (TSA) has removed the mask mandate for all domestic flights in the U.S. Masks are still required on international flights as they fall outside any one country’s jurisdiction. A recent survey asked travelers whether they would mask up on flights within the U.S. now that it’s optional. 46% they would, 54% said they wouldn’t.
Other companies to drop the mandatory mask mandates include mobility service providers Uber and Lyft. The U.S. transportation system isn’t yet fully mask-optional, however. Major cities such as New York, Boston, Chicago, and LA still require masking on public transportation (subways, buses, trains, etc.).
Netflix made headlines this week with its stock tumbling roughly 30%, wiping out roughly $55B in market value, as the streaming service’s quarterly report indicated a subscriber loss for the first time in a decade. As I see it, there are three main reasons for this:
- We’re (hopefully) on the tail-end of this pandemic. With inflationary pressures and other activities becoming available again, consumers are foregoing sitting in front of the TV all day watching Tiger King.
- Competition. With a plethora of streaming services now available (Amazon Prime, Crave, Apple TV, Disney +) Netflix is struggling to occupy the same market space as it used to.
- Its content doesn’t stand out. It needs to continuously release hit TV shows like Squid Game to attract and retain its subscribers. Its content simply isn’t resonating enough to incentivize viewers to remain customers.
Legendary hedge fund manager Bill Ackman, who bought a $1.1B stake in Netflix a mere three months ago, sold his entire stake this week realizing a loss of over $400M.
In recognition of Earth Day, I’d like to close with a quote from 1854, penned by revered Native American Chief Seattle, after whom the city of Seattle was named.
“All things are connected. Whatever befalls the Earth befalls the sons of the Earth. Man did not weave the web of life. He is merely a strand in it. Whatever he does to the web, he does to himself.”
Have a terrific weekend.
PW
