DD Digest: Economic Hurricanes & Unexpected Profits

A quick fix of the latest financial happenings.

Jun 03, 2022

Last week, we discussed SNAP’s share price collapse and whether it was justified. Today, we’re experimenting with a new, short-form segment: DD Digest.

We just love alliteration around here.

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Without further ado…

One Company Catching Investors Off Guard: Chewy

A 61.2% loss is a rough fall, but things might be looking up for Chewy, an online retailer of pet food and related products. If you squint hard enough at the above chart, you’ll see CHWY shares recently got a little boost.

Why?

The company reported better-than-expected earnings on Thursday. While net income fell year over year, the consensus EPS estimate for Chewy’s EPS was a loss of $0.13 — actual EPS was $0.04. That was enough to give some momentum to e-commerce stocks.

Shares closed at $29.18 on Thursday, up 24.22% for the day. Here are Chewy’s Q1 highlights:

Two Ominous Quotes: JPM CEO Jamie Dimon

On May 23, during JP Morgan’s investor day, CEO Jamie Dimon opined on the current political and economic environment. After highlighting the uniqueness of the current situation — a strong US economy fueled by unprecedented monetary and fiscal policy that’s facing headwinds from high inflation and the war in Ukraine — he shared this assessment.

(The following quotes were lightly edited for clarity and emboldened for emphasis.)

“Strong economy, big storm clouds. I'm calling them storm clouds because they're storm clouds. They may dissipate. If it was a hurricane or a tsunami like we had in 2007 or 2008, I would tell you that. They may not dissipate. So, we're not wishful thinkers. Obviously, we want it to turn out well, but we can handle all of that.”

This Wednesday, roughly one week later, he tweaked his weather report during a financial conference:

“Look, I’m an optimist. I said there are storm clouds, they’re big storm clouds, they’re — it’s a hurricane.”
“Right now, it’s kind of sunny, things are doing fine, everyone thinks the Fed can handle this. That hurricane is right out there, down the road, coming our way. We just don’t don’t know if it’s a minor one or Superstorm Sandy…and you better brace yourself.”