More Insider Trading From Congress

Market Update

Market Mood 😒

Here’s a some quick hits on what’s happening in the world of economics and the market…

• 🧐 The Fed’s interest rate announcement is today. The market has already priced in a 99% chance that rates will remain untouched, so the street will be paying more attention to the press conference after the announcement to get a read on how the Fed is eying up interest rates for the next year. We’ll monitor that and keep you posted on Twitter, or X I guess.

• 🥸 Investors are still very uncertain of the future, with Canada’s annual inflation rate rising and a big plunge in U.S. housing. Expect more choppy waters in the markets.

• 🥕 Instacart IPO’s under the ticker CART. They pop off over 12% in their first day of trading while last week’s big IPO, ARM, continues to decline. I expect the decline to occur with Instacart too. Two years ago they were valued at $39B in the private markets and just IPO’d at $9.9B… People are about to get much more frugal with student loans hitting, so you really think a luxury like grocery delivery is going to have more or less demand in the next year? I mean c’mon I’m not convinced.

Buyer Busted 🚨

Former Congressman Stephen Buyer got nailed for insider trading on Tuesday, and he’ll be serving 22 months in prison. Buyer used information he learned before T-Mobile and Sprint merged in 2018. Previous to his consultant role, Buyer was a member of the House of Representatives.

300,000. That’s how much Buyer made off inside trades. This may not be much compared to other government officials, but it’s worth noting that there have been recent talks to ban members of Congress from trading stocks. A certain someone vehemently disagrees. Interestingly enough, her salary is ~$220k per year, but her net worth is…. $120 million. But, it’s a “free market economy”. No one is buying that.

Why does all this matter?

Piggybacking off of Bill Gurley’s speech on regulatory capture, it’s important for investors to keep in mind the behind-scenes action when picking investments. 2,600 government employees reported owning stocks in companies they were lobbying for. There is quite a connection between money and government regulation, and that doesn’t seem to be going anywhere anytime soon. Follow the money.

Disney all in on parks 🎢

CEO Bob Iger announced today that the company plans to expand, even double its investments in its theme parks to $60 billion in the next 10 years. The media giant has relied on the parks as its top money-maker after Disney+ flopped.

Sticking with politics, Disney has been feuding with Ron DeSantis, suing him over his regulatory efforts to control Disney World in Orlando. We’ll keep an eye on that since we know how big money and politics mix so well.

Disney has to keep innovating as Universal continues to grow and threatens a share of Disney’s customers. Disney is throwing a ton of capital in order to improve and expand the parks. The company owns an additional 1,000 acres and is targeting a whopping $700 million fans who have yet to visit a park. Some investors are longer-term bullish on Disney, projecting that the company will rebound and provide long-term value.

Quote of the Day

“Unfortunately, from what I can see from my vantage point as the U.S. Attorney here, illegal insider trading is rampant and may even be on the rise.” - Preet Bharara

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