by Shane Ormond
On May 21, 2020
Target reported that online sales on an average day in April exceeded last year’s Cyber-Monday sale, because if you’re not going to buy a Cuisinart Perfectemp 14 Cup Programmable Coffee Maker at the end of the world, when are you gunna buy one?
- Record Investments in Alt Foods Last Quarter
- National Lampoon’s EU Vacation
- Fearing the End of the World, Man Returns Ancient Stolen Relic
- Putting Our Skills to the Test
Record Investments in Alt Foods Last Quarter
Record sums of cash were invested in ungodly meat abominations in Q1 of 2020, as the price difference narrows between fake meat and the real MooCow.
(Well folks, it looks like we’ve officially used up all our good jokes for the week. Only stinkers from here on out I’m afraid.)
More money flowed into wacky meat and dairy alternatives last quarter than in the whole of last year, according to an investigation by the Financial Times. Investors pumped a record $930 million into the sector last quarter, compared to just $824 million raised for the entirety of 2019.
I’m pretty sure if God wanted us to drink “almond milk,” he would have given us almond nipples. But the pandemic has created a unique opportunity for alternative, sustainable foods.
Disruptions caused by the gross weird virus thing that I’m sick of talking about exposed the vulnerabilities in our food supply chain.
Outbreaks of the virus have led to the closure of several major slaughterhouses where, judging by the astronomical infection rate in those facilities, they must be high fiving each other with their tongues.
As the supply chain breaks down, the price of meat has skyrocketed, making the Eldritch monstrosities created by companies like Impossible Foods and Beyond Meat look a lot more reasonably priced in comparison.
Retail sales of sustainable alternatives boomed by 265% in the eight weeks to mid–April, as folks trapped in doors with nothing to do said “yeah, screw it, why not?”
Plant–Based Patty was my high school mascot.
For the duration of the meat shortage, Beyond Meat said it would slash its prices and sell heavily discounted value packs of their products to make up some of the shortfall (and convince folks who normally wouldn’t try their delicious sin burgers to give them a shot).
Shares in Beyond Meat have risen 80% since the start of the year, even as the broader Nasdaq composite has struggled to break out of red.
It remains to be seen if the sector is making long–term converts who will continue to buy their Frankenmeat after this whole pandemic thing is done and dusted.
But Donald McLee, analyst at Berenberg, told the Financial Times that the overall trend towards “environmental sustainability, health and wellness, and animal welfare” would remain positive for the “plant protein category.”
National Lampoon’s EU Vacation
The EU has unveiled a plan to attempt to salvage Europeans’ summer vacations and resurrect the non–existent tourism industry.
150,000 people have died from the virus in Europe and Britain since the beginning of the pandemic. But as the rate of new cases starts to level off, governments are eager to get folks looking at boring buildings and buying overpriced sandwiches again.
“This is not going to be a normal summer, not for any of us. But when we all work together, and we all do our part (…) then we don’t have to face a summer stuck at home or a complete lost summer for the European tourist industry,” Commission Executive Vice–President Margrethe Vestager told reporters earlier today.
The EU guidelines for having a totes awesome vacay in the middle of a pandemic lay out measures for opening borders, and traveling on airlines, ferries, and buses without accidentally causing an outbreak of the virus.
The key takeaway of the report is that EU countries with similar rates of infection and strong healthcare systems should lift travel restrictions between each other.
(So if you live in a COVID–19 disaster zone you can only vacation in another COVID–19 disaster zone. Folks will still be dropping like flies around you but the weather will be nicer.)
The plan notes, however, that social distancing rules will still apply during your vacay. So you can go to Paris and see the Eiffel Tower just like you’ve always wanted to as long as you don’t go within 6 feet of anyone while you’re there.
It’s always been a dream of mine to visit France but not have to talk to any French people.
The guidelines also recommend implementing robust testing and contact tracing, so folks have the confidence to socially distance themselves in your hotel or campsite.
In Other News
(Ancient curse! I knew it! Source)
ONE LAST THING
Putting Our Skills to the Test
This week, our in-house smart guy Graham Summers has been teaching you guys some key techniques for blocking out the noise and reading the market with a cool head.
In today’s one last thing, we’re going to put those skills to the test.
Take it away Graham.
Watch This Closely *Today*
By Graham Summers
In the last few days, we’ve covered the trading terms “resistance” and “support.”
By way of review:
- Resistance is a particular price level that stocks struggle to break above. From a supply and demand perspective, resistance represents a level at which buying demand struggles to overcome selling pressure. As a result, this level acts as “resistance” to a rally.
- Support represents a line at which stocks refuse to break lower. From a supply and demand perspective, support is where buyers come into the market to absorb selling pressure. This is what stops the markets from breaking down further.
We got a sense of the significance of both over the last few days. Stocks failed to break above resistance at 2,930 on the S&P 500 (red line below) and proceeded to drop to support at 2,800 (green line).
To anyone who had already charted out these lines, yesterday’s selloff wasn’t that scary. However, if you hadn’t already looked to see where support lay, the selling pressure yesterday was likely very worrisome.
I know this for a fact. I saw a number of investors calling for a “crash” or stating that “the top is in” — despite the fact that stocks are roughly trading at the same levels as they have been for the last three weeks!
Blocking Out the Emotional Noise
If you want to make money as a trader, it’s absolutely essential to get your emotions under control.
This is why concepts like resistance and support are so important. They introduce a sense of discipline that stops you from trading based on feelings.
With that in mind, now that stocks are breaking down, I’ve drawn the key support lines to watch on the chart below.
Rather than predicting a crash, these are the levels I’m watching for the stock market.
If we break below 2,800 on the S&P 500 on heavy selling, the next level is 2,730.
However, if stocks CANNOT break below 2,800 on the S&P 500, this tells us that the bears are not committed. That opens the door to a major reversal and move higher.
Again, I’m watching how stocks handle the 2,800 level closely today. I recommend you do the same.
Closing Data for Today
|S&P Index 500||2,850.88||↑ 1.34%|
- The U.S. is on track to produce more electricity from renewable power than from coal this year, a first for the country.
- Starting Monday, Uber will require all drivers and riders to wear masks in an effort to stop the spread of the coronavirus.
- Stocks tumbled yesterday after Fed Chair Jerome Powell warned of a prolonged downturn.
Editor, One Last Thing