The Market --- May 1, 2024

Locator: 47123INVESTING.

WTI drops below $80.

Weekly petroleum report, link here.

• US crude oil in storage surged: up 7.3 million bbls, but still 3% below the five-year average:
• refiners operating at 87.5% capacity
• jet fuel supplied was up a respectful 4.5% compared to last year
• WTI after the report: $80.89.
  

The market: wow, what a huge buying opportunity. We don't often get buying opportunities like this.

CVS: plunging 18% as health company slashed profit outlook, and misses earnings. 

This is interesting because this comes the same week that it's being reported that Walmart is getting out of the "health clinic" business. Headline: Biden's Medicare re-pricing putting huge pressure on health care providers. Middle-class taxpayers will be happy to see administration attempts to rein in Medicare health care costs. The other side of the coin: low-income, low-middle class lose access to low-cost health care. Biden can talk about lowering health care costs; Jane Sixpack unable to find healthcare services for her family in her neighborhood.

Story of the day: Starbucks. Today, ticker -- worse day in almost two years. Right now, down significantly, nearly 20% in one day. Worse earnings miss in company's history. Second consecutive quarter with negative earnings; hasn't happened since the Covid lockdown.

Jim Cramer actually used the word "existential" when interviewing the Starbucks CEO this morning. Jim Cramer: "Is Starbucks coffee simply too expensive?" Wow -- hard-hitting interview. A must-watch interview. Will probably show up later today. Wow, Cramer was irritated. Wow. Amazing interview. Three huge headwinds: high prices; slow app order completion; boycotts in Mideast. 

Ticker: since Narasimhan became CEO:

• SPX: up 28.75%
• SBUX: down 21.86%

I go through phases. About a year ago I was going to Starbucks regularly and but then quit abruptly and completely. I haven't been in a Starbucks for at least a year. For me it simply got too expensive. The loyalty reward program was a joke.

Exhibit A: when flying to Portland, I used to stop at Starbucks to get a black coffee and a plain, not-particularly-tasty butter croissant -- price -- $8.40. That's unpalatable. $8.40 for a coffee and a croissant.

If a plain, regular-size coffee and a plain crosissant is costing $8.40, I would assume a "specialty" coffee and a real "entree" would trend toward $15. Carl Q and Cramer drink coffee made at home; David Faber, $2.00 coffee at nearby subway location (not Starbucks).

But Cramer brought up the other headwinds.

At the airport (and at the local Starbucks, for that matter, also) service is incredibly slow. At the airport, folks are standing around five to ten minutes (?) after placing their order -- and that's after standing in line. It really is incredibly slow. For a coffee and a croissant. The CEO admits there is a big problem with folks using their Starbucks App to start and order and then not complete it because it simply takes too much time.

The CEO broke down his customer base into three groups: the casual visitor, the loyal customer (me, a year ago); and the super-loyal customer.

The casual visitor is disappearing; the loyal customer is quickly becoming the casual customer. The question not asked: what percent of the customer base is the super-loyal customer and to what extent are super-loyal customers "buying down."

Boycotts. I had not given much thought to the Starbuck boycotts in the Mideast but with the recent dust-up in NYC (Columbia University) one must reconsider exactly how severe the "Mideast" boycott might be worldwide. I can't imagine those Hamas / Palestinian protestors in NYC stopping by Starbucks on the way home from the protests.

Anyway, enough of this. But $8.40 for a coffee and a plain croissant. Head-to-head at PDX, a Starbucks coffee/croissant for $8.40 vs an incredibly remarkable (in comparison) Big Mac meal for $9.25.

I can't imagine Starbucks prices coming down much:

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Huge Sell-Off Yesterday

We don't often get buying opportunities like this.

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Intel - INTC

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Disclaimer -- Briefly

Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple.

See disclaimer. This is not an investment site.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.

Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple.