How Jennifer Aniston’s LolaVie brand grew sales 40% with CTV ads
The DTC beauty category is crowded. To break through, Jennifer Aniston’s brand LolaVie, worked with Roku Ads Manager to easily set up, test, and optimize CTV ad creatives. The campaign helped drive a big lift in sales and customer growth, helping LolaVie break through in the crowded beauty category.
Good morning partner,
Few things to cover this morning:
** PREMIUM MEMBER REMINDER (If you haven’t yet) ‼
You can now access the Telegram Community to receive our live trade desk alerts in real time (no more waiting on emails to hit), and a dedicated Q&A space with access to Gabriel for anything you’d like to discuss
Friday’s Session
For the first time this month, the S&P went down overall to close on Friday despite the semis/memory trade pushing higher.
I believe the reason is that NVIDIA and AVGO didn’t make that big of a move, whereas most of the hyperscalers and real economy names fell enough to drag the rest of the index lower.
Notice one thing here.
Memory and neoclouds went up, and so did the industrial names that are directly attached to the AI, even though semiconductors barely rallied.
Which is more of the same tug-of-war I have been pointing out recently:
Quality cash flows vs growth at any cost
These memory and neocloud names have adopted the “growth at any cost” view, betting an irresponsible amount of their balance sheet on these cloud compute deals, relying directly on OpenAI and Anthropic to repay them.
We will see what the state of this deteriorating debt quality is on Thursday, when Oracle (ORCL) reports earnings.
If you haven’t,
Let’s take a look at Friday’s leaders and laggers:
Technology, Industrials, Utilities.
U.S. 10-year yield hit 4.8% last week, and I have reason to believe (after catching up to Goldman’s view on Treasuries) that all this AI bond issuance is beginning to influence the rest of the fixed income market, like Treasuries.
For now, know that industrials and utilities are quite the opposite when it comes to rising yields, as industrials should sell while utilities rally as a result of their rate sensitivity.
The fact that they both went up with bond yields means one thing:
Debt intensity tied to AI boosts the “growth at any cost” bet, as further rounds of capex and investments are expected
The laggards are there to tell you the same conclusion.
Cyclicals, healthcare, communications.
Nuanced as this is, the message is as follows:
Cyclicals are extremely rate sensitive, healthcare is defensive as they come, and communications are another leg of rate sensitive names
In other words,
This is nothing more than a broad equity de-risking driven by rising yields.
As long as conditions remain apt for further AI bond issuance and financing, I think the tug-of-war will continue to worsen and kill this market.
Aggregate vs Reality
People quote the tightening spreads in the high-yield corporate bond market.
Tight spreads mean there’s a lower risk perception on the debt carried by most corporates in the United States.
However,
Current levels are not an appropriate gauge if you’re looking to measure the state of credit around AI.
Why?
Because these spreads are made up by the 500 companies in the market, and we know 490 of them are not doing much as far as credit is concerned.
So of course, the overall gauge will remain tight as there’s not enough outstanding volumes and credit balances to really drive the index.
When you zoom in to tech specifically though, you’ll find record high credit default swaps (CDS) prints for most (if not all) of the AI companies.
Simply put,
The market is confident 490 companies out of the S&P 500 are doing just fine in managing debt, and in fact are prepared to start taking on more debt if needed.
The remaining 10, according to credit markets, are facing a rapidly rising risk of default as a result of deteriorating debt and cash flow quality.
News
Brent Hits $100 after a new round of strikes in the Middle East, creating an even wider spread between diesel and crude, a topic we will get into later this week.
Global M&A Activity begins to approach cyclical highs driven by AI-related deals, a clear symptom that tends to show up around major capital cycle turns.
Labor Numbers Weaken for another month as the number of involuntary part-time or below $26,000 earners continue to rise, driving a weaker labor market into an already struggling consumer.
Sovereign Funds Plan to Sell another round of U.S. Treasuries, as the shift in yields begins to make other countries (like Japan) more attractive on a relative basis. Here is how I see the carry trade shifting around in the equity markets.
Movers & ES Levels
Smith & Wesson 📈 Popped over 5% after a double-beat last week, showing the benefits of unfortunate conflicts continuing to escalate around the world.
Robinhood 📈 Pops on higher volume for trading agents, driven by the sudden rise in Bitcoin before it took on a flash dive on rising yields.
Adobe 📉 Fell over 6% as a new CEO is announced, though this was already old news making me think the selloff was market-driven and a set up for its earnings release this week.
Tesla 📉 Lost more than 5% after federal regulators begin to dig into their autonomous cyber cabs in relation to whether they meet appropriate standards.
Now let’s get into some ES levels for today.
Last week we closed with a very defined range of $7,725-$7,775 for the balancing start.
Sellers kicked off their aggressive offers at $7,750 with no buyers to match the aggressiveness until we broke below $7,725 and became passive to hold the most important mark of the market so far.
Which is $7,700.
The overnight session opened right below it with buyers stepping in at $7,690 to create the first target for sellers to attack throughout the day.
This now gives us the balance to start the week, a tighter range of $7,690 to $7,710 to trade in.
I suspect inflation data this week will help us trade outside of this range to find new balancing distributions to trade in.
Speaking of distributions, that means anything between $7,650 and $7,775 is possible this week, especially as the VIX continues to remain artificially compressed.
Portfolio
The long/short options portfolio is being rolled this week, which will significantly change the setups we currently have around the most price and shortage-sensitive areas of AI.
After the bell today, a fresh look at PMI data from last week will show you why some names in the portfolio have been reiterated as holds and potentially adds under the right price action.
It also will expand our watchlist to keep adding further growth-oriented investments in the real economy as we continue to spot rotations in economic activity.
Overall,
I am confident this quarter, and the stretch into the end of the year, will drive the portfolio to new all-time highs.
China in particular is becoming interesting here as new Goldman Sachs prime brokerage data comes to our possession, and dealer gamma squeezes provide very clear upside scenarios in AI-related players in Asia.
And then there’s the widening diesel/crude spreads pointing us to a new basket of energy plays that could deliver another round of upside.
Here’s the positioning update for today’s premium members:
Subscribe to our premium content to read the rest.
Become a paying subscriber to get access to this post and other subscriber-only content.
Upgrade