Stock market crash, August be quiet - how's the economy responding?

nThe stock market effectively lost $2 trillion this week for several different reasons - scarcity sitting on top of that.

Japan’s stock market crashed with a record low since 1987. Add this to recessionary fears, slower economy, ongoing wars, and general uncertainty, plus the political questionnaire, and here’s a mix that pulled the plug of unsafe investments pulled back for cash reasons or moved to safer assets.

Crypto has its worst day since the winter, too - this tends to span across multiple fronts.

The very reason I author this newsletter:

Business is ran by global economic forces.

Wars in Israel or Ukraine or a market crash in Japan halt gas supplies and elevate prices in Europe or tank the US market (and the EU ones, for that reason).

Failing to keep an eye on the global macroeconomic map means you’re running blind - getting slapped by unexpected surprises and being unable to predict what comes next.

Seasonality plays a role for similar reasons: summer is slow due to school vacations and parents busy parenting, organizing summer vacations, taking annual leaves. Soccer fans enjoyed the Euro 2024 last month and the past two weeks have been all about the Olympics - and this isn’t over yet.

Consumer attention is at its lowest - and even if you chase it right now, going against the wind will be harder than ever.

The types of contracts we see happening right now are triggered by:

1. Deals and due diligence started months ago. We have conversations from last Q4 revisited during the slowdown with lower priority projects catching up now.

2. Q4 preparation. Contracts for campaigns and builds until end of Sep to make the most out of Q4.

3. Internal turbulence. Companies changing leadership, post-layoffs, old channels failing to perform and looking for better solutions.

4. Vendor swap. Annual contracts expiring or contractors/agencies underperforming hard, adding fuel to the fire of looking for alternatives or changing a SaaS and seeking the right partner.

5. Exhausting budgets. The US fiscal year starts on Oct 1, so depleting any remaining funds on R&D or wrapping up projects now is still in the works.

6. Hard workers. Founders and entrepreneurs who always grind have fewer distractions now or end up catching on some initiatives that weren’t a priority before. They also stick around in Slack groups or communities or LinkedIn and see sporadic opportunities to test new ideas.

This is why most of our contracts at DevriX this quarter revolve around our EaaS service or GTM strategy.

And my advisory work is fully focused on unlocking new channels, launching campaigns, and putting KPIs and the P&L in order.

If you want to know more, hit Reply.

And if you want to help a fellow teammate or a partner, forward this email their way!

Yours,
Mario

✍️ The Classic Marketing Funnel No Longer Works - The marketing funnel known for 120+ years no longer works. 2019-2022 were a heavy mix of 80-90% R&D and heavy engineering services while 40 to 50% of our demand now is building innovative solutions.

✍️ 3 Ways to Kill a B2B Unicorn in No Time - How to kill a B2B unicorn idea in terms of startup scalability, I’m referring to the last ARR tier.

📧 Seeking Alpha - @SeekingAlpha is phenomenal when I’m actively hunting for stocks. This is a crowdsourced community for top picks, dividend stocks, pennies, tech, bonds, and crypto. You can sign up through here.

📧 Yahoo Finance - @YahooFinance covers a few long-form stories. You can rely on The Morning Brief to provide the top news stories which are a synopsis of what trends to watch in markets. Sign up from this link.

📃 X files suit against advertisers - Last year Elon Musk told advertisers to “go fuck” themselves. Then, he tried wooing them at the Cannes Lions Festival. Now, he’s suing them. On Tuesday, X CEO Linda Yaccarino posted in an “open letter to advertisers” that the platform has filed an antitrust lawsuit against two of the most prominent advertising industry trade groups, the Global Alliance for Responsible Media (GARM) and the World Federation of Advertisers (WFA), as well as the GARM members CVS Health, Mars, Orsted, and Unilever. CVS Health, Unilever, Mars, and GARM did not respond to requests for comment by publication time.

📃 Google found guilty of monopoly - A judge on Monday ruled that Google’s ubiquitous search engine has been illegally exploiting its dominance to squash competition and stifle innovation, a seismic decision that could shake up the internet and hobble one of the world’s best-known companies.

📃 AI is not disrupting search - Folks at Sonata Insights recently analyzed Datos‘ clickstream panel to uncover consumer search behavior insights in the “age of AI”. If you’re in the digital marketing world, it’s probably worth your time to download and read.

📃 Google Shopping Product Images Showing User Review Images - Google seems to be showing photos from reviews from actual users in the Google Shopping product image carousel. So when you click on a product listing and then swipe through the images, you may see actual photos submitted by users from their reviews.

📃 Financial Markets stabilizing - Markets on Wall Street and in Asia are stabilizing Tuesday following a mini-panic caused by an assortment of factors that stretched from late last week through Monday. The S&P 500 and Nasdaq each rose 1.3% in morning trading and were on track to break a brutal three-day losing streak.

📈 U.S. stock index futures are higher early Tuesday after the ugliness on Monday that sent the S&P 500 SPX to its worst single-day performance in nearly two years. Over three sessions, the S&P 500 index lost 6%, the Nasdaq Composite slumped 8%, and the Russell 2000 dropped 10%.

That’s what fears of a U.S. recession as well as the Bank of Japan raising interest rates and smashing the yen carry trade can do. So the question now is whether the worst is behind the market.

Thomas Salopek, head of cross-asset strategy at JPMorgan, says the answer to that million-dollar question is no. He says the full ingredients for a market bottom are not in yet.

• S&P 500: $5,240(+1.03%)

  

📈 Mortgage rates have fallen today to the lowest level seen this year, due to a dropping yield on the 10-year Treasury bond. Investors are flocking to Treasurys after last week’s jobs report boosted concerns of a sluggish U.S. economy and a possible recession. The rate on a 30-year fixed-rate conventional mortgage directly correlates with the yield on the 10-year Treasury, so when the Treasury yield falls, so do mortgage rates.

• 30-year mortgage rate: 6.80%

• 15-year mortgage rate: 6.25%

📈 In the market’s eyes, the Fed finds itself either poised to head off recession or doomed to repeat the mistakes of its recent past.

• “No recession today, but one is increasingly inevitable by year-end if the Fed fails to act,” said Steve Blitz, chief U.S. economist at TS Lombard.

• Traders are pricing in a half-point September cut, followed by aggressive easing that could lop 2.25 percentage points off the Fed’s short-term borrowing rate by the end of next year.

📰 Here are some of the most prominent headlines this week:

• Google’s dominant search business is a monopoly, U.S. judge rules.

• Vice President Kamala Harris and her new running mate, Tim Walz, hold their first joint rally before going on a tour of battleground states this week

• Elon Musk's X has accused a group of major advertisers of antitrust violations in a new lawsuit claiming the group conspired to "boycott" advertising on the platform.

• Spark Generation - raising €600,000 to help businesses make impactful sustainability decisions. Founded by the experienced UiPath team members, that previously exited Kubeark.

• CO2Later - raising €600,000 to empower businesses to make impactful sustainability decisions. It has an experienced founding team coming from the UiPath mafia and successfully exited Kubeark, the largest pre-seed round in Romania.

• Maskots - raising €200,000 to expand its pet care app, helping pet owners keep their animals happy and healthy. 

Note: Got a round going that you want to feature - your own business or a portfolio company? Get in touch.

Now let’s have a look at the latest top Flippa offers

Established Lightsaber Collectibles Store - This ecommerce business features Star Wars collectibles including lightsabers and helmets.

• Monthly profit: $46,425

• Average order value: $272

• Business age: 4 years

Amazon Product Intelligence SaaS - This SaaS business is an online arbitrage and product comparison tool for Amazon sellers drawing in hundreds of monthly sign-ups.

• MRR: $4,728

• Active subscribers: 452

• Business age: 6 years

Business Productivity Slack App Portfolio - This business includes two Slack plugins meant for business productivity used by global clients including Intuit, Shopify, Uber, and Adobe.

• Monthly profit: $7,823

• Average monthly users: 657

• Business age: 6 years

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