CEO DailyCFO DailyBroadsheetData SheetTerm Sheet

$174 billion wipeout: Amazon and Apple sink in brutal overnight sell-off

October 29, 2021, 9:52 AM UTC

Happy Friday, Bull Sheeters.

Buckle up. Tech futures are under pressure following a one-two punch of earnings misses delivered by Amazon and Apple after the bell yesterday evening. The S&P 500 still looks set to end the week in the green, but it’s very likely the winning streak will come to an end today.

The Apple-Amazon downside surprise is also taking a toll on global stocks. On cue, the markets in Europe and Asia are down as well, with tech stocks dragging down the lot.

Crypto bulls though should be happy. Wonder-joke-coin Shiba Inu has come back to Earth some in the past few hours, but the trading mania has spread to other coins, particularly Ether, Dogecoin and, yes, Bitcoin.

Let’s see what else is moving markets as we close out the trading week.

Markets update

Asia

  • The major Asian exchanges are mixed as we close out the the week, with the Shanghai Composite up 0.8% in afternoon trading.
  • Another indicator of China economic weakness comes to us courtesy of Starbucks. On an earnings call yesterday, the coffee chain reported its China “comparable store sales”—a closely watched metric—fell 7%. Shares were off more than 4% in pre-market as China is a key market for SBUX.

Europe

  • The European bourses are a swoosh of red with the Stoxx Europe 600 lower by 0.4% in the second hour of the session.
  • In IPO news, Volvo shares started trading in Stockholm this morning. The offering was oversubscribed, sending shares a tad higher, +0.1%, at the open. Not much, but it’s outperforming the broader markets.
  • Staying with autos… Daimler delivered a big bottom-line beat, but that’s not enough for investors. Shares were off 1% out of the gates.

U.S.

  • U.S. futures are solidly in the red, pulled lower by tech. That’s after the Nasdaq and S&P 500 notched new all-time highs on Thursday.
  • Shares in Amazon are in trouble this morning, down 4% in pre-market trading. The e-commerce king delivered a rare miss and gave a lousy outlook as supply-chain issues continue to rankle its business.
  • Speaking of supply-chain mess… Apple, another elder statesman of the FAANG quintumvirate (erm, MAANG?), is also reeling this morning, off 3.5% in pre-market. The issue? Yep, disappointing Q3 results and supply uncertainties for the upcoming Christmas period.

Elsewhere

  • Gold is down, trading below $1,800, capping another flat week for the shiny yellow stuff.
  • The dollar is gaining—a warning sign for equities?
  • Crude is flat with Brent trading above $84/barrel.
  • Crypto is cruising again. Bitcoin sits above $61,000. The king of crypto is up nearly 4% in the past 24 hours, but is down on the week. Ethereum’s Ether, however, has soared into record territory.

***

By the numbers

$174 billion

Watch the Nasdaq at the open. Heck, watch the FAANG+ Index, too. Tech bulls just saw the rarest of rare events yesterday: disappointing results from the kings of Big Tech. I cannot recall the last time Amazon or Apple reported such big misses. And they did so on the same day. The result: investors have wiped, by my calculation, roughly $174 billion off their combined market caps overnight. The core issue for both companies should come as no surprise to investors. All manner of companies—particularly those in the “stuff business,” as my colleague Claire Zillman calls them—have been warning of supply-chain snarls since well before earnings season started. And the problem is particularly acute on transPacific routes (not great for Apple), the European shipping giant Kuehne+Nagel, for one, warned last week. When will it clear up? The consensus is not until Q1 or even Q2, 2022. You might want to think about ordering that Christmas present for your favorite markets correspondent ASAP.

$41 billion

What’s better than one dog-faced joke of an alt coin? The answer: two dog-faced gag coins? Move over Dogecoin. We now have Shiba Inu. It trades at a fraction of a fraction of a penny, but crypto bulls have pushed its market cap to more than $41 billion, making it more valuable than the following companies that actually make things, and employ people and have been earning profits for years: Allstate, General Mills, Nasdaq, Best Buy, Kroger and Southwest Airlines … As my colleague Chris Morris points out, the run on Shiba Inu is lifting Dogecoin, too. Maybe we should put our collective efforts into creating a Scilla coin. My one condition: it would have to be non-polluting, and a healthy sliver of proceeds would go to a worthy charity.

€2 million

With helicopters swooping overhead and last-minute announcements of road- and school-closures coming over the transom yesterday, I decided to collect the family and leave Rome ahead of the big G20 summit this weekend. We’re up north in calm little Umbria. I love this time of year. The leaves are changing colors and everyone’s talking about truffles. White truffles, to be exact. I reported last week that the truffle brokers near Amandola are asking astronomical prices for these subterranean wonders this year. Supply is that stretched. Corriere della Sera reports that a tiny find, weighing no more than seven centigrams (that’s barely enough for a single plate of tagliatelle), fetched at auction in the tiny marchigiano town of Pergola a winning bid of €140 last week. That little wonder set a price record. On a per-kilogram basis, it would be more than €2 million ($2.3 million). If you’re looking for me this weekend, I’ll be out in the woods. With my truffle dog. No joke.

***

Have a lovely weekend. But first, there’s more news below.

***

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.

Today's reads

With Facebook’s name change to Meta, the tech giants go from FAANG to MAANGFortune

Fresh out of bankruptcy, Hertz is suddenly key to Tesla’s growth plansFortune

On 2021’s 100 Fastest-Growing Companies list, finance outpaces tech with one-third of the winnersFortune

Bull Sheet readers, we have a special offer: 50% off your subscription to Fortune. Just click here, and use the promo code: BULLSHEET . . . Thank you for supporting our journalism.

Market candy

1.5%

What do you think of Facebook's name-change? Is Meta Platforms winning you over? Or, are you feeling kinda Meh-ta about it? Investors seem to like it. The shares jumped 1.5% yesterday on the news, outperforming the Nasdaq. That's even as the imposing FAANG Fab 5 transform into MAANG. MAANG?

This is the web version of Bull Sheet, a no-nonsense daily newsletter on what’s happening in the markets. Sign up to get it delivered free to your inbox.