Summary of "The Wall Street Skinny" Episode 136: AAPL Downside, $Trump Coin, and Credit Portfolio Trading

Release Date: January 25, 2025
Hosts: Kristen and Jen

In Episode 136 of The Wall Street Skinny, hosts Kristen and Jen navigate through a multifaceted discussion covering Apple’s recent financial challenges, the controversial emergence of Trump Coin, and the evolving landscape of credit portfolio trading. This episode blends personal anecdotes with in-depth financial analysis, providing listeners with both relatable stories and professional insights.

Apple’s Downward Revision of Earnings Estimates

The episode kicks off with a deep dive into Apple Inc.’s recent financial turbulence. Jen highlights that Apple has been "unseated basically as the world's largest tech company and it's having a little suboptimal run here" (02:27). The hosts explain that multiple analysts have revised Apple’s earnings guidance downward due to "lackluster sales of new iPhones and a lukewarm response to the rollout of the Apple AI" (02:27).

Personal Impact of Apple’s Market Performance

Kristen shares her personal experience with upgrading her iPhone, emphasizing practical challenges over excitement for new features. She recounts, “I wasn’t super excited to do it... It sounds like I didn’t really need to do the upgrade” (05:04). This anecdote underscores how even avid users can be disillusioned by Apple's recent performance.

Jen adds to the narrative by discussing the broader implications for Apple’s user base. "Cap Cut is also owned by ByteDance. So when TikTok went down, yeah, Cap Cut went down" (08:17), tying Apple’s performance to the disruptions in related services that impact daily users.

The TikTok Ban and Its Impact on CapCut

A significant portion of the episode is dedicated to the repercussions of the Supreme Court’s upholding of the TikTok ban. Kristen describes the chaos among content creators: “For those of you who are not content creators, TikTok, frankly, take it or leave it. Cap Cut, which is owned by ByteDance, is the go-to editing software” (08:17). The ban not only affects TikTok’s functionality but also disrupts associated platforms like CapCut, essential for video editing and content creation.

Challenges Faced by Users

Kristen expresses her frustration with losing access to CapCut: “I cannot have this new phone if I can't get Cap Cut” (09:09). She highlights the dependency on these tools for maintaining a social media presence, especially for influencers and content creators who rely on seamless app functionality for their work.

Jen expands on the technical difficulties, noting the complications in transferring apps and data due to the ban: “You have to re-download it... I’m not buying it” (07:43). This situation exemplifies how regulatory decisions can have immediate and tangible impacts on both individual users and broader tech ecosystems.

Trump Coin and Trumponomics

The conversation shifts to the intriguing topic of Trump Coin and its implications in the cryptocurrency landscape. Jen introduces the concept of meme coins and their saturation in the market: “It just is part of ubiquitous culture that we live in” (17:12).

Market Volatility and Legitimacy Concerns

Kristen critiques the legitimacy of Trump Coin, describing it as “a shit coin” (23:13). They discuss the swift rise and fall in market caps, with Trump Coin fluctuating between $6 to $15 billion before experiencing a significant crash (18:17). The hosts express concerns over the regulatory framework and ethical implications, questioning the legalities and potential for market manipulation.

Notable Quote:
Jen: “This is a meme coin. This is not... It's a shit coin.” (23:13)

Ethical and Legal Implications

Kristen delves into the ethical dilemmas posed by politicians engaging in cryptocurrency ventures: “It feels like this should be illegal... It’s about supporting building this community of people and blah, blah, blah” (21:57). The discussion highlights the perceived conflict of interest and the potential for misuse of political power in financial markets.

Impact on the Dollar and Tariffs

The hosts then explore the broader economic policies under Trump, particularly focusing on tariffs and their impact on the strength of the dollar. They observe that Trump’s initial strong rhetoric on tariffs led to a temporary boost in the dollar’s strength, but recent policy shifts suggest a cooling off: “the initial strength in the dollar that we saw... feels like that trade may have peaked a little bit” (29:35).

Real Market Effects

Jen notes that Trump’s tough talk on tariffs is beginning to affect real markets, moving beyond mere rhetoric to tangible economic outcomes. This shift highlights the dynamic interplay between political rhetoric and market performance.

Trends in Credit Portfolio Trading

The episode culminates with an analysis of emerging trends in credit portfolio trading. Kristen and Jen discuss how the rise of ETFs and increased demand for credit exposure have led to a record surge in portfolio trades within the corporate bond market: “Bloomberg said... it was something like 9% of the total corporate bond market last year” (28:49).

Electronic Trading and Commoditization

They explain that electronic submissions are streamlining the trading of bond baskets, resulting in compressed bid-ask spreads and greater efficiency: “the more you do that, you're submitting electronically, so you're getting bids from a whole number of dealers across the street” (28:49). This shift emphasizes the increasing reliance on technology in financial transactions and its implications for career paths within the industry.

Notable Quote:
Jen: “With the explosion in these portfolio trading things, that may be something to think about as you consider a credit trading desk.” (33:53)

Career Implications

The discussion highlights how the move towards electronic trading may influence the skillsets required for credit trading roles. Kristen notes the potential for roles to become more commoditized as electronification progresses, urging listeners to stay adaptable and informed about these shifts.

Conclusion

Kristen and Jen wrap up the episode by reinforcing the importance of staying informed about market trends and regulatory changes. They recommend additional resources, such as industry podcasts, to help listeners deepen their understanding of complex financial topics. The hosts emphasize their mission to make Wall Street accessible and relatable, blending professional insights with personal experiences to educate and engage their audience.

This episode of The Wall Street Skinny provides a comprehensive overview of significant developments in the tech and finance sectors, blending analytical discussions with personal anecdotes to create an engaging and informative listening experience.