The Compound
The Stock Market Booms While No One Can Get a Job | WAYT?
10/21/2025, 10:20:03 PM
Economic Summary
- Private credit shows many classic bubble characteristics — rapid product innovation, expansion of availability, lower credit standards, and fee amplification — implying heightened systemic risk if liquidity or underwriting deteriorates.
- U.S. labor market is healthy by headline unemployment, but deteriorating for segments: long-term unemployment is rising and seasonal job seekers now outnumber postings, suggesting hiring softness at the margin.
- The Fed may have to move faster to ease policy if job-market data weakens materially, because localized deterioration could force earlier rate cuts than currently expected.
- Consumer stress measures remain muted: Bank of America consumer net charge-offs have fallen, signaling limited immediate consumer credit distress despite other worries.
Bullish
- Netflix: strong content, record TV share, ad growth runway into 2025.
- Apple: high margins, sticky ecosystem, growing services profitability.
- Paramount/Studios: valuable IP and libraries that drive long-term monetization.
Bearish
- Algorithmic selling drove a knee-jerk drop on a one-time Netflix Brazil tax payment headline.
- Warner Bros. Discovery carries heavy debt ($30–40B), complicating sale and risking value destruction.
- Private credit shows multiple bubble signals: new products, easing standards, perverse incentives, and low default volatility.
- Labor market deterioration for certain cohorts could force quicker Fed action and higher unemployment risks.
Bullish tickers
NFLXAAPLPARASPOT
Bearish tickers
NFLXWBDACNBX
NFLX
Bullish
Record share of TV time, growing ad business, live events (NFL), and major content hits support continued growth.
Bearish
After-hours selloff tied to a disclosed one-time $619M Brazil tax settlement and algorithmic overreaction.
AAPL
Bullish
Viewed as a high-margin consumer staple with locked-in users, strong services margins, and consistent buybacks.
Bearish
High valuation multiples (~30–40x) could concern growth-focused investors despite margin strength.
WBD
Bullish
Valuable IP, HBO franchise, and an immense content library present long-term monetization and M&A appeal.
Bearish
Large remaining debt burden (~$30–40B) and politically toxic assets (news) complicate sale and restructuring.
PARA
Bullish
Likely strategic buyer for studio assets; benefits from content libraries and scale if acquisition occurs.
Bearish
Media consolidation risks and integration costs if pursuing large deals.
SPOT
Bullish
Video podcast distribution and existing audio footprint help capture creator and audience monetization.
Bearish
Competition for video/podcast distribution could pressure margins and platform dynamics.
AMC
Bullish
Occasional theatrical collaborations for breakout titles can boost box office and relevance.
Bearish
Exhibitor economics challenged by day-and-date streaming releases; historically volatile investor base.
ACN
Bullish
Demand for AI upskilling and transformation projects could support long-term consulting revenue.
Bearish
Recent rounds of layoffs (tens of thousands) highlight exposure to AI-driven restructuring risk.
BX
Bullish
Stepped in to fill lending void left by banks; benefits from fee-bearing alternative credit demand.
Bearish
Private credit/alternative asset managers face reputational and credit risks if private markets deteriorate.
COST
Bullish
Membership model and sticky customer behavior justify premium multiples and stable earnings.
Bearish
Premium valuation partly priced for consistency rather than growth; downside if consumer loyalty weakens.
WMT
Bullish
Scale and defensive retail positioning support resilience and steady cash flows.
Bearish
High valuation relative to growth expectations could be challenged in a slowing consumer backdrop.
BRK-B
Bullish
Large long-term holder of Apple produced massive returns; durable investment track record.
Bearish
Opportunity cost of capital and occasional missed longer-term gains referenced in discussion.
GOOG
Bullish
YouTube’s ubiquity on TVs and ad dominance underpin continued monetization strength.
Bearish
YouTube competition ramp-up increases content and distribution costs over time.
META
Bullish
Strong ad platform and user base offer durable monetization.
Bearish
High competition for user attention and ad dollars could constrain near-term growth.
MSFT
Bullish
Enterprise software position and cloud strength provide resilient revenue streams.
Bearish
High expectations priced in may limit upside in short term.
AMZN
Bullish
Prime distribution and video bidding (e.g., sports rights) strengthen ecosystem and engagement.
Bearish
Large content and distribution investments can pressure margins.
BAC
Bullish
Consumer net charge-off improvements suggest limited near-term consumer credit stress.
Bearish
Broader bank pullback from midsize lending created gaps that increased private credit activity.
People mentioned
NicoleJCCliffChris HayesJohn TognacciJoe FahmyMatt BellanyLucas ShawPatrick O'ShaughnessyBill SimmonsCanelo AlvarezDavid ZaslavAdam SilverRob PassarellaBarry RitholtzShinali BasakSteve MandelMarc AndreessenLarry EllisonShari RedstoneBari WeissHoward MarksSundar PichaiJon StewartJoshMichael