Jobs 224K; Again The Fed Will Not Cut In July; iCloud And Insta Fail

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Includes: AAPL, AMZN, CRWD, CYBR, EXPE, FB, FSLY, FTCH, GOOG, GOOGL, MSFT, NEWR, NTNX, PINS, PLAN, REAL, RVLV, SFIX, SMAR, SPLK, SWI, VMW, WDAY, WORK, ZS
by: David H. Lerner
Summary

Jobs soar for June, labor force participation rate rises, and a surprising market.

As per my last missive, delay, delay, delay on the cut.

Apple iCloud and Instagram failed. No big deal? Wrong. Here comes the Multi-Cloud.

Two other emerging trends need more exploration: "Social Netization" for Enterprise Apps" and "The New eRetail"

Fed cut in July? Not so fast

Everyone and their uncle is certain that the cut will be in July. Yet, this morning, we have quite a spirited bounce in employment along with an uptick in the worker participation rate. The boomers are supposed to be retiring at a furious rate, yet more people are entering the workforce. Could it be that higher pay is keeping them in the workforce? Could it be that the underlying economy is stronger than what the economists are modeling? I say absolutely yes. With such a high expectation for cuts, Powell will jawbone the cut and drag it out. I talked about this in my piece yesterday (the bottom 2 paragraphs); check it out if you haven't already.

We now have cleared all the potential land mines until the Fed meeting at the end of this month. The market is down this morning as it contends with the idea that cuts in rates are not as assured as it had thought.

The case for the "Multi-Cloud" trend - iCloud, Apple Store and Instagram failure

This week we had two instances of cloud failure. Apple (NASDAQ:AAPL) is experiencing issues with most of its iCloud services today. Users are having trouble signing into iCloud and accessing their accounts, along with Photos, Mail, Backup, Calendar and also the physical stores are down. Also, not only Instagram but also WhatsApp and Facebook (NASDAQ:FB) experienced issues yesterday as well. Perhaps all of you are shrugging your shoulders "who cares", so you can't upload your pupper pics, no biggie, right? Well, what if it was Expedia (NASDAQ:EXPE) or maybe a bank running "letters of credit" applications, or Workday (NASDAQ:WDAY) running HR for hundreds of large enterprises? We are talking disaster for these providers and losses in the tens of millions, or losing customers in a big failure could even be existential. This is why I believe there will be a new trend in technology for what I am calling the Multi-Cloud.

Actually, it is already here, and I am just putting a name on it. The stock market hasn't yet recognized it as a narrative. This gives us a chance to create alpha because bet-your-bottom-dollar market participants will gloom onto this trend as it gains currency. I am just giving you a heads-up so you can be ready to take advantage. So why am I associating "Multi-Cloud" with these two current items? I have been talking about Multi-Cloud for a few weeks; it is the idea that large enterprises are working with multiple cloud providers. For the most part, far-flung divisions are choosing different providers based on their strengths. Microsoft (NASDAQ:MSFT) gets a lot of current corporate customers to use Azure because its tech people are already proficient in the apps running on it.

Amazon (NASDAQ:AMZN) gets a lot of customers to AWS because it is the lowest cost provider, the first mover, and it offers a lot of tools and systems resources. Google Cloud (NASDAQ:GOOG) (NASDAQ:GOOGL) is known for its very strong AI. This is one aspect of the Multi-Cloud, but that is just the first step. The ability to leverage multiple clouds in a way that confers fail-safe and fail-over capability is a "Killer App". Enterprises will value it because they must operate 24/7 come hell or high-water. Also, many enterprises have already or are embracing the Hybrid cloud, where they have an enterprise private cloud in their own datacenter and then seamlessly connect to the public cloud that is a multi-cloud by definition. I believe that Google Cloud will claim the "Multi-Cloud" mantel in order to compete with Azure and AWS. When the company announced its acquisition of Looker, it made the point that it will support all clouds with it.

We see other cloud hookups like Oracle (NYSE:ORCL) making their eponymous database with their new AI-driven administrator automation available with a connection to Azure as another form of Multi-Cloud. To make this Multi-Cloud capability possible, it creates demand for tools and techniques to make interoperability, and most importantly efficient management raises a whole cohort of participants. To me this is a huge justification for the existence of a company like Nutanix (NASDAQ:NTNX), but also Fastly (NYSE:FSLY), VMware (NYSE:VMW), but also Splunk (NASDAQ:SPLK), or SolarWinds (NYSE:SWI) or even a New Relic (NYSE:NEWR) and cloud security names like CrowdStrike (NASDAQ:CRWD), Zscaler (NASDAQ:ZS), or CyberArk (NASDAQ:CYBR).

I am not making any buy recommendations here. I am trying to compile a list for you so you understand the dimensions of this soon-to-emerge trend. Trying to create and anticipate trends is the way to get ahead of the herd and generate wealth.

I will write more about this trend and the other two trends that I have recently identified: The "Social-Netization" of enterprise applications like Anaplan (NYSE:PLAN), Smartsheet (NYSE:SMAR) and Slack (NYSE:WORK), etc. And the new e-Retailer trend like Stitch Fix (NASDAQ:SFIX), Farfetch (NYSE:FTCH), Revolve Group (NYSE:RVLV), Pinterest (NYSE:PINS), and RealReal (NASDAQ:REAL). I will attempt to define these trends and their impact in the marketplace in the coming weeks. Again, these are not buy recommendations. In fact, for example, I really am not so sure about REAL and whether it can scale. They all do bear some deeper study. Do you have suggestions for these categories? Are you skeptical of their gaining currency? Leave your thoughts and suggestions in the comment area. Civil comments will get civil answers.

Have a great weekend.