Morning News: October 19, 2021
Posted by Eddy Elfenbein on October 19th, 2021 at 7:03 am

World Faces Fiscal Problems Much Worse Than Those From Covid, OECD Warns

China’s Coal Rally Slows as Authorities Act to Tame Price

How Villagers in China’s Silicon Valley Built a $30 Billion Fortune

HSBC, Citigroup Rush In to Catch China Cross-Border Wealth

Bitcoin Pushes Toward Record Before Debut of Futures-Based ETF

Treasury Warns That Digital Currencies Could Weaken U.S. Sanctions

The S.E.C. Weighs In on Meme-Stock Mania

Halliburton Posts Q3 Profit As Higher Oil Prices Fuel Drilling Demand

J&J Raises 2021 Profit View, Keeps Vaccine Sales Outlook Unchanged

Procter & Gamble to Raise Prices on More Staples as Supply Problems Hit

As Starbucks Workers Seek a Union, Company Officials Converge on Stores

App Deal Highlights a Push to Lure Workers Back Into Offices

What’s Your Pleasure? How About a T-shirt?

Disney Stock Downgraded for First Time in 3 Years Amid Streaming Worries

Nuclear Fusion Edges Toward the Mainstream

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Industrial Production Unexpectedly Drops
Posted by Eddy Elfenbein on October 18th, 2021 at 12:50 pm

The S&P 500 is a little bit higher today although the Dow is barely lower. On our Buy List, Intercontinental Exchange (ICE) is up to a new 52-week high. ICE is a 13% winner for us this year.

This morning’s report in industrial production showed a sharp drop for September. Output dropped by 1.3%. That’s the biggest fall since February. Wall Street had been expecting a gain of 0.2%. Once again, the problem is supply-chain disruptions. The number for August was revised downward to a loss of 0.1% from a gain of 0.4%.

From the Wall Street Journal:

Manufacturing output, the biggest component of industrial production, fell 0.7% in September compared with August. Motor vehicle and parts production decreased 7.2% amid the shortage of semiconductors.

The lingering effects of Hurricane Ida also contributed to the drop in manufacturing, by 0.3 percentage point, the Fed said.

Despite the bad number for September, industrial production has recovered nicely in the last year. Compared with a year ago, industrial production is up 4.6%.

Morning News: October 18, 2021
Posted by Eddy Elfenbein on October 18th, 2021 at 7:01 am

China’s Economy Stumbles on Power Crunch, Property Woes

Oil Prices Climb as Covid Recovery, Power Generators Stoke Demand

Central Banks and Governments in Eastern Europe at Odds Amid Inflation

Italy Faces Capital Demand of More than $8 Billion to Offload Monte dei Paschi

Biden’s Plans Raise Questions About What U.S. Can Afford Not to Do

Fed Staff Says Wall Street Is Getting Inflation Call All Wrong

Bitcoin Comes to the Big Board

Big Labor and the Supply Shortage

The 60/40 Portfolio Isn’t Dead, Just More Expensive

Barclays Trading Boss Saw the $6 Billion London Whale Coming

Goldman Sachs Wins Approval to Buy Out Its Partner in China

Zillow Tumbles After It Stops Buying New Homes

Toyota to Invest $3.4 Billion on U.S. Automotive Batteries Through 2030

Google CEO Pichai Opens Up on Its Biggest Moonshot Yet

Instagram Struggles With Fears of Losing Its ‘Pipeline’: Young Users

Roblox, the Gaming Site, Wants to Grow Up Without Sacrificing Child Safety

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In the Compound & Friends
Posted by Eddy Elfenbein on October 15th, 2021 at 1:13 pm

I was invited by Josh Brown and Michael Batnick of Ritholtz Wealth Management to be a guest on their first-rate podcast, The Compound & Friends. I’ve been friends and an admirer of them for many years. Blair duQuesnay, one of my favorite bloggers/writers, also of Ritholtz, was another guest.

(During the podcast, I mangled my explanation of Miller Industries. Here’s a better explanation.)

Morning News: October 15, 2021
Posted by Eddy Elfenbein on October 15th, 2021 at 7:01 am

UK Says Billions Already Raised for “Green Revolution” Ahead of Investment Summit

Shareholder Democracy Is Getting Bigger Trial Runs

China Breaks Silence on Evergrande, Saying Risks ‘Controllable’

Bitcoin Futures Frenzy Erupts as Day Traders Pile Into ETF Bets

Brent Oil Hits $85 as Energy Crisis Stokes Demand Before Winter

Rising Rents Are Fueling Inflation, Posing Trouble for the Fed

Why Does Everyone Suddenly Care About Supply Chains?

U.S. Banks See Wealth Management Boom on Borrowing, New Assets

China Is Forcing Fashion to Mute Itself Over Dirty Cotton

Chinese Electric Cars Engulf Western Europe’s Top Oil Producer

Microsoft Shuts LinkedIn China, Citing ‘Challenging’ Climate

Plant-Based Food Companies Face Critics: Environmental Advocates

Meet Me in My Office, in Men’s Underwear on 5

Review: In ‘The Lehman Trilogy,’ a Vivid Tale of Profit and Pain

5 Reasons Not to Quit Your Job (Yet)

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Jobless Claims Fall Below 300,000
Posted by Eddy Elfenbein on October 14th, 2021 at 12:30 pm

I’m on the road today but I wanted to give you a quick update on the markets. This morning’s jobless claims came in at 293,000. That’s a new pandemic low. That’s also the first time we’ve broken below 300,000 in 20 months. Wall Street had been expecting 318,000.

The drop in claims comes at an important time for the labor market, which has added jobs over the past two months at a decidedly slower-than-expected pace – 366,000 in August and 194,000 in September, leaving the household employment total still more than 5 million shy of where it was pre-pandemic.

Thursday’s jobless claims report covered the period just before the Labor Department’s survey week for the closely watched nonfarm payrolls report.

Federal Reserve officials have been watching the job market’s progress closely as the central bank weighs when to begin pulling back on the extraordinary help it’s been providing. Minutes released Wednesday from the Fed’s September meeting indicated that the first pullback could start as early as mid-November with a reduction in the amount of bonds it buys each month.

We’re also getting the first earnings reports this week. Usually, the big banks go first. Bank of America (BAC), Wells Fargo (WFC), Citigroup (C) and Morgan Stanley (MS) reported earnings and all beat expectations.

Morgan Stanley earned $1.98 per share which beat by 30 cents per share. Wells Fargo made $1.17 which topped expectations of $1 per share. Bank of America made 85 cents per share versus a 71-cent estimate. Citigroup made $2.15 per share which beat by 50 cents.

Morning News: October 14, 2021
Posted by Eddy Elfenbein on October 14th, 2021 at 7:03 am

Global Gas Crisis Spilling Over Into Oil Markets, IEA Says

Putin Suggests Germany Approve Nord Stream 2 to Solve Energy Crisis

China’s Record Factory Inflation Poses Another Threat to Supply Chains

East Asia Crypto Transactions Plunged Amid China Crackdown

Consumer Prices Jump Again, Presenting a Dilemma for Washington

Social Security Benefits to Rise 5.9% in 2022, Most in Four Decades

Biden Administration Plans Wind Farms Along Nearly the Entire U.S. Coastline

Rich Countries Must Bear the Cost if We Can Ever Hope to Achieve a Net-Zero World

Fed’s Embarrassing Ethics Scandal Spurs Calls for More Oversight

Reports of the Death of 60/40 Funds Are Greatly Exaggerated

TSMC Announces Chip Plant in Japan, Flags ‘Tight’ Capacity Throughout 2022

Bank of America Tops Estimates on Reserve Release, Strong Advisory and Asset Management Results

Domino’s Pizza Posts Surprise Fall in U.S. Same-Store Sales as Demand Slows

Walgreens Profit Surges 68% on Strong Pharmacy, Retail Sales

The Shorter Work Week Really Worked in Iceland. Here’s How

How a $2 Million Luxury Condo in Brooklyn Ends Up With a $157 Tax Bill

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This Morning’s CPI Report
Posted by Eddy Elfenbein on October 13th, 2021 at 12:10 pm

The CPI report came out this morning and there’s still evidence of inflationary pressures. For September, consumer prices rose by 0.41%. Wall Street had been expecting 0.3%. Year-over-year, inflation is up 5.38%.

The big culprit is energy prices. Take the core rate, which excludes food and energy, and inflation rose by just 0.24% last month.

Gasoline prices rose another 1.2% for the month, bringing the annual increase to 42.1%. Fuel oil shot up 3.9%, for a 42.6% year over year surge.

Food prices also showed notable gains for the month, with food at home rising 1.2%. Meat prices rose 3.3% just in September and increased 12.6% year over year.

“Food and energy are more variable, but that’s where the problem is,” said Bob Doll, chief investment officer at Crossmark Global Investments. “Hopefully, we start solving our supply shortage problem. But when the dust settles, inflation is not going back to zero to 2 [percent] where it was for the last decade.”

Interestingly, used car prices, which had been a major problem earlier, saw their prices fall 0.7% in September. Airlines’ prices fell 6.4% in September. That’s after falling 9.1% in August.

Morning News: October 13, 2021
Posted by Eddy Elfenbein on October 13th, 2021 at 7:02 am

World’s Growth Cools and the Rich-Poor Divide Widens

China’s Power Problems Expose a Strategic Weakness

Peak Oil Is Coming. That Won’t Save The World

U.S. Will Reopen Land Borders With Canada and Mexico for Vaccinated Travelers

Consumer Prices Are Still Rising Fast, and A Problem for Washington and Wall Street

Apple Finally Falls Victim to Never-Ending Supply Chain Crisis

Biden, Battling Supply Chain Woes, to Announce Port Will Operate 24/7

A Stock Market Malaise With the Shadow of ’70s-Style Stagflation

Inflation Revival Is a Victory, Not a Defeat, for Central Banks

Seeding Accounts for Kindergartners and Hoping to Grow College Graduates

Ping An’s $90 Billion Fall Grounds One-Time China High Flyer

Jane Fraser Has a Plan to Remake Citigroup While Tormenting Rivals

Michael Burry of ‘Big Short’ Fame Posts Twitter Rant Over Taxing the Rich

Netflix Says ‘Squid Game’ Is Its Biggest Series Launch Ever

Delta Air Warns of Pre-Tax Loss in Fourth Quarter As Fuel Prices Surge

JPMorgan Smashes Profit Estimates on M&A Boom, Wealth Management Strength

FDA Has Authorized e-Cigarettes for the First Time, Citing Benefits for Smokers

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Trex Downgraded
Posted by Eddy Elfenbein on October 12th, 2021 at 1:28 pm

Shares of Trex (TREX) are down sharply today. Timothy Wojs, an analyst at Robert W. Baird, lowered Trex from Outperform to Neutral. He also lowered his target price to $108 per share. The downgrade was due to supply issues. Trex has been down as much as 9% today.

Trex hasn’t said when it will report earnings, but going by previous years, the report will probably be out in early November. Wall Street expects earnings of 58 cents per share.