Morning News: July 30, 2024
Posted by Eddy Elfenbein on July 30th, 2024 at 7:03 am

Venezuela’s Opposition Says It Has Proof of Election Fraud

Japanese Businesses Are Taking Price-Raising Lessons to Survive

Understanding Nigeria’s Currency Slump, and What Happens Next

Eurozone Economy Keeps Pace Despite German Weakness

Carbon Credits Found to Be Mostly ‘Ineffective’ in Key Study

How the US Power Grid Became a Mess—Just When We Need It Most

The Port of Los Angeles Has a Power Problem

Risky Bet on US Office Buildings Becomes Debacle for South Korea

U.S. National Debt Tops $35 Trillion for First Time

Time or Money? What’s a Better Investment as Election Heats Up

Here’s Where Labor-Hungry Nations Are Easing Visa Rules

Is the Labor Market About to Crack? It’s the Key Question for the Fed.

The Last American Antislavery Campaign

History Favors Stock and Bond Bulls Alike When the FOMC Meets

Buffett Cuts BofA Stake, Unloading $3 Billion This Month

Microsoft Needs to Show Azure Strength to Stem Great Rotation

This $25 Billion Private Equity Target Is a Puzzle

Luxury Heir Alleges His $13 Billion Hermès Fortune Has Vanished

How One Man Lost $740,000 to Scammers Targeting His Retirement Savings

SoFi Boosts Its 2024 Profit Forecast for a Second Time

Amazon Pushes Fast Delivery Into Rural Areas in Challenge to Post Office

Pfizer Lifts Outlook as Company Seeks to Rebuild Post-Covid

Ozempic’s Biggest Side Effect: Turning Denmark Into A ‘Pharmastate’?

BP Profit Beats Market Views Despite Weaker Refining Margins

Japan Built Thailand’s Car Industry. Now China Is Gunning for It.

Chinese E.V. Makers Rush in and Upend a Country’s Entire Auto Market

Tesla to Recall More Than 1.8 Million Vehicles Due to Hood Issue

Olympic Fever Drives Surge of Chinese, Japanese Fans in Paris

Will Free Beer Make Travelers More Responsible?

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Morning News: July 29, 2024
Posted by Eddy Elfenbein on July 29th, 2024 at 7:06 am

Putin, Kim and the $4 Trillion Threat on Cold War’s Last Frontier

Pakistan Cuts Rates as Policymakers Try to Revive Economy

Fitch Upgrades Pakistan Credit Rating on Better External Funding

Japan Wanted Higher Inflation. It’s Here, and It Hurts.

Why Global Investors Are Watching What Japan Does Next

Traders Fret as 32-Hour Central Bank Spree Hangs Over Market

Trump Became Crypto Believer After Falling in Love With NFTs of Himself

A Digital Coin Based on Baby Trump? Yup.

Business Is Buzzing Again for the Meme Makers of the Left

Big Business Signals to Fed It’s Either Rate Cuts or Job Cuts

A Fed Rate Cut Is Finally Within View

Ackman’s Wait for His Long-Awaited Fund Offering

Amazon Paid Almost $1 Billion for Twitch in 2014. It’s Still Losing Money.

Loews Profit Rises on Strong Premiums and Investment Income; Names New CEO

Pearson’s New CEO Promises Cost Savings After Restructuring

ArcLight to Invest $500 Million in Wind and Solar to Meet AI Demand

Germans Combat Climate Change From Their Balconies

The Rush to Shore Up the Power Grid Against Hurricanes, Heat and Hail

Jet Engines Are Breaking Down. Their Manufacturers Are Raking In Cash.

GSK, Flagship Enter Multibillion-Dollar Drug Discovery Deal

Philips’ Earnings Beat Forecasts as Orders Recover

F.D.A. Approves Blood Test for Colon Cancer Detection

McDonald’s Sales Fall for First Time Since 2020 as Traffic Drops

Heineken Sinks After China Impairment Hits Earnings

Zyns, Vapes and the Very Weird Market for New Nicotine Products

Kang Pledges $50 Million So Female Athletes Aren’t Trained as ‘Small Men’

‘Deadpool & Wolverine’ Reverses Marvel’s Box Office Slump

Hollywood’s Message to Red States: Our Movies Are for You

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Morning News: July 26, 2024
Posted by Eddy Elfenbein on July 26th, 2024 at 7:02 am

Farming Is Hip in Brazil, Where a New Generation Is Outpacing the US

Why US LNG Is Attracting Foreign Investment

Putin’s Latest Problem Is Runaway Inflation

Russia Opts for Big Rate Hike After Inflation Thwarts Easing

China Weighs Tenfold Fee Increase on High-Frequency Traders

Fed Seen Signaling September Rate Cut at Next Week’s Meeting

Where to Invest in Our Brave New Multipolar World

Eight Things Republicans Get Wrong About Free Trade

Let the Pros Play With the ‘Trump (or Harris) Trade’

Singapore’s Aspiring Bankers Skip Class to ‘Stack’ Internships

U.S. Accuses Prominent Short Seller Andrew Left of Fraud

Harvard’s $465 Million in Tax Benefits Draw New Scrutiny

Billionaires in Korea Face Relief From One of World’s Highest Death Taxes

Florida Housing Market Faces ‘Nightmare Scenarios’ as Deals Collapse

Apple’s iPhone Drops From China Top Five as Local Foes Rise

TikTok Goes All-Out in Washington With Its US Survival at Stake

Rupert Murdoch’s Game of Thrones

Cold-Storage Giant Lineage Raises $4.4 Billion in IPO

Eisai, Biogen Alzheimer’s Drug Denied by European Regulators

BASF Backs Guidance After Cost-Cutting Offsets Revenue Hit From Lower Prices

McDonald’s $5 Value Meal Is Slowly Bringing Diners Back

American Airlines’ Attempt to Strong-Arm Its Customers Into Buying Tickets Directly Backfired, Sending Its Profits Down Nearly 50%

U.S. Automakers Had a Punishing Week — with a Silver Lining for Shoppers

Mercedes-Benz Lowers Margin Goal for Cars Division After Earnings Drop

Ferrari Narrowly Dodges Deepfake Scam Simulating Deal-Hungry CEO

International Game Technology, Everi Scrap Earlier Tie-Up Plans for $6.3B Deal With Apollo

Hollywood Actors to Go on Strike Against Video Game Companies

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Morning News: July 25, 2024
Posted by Eddy Elfenbein on July 25th, 2024 at 7:07 am

With $150 Billion in Default, Maduro Needs Sanctions Relief Fast

Macron Seeks to Reassure CEOs on France at Pre-Olympics Lunch

German Business Sentiment Darkens as Clouds Continue to Gather

China Unexpectedly Cuts One-Year Policy Rate by Most Since 2020

Land of the Rising Banks

Yen Surges as Traders Bet the Big Turning Point Is Finally Near

Yen’s Sudden Gain Sparks ‘Widespread Liquidation’ Across Markets

Banks Borrow Over £30 Billion From BOE Repo Amid Liquidity Shift

Revenge Spending Zapped by Consumers Tapped Out on High Prices

An Increase in Uninsured Drivers Is Pushing Up Costs for Everyone Else

Stocks Extend Losses as Worries Go Beyond AI Froth

NYCB’s Flagstar to Sell Mortgage-Servicing Unit for $1.4 Billion

The Illicit Flow of Technology to Russia Goes Through This Hong Kong Address

Microsoft’s World of Warcraft Workers Vote to Unionize

Medicaid Was a Boon to Insurers During the Pandemic. Now, Not So Much.

Halting the Bird Flu Outbreak in Cows May Require Thinking Beyond Milk

AbbVie Sees Higher Profits as New Drugs Offset Humira Decline

How Government Programs Help Fuel Tesla Profit

Stellantis Earnings Nearly Halved, Leading Car Industry Slump

Hyundai Motor Profit Jumped 25%, Led by U.S. Demand

American Air Cuts Profit Outlook as Fare Sales Hurt Carriers

Southwest Airlines Is Ditching Open Seating on Flights

Royal Caribbean Restarts Dividends After Four-Year Hiatus

The Secret Battle for the Future of the Murdoch Empire

Universal Music Sheds $16 Billion in Market Value After Revenues Disappoint

Disney Bets on Deadpool, Wolverine and Dirty Jokes to Save Marvel

N.B.A. Announces Lucrative Rights Deals With Disney, Comcast and Amazon

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Morning News: July 24, 2024
Posted by Eddy Elfenbein on July 24th, 2024 at 7:04 am

India’s Government Plans to Steadily Lower Debt Ratio to 50%

The 23-Hour Shopping Frenzy: Argentines Stampede Over Border

French Stalemate, Listless German Industry Weigh on Eurozone Economy

Ex-Banker Behind $1.7 Trillion Japan Rally Says It’s Just Starting

Singapore Has World’s Most Powerful Passport After Unseating Europeans

Beefed-Up Olympics Security Thins Out Tourists, Squeezing Merchants

The Best Job Training Program In America

The Hottest Job Market in a Generation Is Over

Why Paper Checks Refuse to Die

I Changed My Mind. The Fed Needs to Cut Rates Now.

Mutiny in the Bond Market as Billionaires Pick a Debt Fight

Blackstone Mortgage REIT Cuts Dividend as Distress Increases

BNP Paribas Posts Earnings Beat, Backs Guidance

Spanish Bank Santander Raises 2024 Guidance After Earnings Beat

He Was an Online Drug Lord. Now He’s a Crypto Entrepreneur.

Evercore Posts Record Revenue on Dealmaking Rebound

CrowdStrike Blames Defect in Content Update for Epic IT Crash

Microsoft’s AI Assistants Will Revolutionize the Office — One Day

Alphabet’s Earnings, Revenue Surpass Forecasts. Capital Spending Surprises the Street.

What Marketers Should Know About Google’s ‘Surprising, but Not Shocking’ Cookies About-Face

GE Vernova Raises Guidance Amid Global Push for Electrification

Tesla’s Auto Woes Crash Elon Musk’s AI Dreams

Tesla Profit Slumps as Musk Tethers Fortunes to Robotaxis

Porsche AG Profits Bruised by Tough Chinese Market, High Supplier Costs

AT&T Mobile-Phone Subscribers Notch Surprising Gain

Your Cup of Coffee Is Already Expensive. It’s About to Get Even Worse

LVMH Shows the Luxury Sector Is in Pain

The Dior Bag Uproar That Shook South Korean Politics

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CWS Market Review – July 23, 2024
Posted by Eddy Elfenbein on July 23rd, 2024 at 6:17 pm

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

Q2 Earnings Season Is Looking Good

The stock market fell again today. The S&P 500 has now had four losing sessions in the last five days. Last week was the second-worst week for the S&P 500 this year. To be honest, we really haven’t had many bad weeks for several months.

Today’s market was a replay of a familiar theme. The broader market, including tech stocks, was down while the small-caps were up. For the day, the Nasdaq closed down a little bit, just 0.06%, and the Russell 2000 was up 1.18%.

We’re getting into the thick of Q2 earnings season. It’s still early. Overall, about 20% of the S&P 500 has reported so far but it’s looking good. On our Buy List, we’ve already had an earnings beat from Abbott Labs. Moody’s had a very nice beat and raised guidance. Polaris, however, missed and lowered guidance.

So far, the S&P 500’s earnings are on track to grow by 9.40% for Q2. That’s a decent number. It’s up from expectations of 8.63% one month ago. As we know, Wall Street likes to put a lid on expectations so they can later claim that they’re exceeding them. As has been said before, Wall Street is a game of expecting expectations.

Of the companies that have reported so far, 87.1% have beaten on earnings and 60.0% have beaten on sales. Of that, 55.7% have beaten on both earnings and sales. These numbers will probably trend lower as more earnings reports come out.

The big winners are financials. We saw some strong results from many large banks. Last month, Wall Street was expecting earnings growth of 4.55% from financials. Now the growth rate is trending at 13.89%. Energy is the big loser. In June, analysts were expecting growth of 12.62%. Now earnings growth for energy is tracking at -1.49%. It’s hard to make money in energy when oil fell from around $87 per barrel in April to $72 by June.

These are the early numbers. We still have the Magnificent Seven to report. In fact, Tesla and Google are due to report on Tuesday after the close. Wall Street expects collective growth from the Mag 7 of 30%.

Wall Street expects Google to report quarterly revenues of $84.21 billion. That’s up from $74.6 billion last year. For earnings, analysts are looking for adjusted earnings of $1.85 per share.

For Tesla, Wall Street is looking for earnings of 62 cents per share. That’s down from 91 cents for last year’s Q2. The stock is going for nearly 100 times this year’s earnings.

Barclays Raises Its S&P 500 Target to 5,600

Bloomberg points out that since 1928, the S&P 500 has gained an average of 5.2% during the third quarter of election years.

I usually don’t pay too much attention to price targets from Wall Street firms, but I noticed that Barclays today raised its 2024 price target on the S&P 500 from 5,300 to 5,600. Citigroup and Goldman Sachs had previously raised their price targets. Barclays had already raised its price target earlier this year.

I think these increases are noteworthy as they show confidence that the market’s strong performance during the first half of this year wasn’t an outlier. If the Fed soon starts lowering interest rates, that will help elevate valuation levels. Barclays also raised its earnings forecast for this year from $235 per share to $241 per share. If that’s right, then the market is going for 24 times earnings. That ain’t cheap.

Shares of UPS fell after it reported a disappointing earnings report. The company also cut its revenue guidance from $94.5 billion to $93 billion. The stock may be heading for its worst day ever.

Coca-Cola had a good earnings report. The soda company earned 84 cents per share which was a three-cent beat. Revenue came in at $12.36 billion compared with estimates of $11.76 billion. Coke now expects organic revenue growth of 9% to 10% this year. That’s up from the previous range of 8% to 9%.

We’re also witnessing lower home sales but at higher prices. On Tuesday, the National Association of Realtors said that existing home sales fell to 3.89 million for June (that’s seasonally adjusted and annualized). Sales are down 5.4% from last year. This was the 34th month in a row of declining year-over-year sales.

Even though sales were down last month, prices are still going up. The median sales price for June reached $426,900. That’s up 4.1% from last year and a new all-time high.

Lower sales and higher prices aren’t the contradiction they may seem. Perhaps higher rates have crowded out all buyers except those who aren’t so price sensitive (e.g. rich folks).

Wiz Walks Away From $23 Billion

Have you ever turned down $23 billion? I can’t say I have, but that’s what Israeli cybersecurity startup Wiz did.

Google had been talking with Wiz about a possible acquisition. The number that was apparently on the table was $23 billion. This would have been Google’s largest deal ever. Wiz said, no thanks.

The company said it’s now going to focus on an initial public offering. CEO Assaf Rappaport said, “Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice.”

The details about this deal have been hush-hush. Neither company admitted they were in talks with each other. Earlier this year, Wiz raised $1 billion from venture capital. That deal valued Wiz at $12 billion.

I have to confess to having some sympathy with Wiz in this matter. I completely understand why a company would prefer to keep its independence rather than being a shiny cog in a very large machine. Also, getting a deal together can take a long time, plus there are tons of regulatory issues.

There’s enormous growth potential in this market. Two years ago, Wiz said it generated $100 million in annual revenue. The company says that’s now up to $350 million.

Google has been working hard in recent years to boost its cybersecurity presence. I think we’ll see more deals in the future.

Outside of earnings, there are some economic reports coming later this week. On Thursday, the government will release its first estimate for Q2 GDP growth. The economy grew at a real annualized rate of 1.4% for Q1. Economists expect growth of 1.9% for Q2. I suspect that might be too high, but we’ll see. Wall Street expects something close to the mid-2% level. The Atlanta Fed’s GDPNow model expects GDP growth of 2.7%.

On Friday, we’ll get a look at the PCE price data for June. The expectations are that core and headline PCE will have increased by 0.1%. The Federal Reserve meets again next week, and it’s nearly universally believed that the Fed will leave rates alone one more time.

That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Morning News: July 23, 2024
Posted by Eddy Elfenbein on July 23rd, 2024 at 7:07 am

Spiders, Floods Join List of Things Disrupting Global Trade

U.S. Importers Are Rushing Goods in Early Ahead of Shipping Disruptions

Why Is the US Deficit So Big? Depends on Who You Ask

Can Kamala Harris Sell ‘Bidenomics’?

A Harris Presidency Would Carry Baton on Financial Industry Crackdown

Private Equity Gets Creative to Buy Time for More Gains. Clients Say Pay Me Now

Private Equity Is Illiquid by Design. Why Worry About It?

Jamie Dimon’s Handpicked Wall Street Duo Hunts More Market Share

Swiss Bank Julius Baer Taps Goldman Sachs Executive as CEO

Buffett’s Berkshire Hathaway Trims BYD Stake to Below 5%

Founder of South Korea’s Kakao Arrested for Suspected Stock Manipulation

CrowdStrike Outage Is Another Sharp Warning for Banks

Preparing for the Next Worldwide Tech Outage

Wiz Rejects Google’s $23 Billion Offer, Seeks IPO Instead

A.I. Can Write Poetry, but It Struggles With Math

Tesla Stages $386 Billion Comeback as Musk Elevates AI Over EVs

SoftBank’s Chief Pitches a New Path for Self-Driving Cars

Toyota Motor to Buy Back Shares Worth More Than $5 Billion From Japan Banks, Insurers

G.M. Will Restart Cruise Taxi Service

Shell Aims to Sell Scottish Wind Sites in Green Energy Reversal

Lockheed Boosts Forecast on Strong Fighter Jet, Radar Sales

China’s Richest Man Risks Losing Crown After $13 Billion Wipeout

Coca-Cola Tops Earnings Estimates, Hikes Full-Year Outlook as Global Demand Rises

Jake Paul’s W Brand Raises $11 Million to Compete With Axe, Old Spice

Philip Morris Lifts Annual Profit View on Zyn Pouch Strength

Warner Bros. Discovery Matches Rival Bid to Keep N.B.A. Broadcast Rights

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Morning News: July 22, 2024
Posted by Eddy Elfenbein on July 22nd, 2024 at 7:06 am

China Surprises With Rate Cut After Xi’s Big Meeting Disappoints

China’s ‘High-Quality’ Growth Drive Keeps Stimulus Restrained

Aging Is a Far Bigger Market Issue Than Just Biden

Soros Backs Harris as Other Wall Street Democrats Want a Contest

Biden Is Out, but His Economic Record Still Burdens His Replacement

A Harris Economy Could Prove More Progressive Than ‘Bidenomics’

Donald Trump Can Survive Many Policy Errors, But Not a Weak Dollar

Kamala Harris Seen as Tougher Oil Opponent Than Biden

Shipping Gets Even Dirtier as Houthi Attacks Fuel Longer Voyages

Dalio’s Exit Terms at Bridgewater Said to Delay Abu Dhabi Plans

The $12,000 Harvard Class Celebrities Are Fighting to Get Into

As New Tech Threatens Jobs, Silicon Valley Promotes No-Strings Cash Aid

The US and China Are in an All-Out Race for AI Domination

China Drops Sanctions on US Communications Firm in Rare Reversal

Verizon Revenue Misses Estimates on Lower Equipment Upgrades

Big Truck Energy

Corvette Bucked a Sports Cars Decline. Can It Thrive in an E.V. Era?

EVs Are Cheaper Than Ever. Can Car Buyers Be Won Over?

Jeeps Could Crash the Party at GM and Ford

Terex to Buy Dover’s Garbage-Truck Business in $2 Billion Deal

Unsafe Ozempic Knockoffs Are Flooding the Market

Il Makiage Owner Oddity Tech Prepares to Launch Medical-Grade Skincare Brand

‘Barbie’ Was Supposed to Change Hollywood. Many See ‘No Effect.’

How Walt Disney World Is Trying to Make Amends With Unhappy Guests

For Fashion, Sports Stars Are the New Superstars

Abercrombie Won by Leaving Teens Behind. Sibling Brand Hollister Is Taking the Opposite Approach

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Morning News: July 19, 2024
Posted by Eddy Elfenbein on July 19th, 2024 at 7:03 am

Cubans Are Still Being Recruited by Russia to Fight in Ukraine

South Africa to Lay Out Carbon Market Regulation Proposals

Rio Tinto’s Lithium Patience Finally Pays Off in Serbia

EV Charging Industry Reaches Crossroads as Competition Heats Up

Get Ready to Pay More for Less-Reliable Electricity

Unprecedented IT Outage Cripples Businesses Around the Globe

What Caused Such a Widespread Tech Meltdown?

What Is CrowdStrike?

China Stock Traders Move on From Plenum With Few Reasons to Buy

Japan’s Above-Target Inflation Fuels Some Rate Hike Hopes, But Caution Persists

IMF Says Zambia’s Dedollarization Plan May Be Counterproductive

What Presidential Election? So Far, the Stock Market Doesn’t Care

What Trump Doesn’t Get About McKinley and Tariffs

Fed Prepares for September Cut as Powell Shifts Focus to Jobs

GoldenTree Sees $10 Billion Opportunity as Banks Unload Risk

Amex Says It’s Going on Marketing Spree as Billings Growth Slows

Nvidia’s Other Billionaire: Director Mark Stevens Joins Huang in 10-Figure Club

The Data That Powers A.I. Is Disappearing Fast

The Push to Develop Generative A.I. Without All the Lawsuits

Five Questions With Apollo Global Co-Founder Josh Harris

There Is a Time for Corporate Despots—but It Isn’t Forever

Eurozone Businesses Expect Wage Growth to Slow, ECB Survey Finds

Why UK Is Finally Changing Its Ancient ‘Leasehold’ Laws

The Zombie Mall King Doesn’t Want to Be a Bottom-Feeder Forever

What’s Chocolate Without Cocoa Butter? ‘Chocolatey’ and Cheap

In the World of Luxury Cars, Hybrids Are the Sexiest New Thing

Netflix’s Next Act Will Be Slower to Catch On

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Morning News: July 18, 2024
Posted by Eddy Elfenbein on July 18th, 2024 at 7:05 am

China’s Leaders Offer High Hopes but Few Details for Road to Recovery

China’s Big Policy Meeting to Disappoint Metal Bulls

Hong Kongers Fleeing to UK Leave $3.8 Billion Trapped Behind

Rachel Reeves Warns ‘Difficult Decisions Ahead’ to Fix UK Economy

ECB Keeps Rates Steady, Pausing Divergence With Fed

Where Do Economists Think We’re Headed? These Are Their Predictions

Why the Fed Should Cut Rates Now—Not Wait Until September

Biden Forgives $1.2 Billion in Student Loans in Latest Relief

Trump May Find a Weak Dollar Isn’t Easy to Come By

US Companies Boost Imports in Rush to Avoid Tariffs

What Musk Could Gain From Trump

Brookfield Lines Up a 36-Year-Old Rising Star as Next Billionaire CEO

More CFOs Are Getting the CEO’s Job

A Guggenheim Executive’s Big Plan to Build Millions of New Homes

Blackstone Profit Misses Estimates as Real Estate Exits Slow

How to Become a Player in the Global Mineral Trade

TSMC Hikes Revenue Outlook to Reflect Heated AI Demand

Google Set to Lead $250 Million Round by Mobile Startup Glance

Nokia Cuts Sales Guidance as Market Uncertainty Continues

Tech Giants Up Ante by Withholding Products from EU

Novartis Raises Profit Guidance as Key Drugs Boost Sales

US Public EV Chargers Set to Surpass Gas Stations in Eight Years

Volvo Car’s Shares Rise on Earnings Growth, But Warns of Sales Hit From EU Duty on Chinese EVs

Revenge Travel Runs Out of Force, Hurting Airlines’ Profit Goals

W.N.B.A. Players, Bargaining Power Soaring, Seek Expert Advice on Labor Deal

Bud Light Slips to No. 3 After Boycott Reshaped Beer Industry

The Fight Over Masks in Stores Is Back—This Time With a Twist

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