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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Morning News: July 17, 2024
Posted by Eddy Elfenbein on July 17th, 2024 at 7:05 am

UK to Own Clean Energy Assets Through State-Backed GB Energy

Hurricane Beryl Serves as Ominous Warning for Gulf Coast LNG

BHP’s Iron Ore, Copper Production Rises

Wall Street Wants In on America’s Battery Storage Boom

U.K. Inflation Steady as Economists Puzzle Over ‘Taylor Swift Effects’

Dollar Falls to Weakest Since May as Yen Rally Shakes Up Markets

US Floats Tougher Trade Curbs in Chip Crackdown on China

I.M.F. Sees Signs of Cooling in U.S. Economy

New York Fed President John Williams Discusses the Interest-Rate Outlook

Trump, in Interview, Puts ‘Lovely’ Europe on Notice for Tariffs

Trump on Taxes, Tariffs and Jerome Powell

Trump’s Proposed Tax Cuts and Increased Tariffs Could Hurt Poorer Households

Trumponomics 2.0 Will Awaken Bond Vigilantes

How a Network of Tech Billionaires Helped J.D. Vance Leap Into Power

How J.D. Vance Seeks to Reorient the Republicans’ Approach to Business

Citizen’s Financials Profit Beats Estimates on Strong Capital Markets

U.S. Bancorp’s Adjusted Profit Falls as Deposit Costs Hurt Interest Income

HSBC Names Elhedery CEO, Picking Insider for Top Job

What Americans Invest In Now

‘AI Laggards’ Find Favor as Magnificent Seven Stocks Lose Luster

‘Finfluencers’ Have Davos Set Rethinking Future of Wealth Advice

Prediction: Nvidia Will Climb in the Second Half Thanks to This 1 Game-Changing Move

Musk Says He Will Move X and SpaceX Headquarters Out of California

Daimler Truck Writes Down China Joint Venture, Puts Guidance Under Review

Kroger-Albertsons Deal Is Haunted by ‘Spectacular’ Past Failure

Ray-Ban Maker EssilorLuxottica to Buy Supreme Brand From VF for $1.5 Billion

IAC Steps Up M&A Plans Amid Recent Exploration of Paramount Bid

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CWS Market Review – July 16, 2024
Posted by Eddy Elfenbein on July 16th, 2024 at 6:12 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.”)

Leadership Has Changed on Wall Street

On Thursday, the stock market closed higher for the 13th time in the last 15 sessions. The S&P 500 hit another new all-time high – (take it away, Rita!). This is our 37th new high this year, and we’re only at the All-Star break.

What’s most striking about this rally is that the market’s leadership has abruptly changed.

Technology stocks, especially large-cap tech, had been leading the charge while many value stocks, typically smaller industrial stocks, had been lagging behind. The gap between growth and value had gotten unreasonably large.

That all changed with last week’s inflation report. What happened is that the benign inflation news has apparently given the go-ahead to the Federal Reserve to start cutting interest rates in September. The Fed has been clear that it wasn’t going to cut rates until it saw more evidence that inflation is well-contained. That’s exactly what it got.

The important fact for investors is that lower rates change the risk profile of the stock market. Value stocks usually benefit as rates head downward.

The current stock market has become an either/or market. The two competing camps are best represented by the Russell 2000 Index of small-cap stocks on one hand, and the Nasdaq Composite on the other.

Each day, the stock market seems to greatly favor one of these indexes, and it hates the other. It’s like a giant, multi-trillion dollar game of tug-of-war. Before last week’s inflation report, the Nasdaq was on fire and the Russell 2000 couldn’t do anything right.

Since the inflation, everything has flipped. Check out this chart of the Russell 2000. It went nowhere for weeks, then suddenly, it lurched forward.

Here’s a chart that shows you how this has become an either/or market.

I made a scatterplot of the daily excess gain of the Nasdaq and the Russell 2000. By excess gain, I mean how much better or worse the index did compared with the S&P 500. The horizontal axis shows the excess gain of the Russell, and the vertical is the excess gain of the Nasdaq.

You can see how the dots make up a downward sloping line. In simpler terms, when one index leads the market, the other lags and vice versa. One side of Wall Street is yelling “Go Nasdaq!” and the other is yelling “Go Russell!” It’s as if there’s no middle ground. The Russell was up another 3.5% today while the Nasdaq was up only 0.2%.

The Nasdaq did well on days when we thought rates were going to stay high, but the Russell did well on days when we thought rates would fall. Since Thursday, we’ve strongly moved from the first camp to the second camp.

Notice the dot at the lower right? That was last Thursday, the day of the inflation report. The Nasdaq fell 2% that day and the Russell was up by more than 3.5%. That’s one of the largest spreads between the two in decades.

Will small-caps continue to lead the market? I’m inclined to think they will, but perhaps not as dramatically as the last four days.

It looks like the Fed may only be getting started with its rate cuts. The latest futures prices indicate a 93% chance of a rate cut in September. There’s a good chance that we may see two more rate cuts this year, plus a few more next year. It’s possible that interest rates may be 1% lower by this time next year.

Yesterday, Jerome Powell said, “We didn’t gain any additional confidence in the first quarter but the three readings in the second quarter, including the one from last week, do add somewhat to confidence.” The fact is that the labor market has cooled off a bit and the inflation news has improved.

The recent change in leadership has been good for our Buy List. From May to July, the Buy List had been lagging the market, but now things are looking better. That reminds me of a quote from Michael Gayed: “There are no gurus, only cycles.”

One of our Buy List stocks that’s perked up is the Federal Agricultural Mortgage Corporation (AGM), better known as Farmer Mac. Lower rates are clearly good for its business. In the last month, the stock has gained more than 24% despite no real news being released.

AGM hasn’t said yet when it will report earnings for this quarter, but going by past years, it will probably report around August 6. Wall Street currently expects Q2 earnings of $4.11 per share. Even after the recent rally for AGM, the stock is going for less than 12 times next year’s earnings.

Good Retail Sales Report for June

The stock market was helped this morning by a surprisingly strong retail sales report. Last month, retail sales, except for autos, rose by 0.4%. That’s the most in three months. Wall Street had been expecting an increase of 0.1%.

If we include autos, then retail sales were unchanged, but that includes a 2% drop of auto dealers. Wall Street was expecting a drop of 0.3%. The retail sales number for May was revised up to 0.1%.

These numbers suggest that consumers were in good health as they headed towards the close of Q2. Thursday’s numbers are good to see because the consumer hasn’t appeared terribly healthy this year. While wages have gone up, so has inflation. Also, higher interest rates from the Fed have made it more difficult to finance new buying.

Of the 13 categories tracked by the Commerce Department, only three registered declines. Those included sales of gasoline, reflecting lower prices in the month. Sales at sporting goods stores also edged lower.

If we exclude auto dealers and sales at filling stations, then retail sales rose by 0.8%. That’s the most since early 2023. Bloomberg notes that “sales at health and personal care stores rose by the most since October, while sales at building material and garden equipment stores increased by the most since February.”

Shoppers were active last month. Sales for online retailers rose by close to 2%, and home building stores saw an increase of 1.4%.

The reason why it’s good to exclude auto sales for June is that many car dealers were impacted by a cyberattack. AutoNation said it will take a big hit to its earnings report.

The housing starts report is out tomorrow. We’re going to have lots more earnings reports coming up soon. The next big economic report will come next Thursday when the government releases its first estimate of Q2 GDP growth. I’m expecting a number that’s low but positive.

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

– Eddy

Morning News: July 16, 2024
Posted by Eddy Elfenbein on July 16th, 2024 at 7:04 am

The World Is Pushing Clean Energy. Oil Companies Are Thriving

Oil Bulls Face Make-or-Break Moment on Price Rally

TotalEnergies Expects Output at High End of Guidance, Warns on Weak Refining Margins

Rio Tinto Gets Simandou Approvals

Nobel Laureate Stiglitz Explores Ways to Boost Supply Chain Resilience

Xi Jinping’s Great Economic Rewiring Is Cushioning China’s Slowdown

US Tariffs at 60% Would Halve China’s Growth Rate, UBS Says

Powell Says US Data Offer Confidence That Inflation Is on Path to 2%

The True Bull Market May Finally ‘Wake Up’ as Investors Eye Rate Cuts

Biden Calls for National Rent Control on Corporate Landlords

The Housing Market Will Tell the Fed How Much to Cut Rates

Timing ‘Trump Trades’ With an Eye on GOP Platform

Buffett’s Berkshire Hathaway Sets, Closes at Record High

BofA Says Net Interest Income to Climb After Quarterly Haul Misses Estimates

Blue Owl to Buy Atalaya in Deeper Expansion Into Private Credit

Insurers Tied to Apollo, KKR Buy Mortgages Outright in New Twist

Goldman Joins Rivals in Setting Up New Mideast-Focused Fund

Morgan Stanley Traders, Bankers Beat Estimates as Wealth Lags

Hedge Fund Segantii Has Returned More Than 90% of Client Money

Storage Firm Lineage Is Said to Seek Up to $3.85 Billion in IPO

General Motors Backs Away from Its One Million EV Sales Target

Tesla Is On a Hiring Spree After Musk-Ordered Mass Firings

UnitedHealth Profit Beats Expectations as Cost Woes Persist

Dollar General Will Pay $12 Million in Fines Over Workplace Safety Violations

Cartier Owner Richemont Hit by Sluggish Demand in China

Hugo Boss Joins Burberry in Warning on Luxury Spending, Cuts Full-Year Sales Outlook

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Morning News: July 15, 2024
Posted by Eddy Elfenbein on July 15th, 2024 at 7:03 am

By Burning Down Buildings, Insurers Want to Change How They’re Built

The World’s Power Grids Are Failing as the Planet Warms

ICE Says Europe’s Diesel Contract Thrives After Russian Exclusion

China to Boost Funding to Reduce Emissions at Coal Power Plants

Cleveland-Cliffs in $2.5 Billion Deal to Buy Canadian Steelmaker Stelco

Germany’s Factories Founder While Competition From China Revs Up

China’s Economic Growth Comes in Worse Than Expected, Adding Pressure on Xi

Global Markets Ramp Up the ‘Trump Trade’ After Rally Attack

How Trumponomics Could Undermine the U.S. Economy

As Policy Types Cheer the Demise of ‘Inflation,’ Inflation Arrives

Why Small Caps Have the ‘Most Compelling Investment Case’ Right Now

How Regulators Are Using Banks to Illuminate Shadow Banks

North Korean Hackers Sent Stolen Crypto to Wallet Used by Asian Payment Firm

Goldman Sachs Profit Surges as Traders Top Analysts’ Estimates

BlackRock Hits $10.6 Trillion Asset Record, Cites ETF Boost

How Microsoft’s Satya Nadella Became Tech’s Steely Eyed A.I. Gambler

Alphabet in Talks to Buy Wiz in $23 Billion Cyber Deal

Apple’s India Sales Surge 33% to Record in Shift From China

Apple, Samsung Phone Shipments Rose in Second Quarter

Atos Signs $1.83 Billion Finance Deal With Banks, Bondholders

AT&T, Verizon Tangle Over 5G Service for Emergency Responders

Hacker Says AT&T Paid About $400,000 to Erase Sensitive Data

Amazon Sold a Used Diaper. It Tanked a Mom-and-Pop Business

Promised Cures, Tainted Cells: How Cord Blood Banks Mislead Parents

Burberry Replaces CEO and Rethinks High-End Luxury Strategy

Swatch Group Posts Sales Decline on Weak Demand in China

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Morning News: July 12, 2024
Posted by Eddy Elfenbein on July 12th, 2024 at 7:04 am

Xi Jinping’s Latest Food Security Push Begins in China’s Fields

China Reaches Record Trade Surplus, Raising Alarm Abroad

Japan Likely Spent $22 Billion on Yen Intervention Thursday

Taylor Swift Effect May Be Latest Dilemma for BOE Rate-Setters

Milder Inflation Opens Door Wider to September Rate Cut

It’s Time for the Fed to End the Waiting Game

Have Potato Chips Reached Peak Price?

Economists Say Inflation Would Be Worse Under Trump Than Biden

Yellen Grilled by Trump Allies in Odd Feud Over Debt Management

Biden’s Pick to Lead F.D.I.C. Faces Little Resistance in Senate Hearing

The Supreme Court Blows Up a Popular Small-Business Succession Plan

The Election Muddle Aside, Investing Has Been a Snap Lately

Tech Stocks Could See a Brexit-Like Rerun, This Fund Manager Says. A Big Test is Brewing

JPMorgan Notches Record Profit on Visa Gain, Dealmaking Jump

Wells Fargo’s Cost-Cutting Progress Stalls as Expenses Climb

BNY Quarterly Profit Rises on Investment Service Fee Boost

Why ‘Payment-In-Kind’ Debt Is So Appealing — and Risky

Leon Black Oversees $1 Billion Wealth Shift For Apollo Fortune

Senate Democrats Make Antitrust Case Against Corporate Landlords

Northern Data Forecasts Sales to Triple on Cloud Computing Push

AT&T Says New Hack Includes Records of Customer Calls, Texts

Ericsson Posts Better-Than-Expected Sales on Licensing Revenue Increase

Deutsche Lufthansa Cuts Guidance as Flagship Airline Struggles to Break Even

Delta’s Sagging Profit Signals Trouble for Airlines This Summer

Dealerships Hopeful EVs Will Bring Back That New Car Smell

Peter Thiel’s Doping Games and Tech’s Quest for a Superhuman

LVMH Has Already Won Gold at the Paris Olympics

The Real-Estate Scion Behind the Saks and Neiman Marcus Marriage

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Morning News: July 11, 2024
Posted by Eddy Elfenbein on July 11th, 2024 at 7:07 am

OPEC’s Bullish Oil Demand View Is at Odds With Reality

IEA Cuts 2025 Oil Demand Forecast, Lifts Supply View

Thinking About a Mississippi River Cruise? There’s One Big ‘If’

France Seeks a Premier Who Can Survive in the Job

Wealthy French Spooked by Election Explore Possible Moves Abroad

I.R.S. Crackdown on Delinquent Millionaires Yields $1 Billion

Republicans Are Fracturing on the Economy

US Inflation Data to Bolster Case for Fed Interest-Rate Cut in September

Bank of Korea Holds Rate Steady for 12th Time

MoonPay Plans to Expand in London, Citing UK’s ‘Talent Density’

Get Ready for More AI Mania This Earnings Season

Private Equity’s Creative Wizardry Is Obscuring Danger Signs

Citadel Securities Crafts Plan to Shake Up Banks’ Trading Desks

JPMorgan Aims to Amass 15% of US Consumer Deposits, Boost Credit Card Share

Trading Houses Lure Top Talent from BP, Shell

Health-Care Companies Are Sending Your Data to Big Tech

Wealth Tech Startup for Doctors Raises $200 Million, Eyes M&A

Pfizer Advances Weight-Loss Pill in Race to Lucrative Market

Tony Robbins Bet $200 Million on a Green-Energy Breakthrough. Proof It Works Remains Elusive

BHP to Suspend Australian Nickel Operations Amid Glut of EV Metal

Biden Offers $1.7 Billion to Help Factories Build Electric Vehicles

How Rivian Became the Anti-Tesla

Thermonuclear Blasts and New Species: Inside Elon Musk’s Plan to Colonize Mars

Delta’s Sagging Profit Signals Trouble for Airlines This Summer

PepsiCo Posts Weaker-Than-Expected Sales as Volume Slips

Bread and Bullets: Some Southern Supermarkets Now Sell Ammo Out of Vending Machines

Uniqlo Owner Raises Profit View

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