Morning News: March 5, 2024
Posted by Eddy Elfenbein on March 5th, 2024 at 7:03 am

China Sets GDP Goal That Needs Policy Support ‘From All Fronts’

China’s Weak Energy Target Exposes Growth Dilemma

Singapore Has Taylor Swift to Itself This Week, and the Neighbors Are Complaining

Britain Isn’t Such a Basket Case Anymore, at Least to Investors

Bitcoin’s Market Value Touches Record as Token’s Price Nears All-Time High

Brighter Economic Mood Isn’t Translating Into Support for Biden

US Banks Far More Exposed than Europeans to Property Crunch, Says Morgan Stanley

Bank Runs Spooked Regulators. Now a Clampdown Is Coming

NYCB Ballooned Despite Real Estate Warnings in Years Before Fall

Biden to Launch Joint FTC-DOJ Task Force to Crack Down on ‘Unfair and Illegal Pricing’

Biden to Finalize Rule to Cap Credit Card Late Fees at $8

JPMorgan Joins France’s Payments Network CB to Skirt Visa, Mastercard

Immigration Rage Drowns Out the US Labor Market’s Need for Workers

Business Is Booming for DEI Lawyers as Corporate America Asks ‘What’s Legal?’

Seoul Semiconductor Files Patent Lawsuit Against Amazon With European Court

Apple on Collision Course With EU as New Digital Markets Act Kicks In

Apple’s iPhone Woes in China Deepen With a 24% Sales Plunge

AMD Hits US Roadblock in Selling AI Chip Tailored for China

Nio Loses Another $2.9 Billion as China’s EV Battle Intensifies

Former Twitter Executives Sue Elon Musk for More Than $128 Million in Severance

JetBlue and Spirit Call Off Their $3.8 Billion Merger

Simply Paused or Permanently Sunk? The Kroger-Albertsons Merger Has Hit a Major Snag

Macy’s ‘Is Melting Away’: Activist Investor Brings $6.6 Billion Bid to Buyout Battle

Target Sales Fall for First Time Since 2016

Book Startup Pitches Authors a Novel Deal: $0 Up Front, Bigger Profits

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Morning News: March 4, 2024
Posted by Eddy Elfenbein on March 4th, 2024 at 7:05 am

Russia’s Backdoor for Battlefield Goods From China: Central Asia

OPEC+ Will Soon Confront a Tougher Oil-Market Test

US Funding Bill Blocks China from Buying Oil from Strategic Petroleum Reserve

Red Sea Conflict Threatens Key Internet Cables

Beijing Is Expected to Unveil GDP Target Around 5% — A Goal Now Harder to Achieve

Rich Countries Are Becoming Addicted to Cheap Labor

Higher Interest Rates Drag Swiss National Bank to $3.6 Billion Loss

Looming Event Risk Can’t Stop Nikkei Topping 40,000

Judge’s Ruling Sets Back Law Meant to Fight Money Laundering

America Blew Almost $2 Trillion. Make It Stop

Does Interest Rate Pain Explain the Consumer Sentiment Gap?

Wall Street’s DEI Retreat Has Officially Begun

Private Equity’s Green Star Started It All With a Database

JPMorgan’s AI-Aided Cashflow Model Can Cut Manual Work by 90%

Humanoid Robots at Amazon Provide Glimpse of an Automated Workplace

Forced to Change: Tech Giants Bow to Global Onslaught of Rules

Apple Hit With €1.8 Billion EU Fine Over App Store Rules

Nvidia Leaps Aramco to Be World’s Third Most-Valuable Company

Companies Are Juggling More Software Vendors Than Ever. It Isn’t Easy

Railroad Workers Were Ready to Strike. Now They’re Fighting to Save Their CEO

It’s Me, Hi, I’m the Problem. I’m 33

The ZIP Code Shift: Why Many Americans No Longer Live Where They Work

Ohio Fines CVS $1.5 Million Over Safety and Staffing Issues

Vista Outdoor Rejects $2.9 Billion Takeover Offer From MNC Capital

From Rock to Rap, Artists Are Doubling Down on Videogames to Reach New Listeners

Why Prices of the World’s Most Expensive Handbags Keep Rising

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Morning News: March 1, 2024
Posted by Eddy Elfenbein on March 1st, 2024 at 7:02 am

Finally, Some Good News at the W.T.O.

The Monaco Royals Whose Deals Have Brought Peril to the Palace Doors

India’s Blowout GDP Based on Data Distortion That Masks Slowdown

China’s Wobbly Start to the New Year

Xi’s One-Man Rule Over China’s Economy Is Spurring Unrest

Ukraine Drafts Crucial Farm Workers in Desperate Rush to Bolster Military

Yellen Says Russia Assets No Substitute on Ukraine Aid

Eurozone Inflation, at 2.6%, Continues to Ease

Thomas Jordan: The Technocrat Central Banker Who Made the Big Decisions

Congress Approves Interim Funds to Avert US Government Shutdown

US Money Market Funds See Big Inflows Ahead of Inflation Data

A Fed Held Hostage by Data Is Asking for Trouble

The U.S. Economy Is Surpassing Expectations. Immigration Is One Reason

NYCB Flags Weaknesses in Loan Oversight and Names New CEO

Bankers Sick of the NYC Commute Are Fueling a Boom in a Mini Greenwich

Big Tech’s Boom Has Strategists Scrambling to Keep Up With Rally

Court Weighs Whose Freedom of Speech Is at Risk in Content Moderation Fight

Elon Musk Sues OpenAI, Altman for Breaching Firm’s Founding Mission

Tesla Stands to Earn Billions of Dollars a Year by Opening U.S. Charging Stations to Drivers of Ford and Other EVs

Shrinkflation 101: The Economics of Smaller Groceries

Developers Got Backing for Affordable Housing. Then the Neighborhood Found Out

Global CO2 Emissions Hit Record High in 2023, IEA Says

Disney Heirs Line Up Against Activist Investors

Kuehne + Nagel Shares Tumble After Earnings Fall Short of Expectations

Daimler Truck Expects 2024 Adjusted Earnings in Line With Previous Year; Raises Dividend

Pearson’s Pretax Profit Rises; Extends Share Buyback Plan by GBP200 Million

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Morning News: February, 29, 2024
Posted by Eddy Elfenbein on February 29th, 2024 at 7:07 am

Ukraine Sees Risk of Russia Breaking Through Defenses by Summer

AI Is Already Changing How the US Wages War

China Bans High-Frequency Trader as Quant Crackdown Expands

Market Herding Is Everywhere, Not Just the US

Canada’s TD Bank Posts Lower Profit on Higher Loan Loss Provisions

Fed Officials Emphasize Data to Guide Pace of Interest-Rate Cuts

Bitcoin ETFs Shake Up Crypto Market After Storming Wall Street

Greg Coffey in Talks to Buy EMSO, Create $13 Billion Hedge Fund Firm

Audit Deficiencies by Accounting Giants Grew in Latest Inspections, U.S. Regulator Says

The Right Questions Can Make You Money

Auto Insurance Spike Hampers the Inflation Fight

FAA Gives Boeing 90 Days to Come Up With Quality-Control Plan

Air Travel Is Extra Hard for Wheelchair Users. Here’s How the Government Wants to Fix It

Oil Producers May Not Share Analysts’ Views of a Tighter Market

Frackers Are Now Drilling for Clean Power

Biden Calls Chinese Electric Vehicles a Security Threat

Robotics Startups Hope the AI Era Means Their Time Has Come

How the World’s Priciest Property Market Stumbled

The American Southwest Is Finally Starting to Embrace Vertical Living

Chemours Shares Slide Premarket as Execs on Leave Amid Probe

Tech Layoffs Keep Coming. Why Is Head Count Barely Budging?

Billionaire Claure Forges New Empire After WeWork Collapse

Chocolate Makers Try a New Recipe: Less Chocolate

Beiersdorf Guides for Sales Growth Ahead

Birkenstock Posts Strong Earnings With Sandal Demand Growing

Paramount’s Big Game Is Still a Sideshow

Disney’s $8.5 Billion Reliance Merger Is a Streaming Wars Win in Sports-Obsessed India

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Morning News: February 28, 2024
Posted by Eddy Elfenbein on February 28th, 2024 at 7:02 am

Another Chinese Property Giant Faces a Creditor Who Wants It Dismantled

Hong Kong Takes Drastic Action to Avert Property Slump

China Tells Quants to Phase Out Strategy Blamed for Turmoil

Eurozone Confidence Keeps Struggling to Recover, Survey Shows

The Fed Contrarian Who Saw the Soft Landing Coming

Lorie Logan Makes Waves on Wall Street From Her Perch at the Dallas Fed

The Big Bond Steepener Is Flopping as the Fed Delays Rate Cuts

Flawed Valuations Threaten $1.7 Trillion Private Credit Boom

Sam Bankman-Fried Makes His Last Stand

How Much Wealth You Need to Join the Richest 1% Around the World

A Tech Billionaire Is Quietly Buying Up Land In Hawaii. No One Knows Why

Gen Alpha Are Ready to Spend – and They Want to Be Treated Like Adults

US Home-Buying Demand Nears Worst Since 1995 With Rates Above 7%

This Is Where New Migrants Are Going When They Reach the US

How the Media Industry Keeps Losing the Future

Baidu Posts Record Revenue Amid Search for New Growth Engines

China’s Electric Vehicles Are Going to Hit Detroit Like a Wrecking Ball

Apple’s Scrapped Car Project Means AI and Headset Bets Are More Urgent

Elon Musk Hypes Tesla Roadster Again After Half Decade of Delay

New F1 Team Names Bring Money, Marketing and Lots of Syllables

How a Vermont Ski Area Roared Back From a Financial Scandal

Surge Pricing for Burgers and Shakes? Wendy’s Will Give It a Whirl

Going ‘California Sober’ May Be Bad for Your Heart

Companies Were Big on CBD. Not Anymore

Hollywood Is Banking on Dune: Part Two to Revive the Blockbuster Experience

Levi’s Wants You to Rethink Your Denim Shopping

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CWS Market Review – February 27, 2024
Posted by Eddy Elfenbein on February 27th, 2024 at 7:18 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.”)

LUNR Falls Back to Earth

I feel terrible for the company Intuitive Machines (LUNR). This was the team that flew its craft, named Odysseus, to the moon and landed it on the lunar surface. This was the first time Americans had done so in over 50 years.

There was, however, one small problem. Odysseus landed on its side. That wasn’t supposed to happen. In my opinion, who cares?! They effectively landed a Roomba on another planet. Dear lord, that’s amazing!

So what if they got some minor details wrong? They got the first 99.999999% of the mission right. Odysseus is the first privately-built craft in history to make a soft landing on the moon.

Mind you, Odysseus is still working fine. It’s even been able to send back incredible photos. It’s just lying on its side. I mean, Odysseus is chillin’. Who cares?

Well, the markets, apparently. On Monday, shares of Intuitive Machines plunged 35%. At one point today, LUNR was down another 20%. The market gods can be a cruel bunch.

This is, however, an important lesson for investors. The stock market is not swayed by emotion. No matter how much you may wish for something to happen, the market simply doesn’t care. After all, shares of LUNR jumped 530% between the stock’s January low and its February high. The company had initially reported that the landing went well. Only when the evidence became clear did they say there was a problem.

I’m on LUNR’s side. Not enough to be an investor, but certainly enough to be a fan. This is a good reminder that a near-term share-price move isn’t the end of the world. Or even the moon.

Durable Goods Plunge the Most in Four Years

This morning, the Commerce Department released the durable goods report for January, and it was pretty bleak.

Last month, orders for durable goods fell by 6.1%. That was even below Wall Street’s already pessimistic forecast for a drop of 4.5%. This was the biggest drop in nearly four years, and that report came during the initial stages of Covid.

When we say durable goods, we mean things that are intended to last more than three years. This data can be a good omen for future economic growth. People tend to buy durable goods when they’re optimistic. That’s why today’s report is so concerning.

The data for December was revised lower to a drop of 0.3%. The initial report had been for it to remain unchanged. These reports may suggest that the economy is downshifting from robust growth towards the end of last year.

A major factor for the lousy report is a 59% drop in in civilian aircraft orders. According to MarketWatch, “Boeing reported on its website that it had received only three orders for commercial aircraft in January, sharply down from 371 in December.”

Overall transportation orders dropped 16.2% last month after slipping 0.6% in December. Orders for motor vehicles and parts fell 0.4%. Excluding transportation, durable goods orders fell 0.3% last month after dipping 0.1% in December.

There were decreases in orders of primary and fabricated metals. Machinery orders were unchanged. But orders for computers and electronic products increased 1.4%, while those for electrical equipment, appliances and components rose 0.9%.

Economists like to look at “core capital goods” which is non-defense capital goods minus aircraft orders. That’s considered to be a good proxy for business spending. For February, it edged up by 0.1%. For January, it was down by 0.6%.

There’s been a lot of talk about “seasonality effects” or the impact of weather or the news of large-scale layoffs. For example, Google is laying off 12,000 employees after reporting a profit of $20 billion for Q4. Of course, that’s what a profit-making enterprise does. We’ll need to see more data, but the economy may be slowing down right now.

Also this morning, the Conference Board said that its consumer confidence index fell to 106.7. Economists had been expecting 115. The number for January was revised lower to 110.9. This is another worrying sign.

On Monday, the Commerce Department said that sales of new homes rose in January but by less than expected. Sales of single-family homes totaled 661,000 last month (that’s an annualized figure). Wall Street had been expecting 690,000. One bright spot is that it was a 1.5% increase over December.

Meanwhile, the median sales price of new houses last month came in at $420,700, up from $413,100 in December. One problem impacting the housing market is that there’s relatively low supply. Since so many people locked in mortgages when rates were lower, they’re skittish about putting their homes on the market right now.

I don’t think the economy is in serious trouble right now, but this week’s reports do concern me. We’ll need to see more reports before we can definitely say that the economy is in trouble. The odds of no rate cut coming in June are slowly getting higher.

Tomorrow, the government will update its report on Q1 GDP growth. The initial report was quite good. On Thursday, we’ll get the PCE price data. This is the Fed’s preferred measure for inflation. Then on Friday, the ISM Manufacturing Index comes out.

Amazon Joins the Dow

Yesterday, Amazon (AMZN) joined the Dow Jones Industrial Average. This is Wall Street’s equivalent of being a “made man.”

It’s a big deal. There are only 30 stocks in the index so when one goes in, another comes out. This time, it was Walgreens Boots Alliance (WBA) that got the boot. The company recently cut its dividend and I think that prompted the index keepers to make a move.

The Dow doesn’t change its members very often. This was the first change to the Dow in nearly four years. Actually, the Dow has been getting slightly more active in recent years.

The Dow didn’t make any changes to the index from 1939 to 1956 when it replaced Loew’s Theatres with International Paper. They made four more changes in 1959 but that was it until 1976. All told, the index went 37 years with only making four changes to its roster. Since its founding in 1897, the Dow has made about 130 changes.

In 1939, the gatekeepers of the Dow removed IBM (IBM) from its index. That was a huge mistake. It was added back in 1979. Over those 40 years, IBM was a huge winner for investors. If the Dow folks had left it alone, the Dow’s level would be much higher today.

I’m not a big fan of the Dow. My preference is to follow the S&P 500, and that’s usually what I reference when I’m speaking of the market as a whole. Investors see it that way as well. Among index funds, $5.75 trillion is indexed to the S&P, but only $87 billion is indexed to the Dow.

The lack of tech stocks has hurt the Dow. In recent years, the S&P 500 (in blue) has significantly outperformed the Dow (in red).

The S&P 500 is a larger index, but the other reason is that it’s weighted by market value while the Dow is weighted by price. To calculate the Dow, you simply add up all the prices and adjust it by a multiple.

Before this week’s change, each $1 in the share price of a Dow member worked out to about 6.6 Dow points. Since Walgreens is around $20 per share, it was barely a blip in the index. It was, by far, the lowest-weighted stock in the index. Amazon is currently around $173 per share. Recall that Amazon split its stock 20-for-1 less than two years ago. (Google did a 20-for-1 a little bit after Amazon.)

There’s also the issue of Walmart splitting its stock 3-for-1. Even though nothing changes, Walmart’s weighting in the Dow will drop by two-thirds. Price weighting simply makes little sense. I understand why it was used in 1896, but not today. The Dow is an anachronism. The best index to follow is the S&P 500.

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

– Eddy

P.S. If you want more info on our ETF, you can check out the ETF’s website.

Morning News: February 27, 2024
Posted by Eddy Elfenbein on February 27th, 2024 at 7:06 am

Japan’s Consumer Prices Grow at Slowest Pace in Nearly Two Years

German Consumer Confidence Ticks Up Despite Gloomy Outlook

Yellen Urges Israel to Restore Economic Ties to West Bank

Yellen Calls for Way to Use Frozen Russian Assets to Aid Ukraine

Biden Trade Chief Arrives at WTO Optimistic on Overhauling the Trade Forum

An Emboldened F.T.C. Bolsters Biden’s Efforts to Address Inflation

Fed Rate Cuts Are Likely to Be Slow — But Not Necessarily Steady

Hawkish Fed Impedes Regional Banks’ Efforts to Shed CRE Risks

Debt-Addicted Companies Look to Equity as Interest Costs Skyrocket

Warren Buffett Says the Stock Market Is Increasingly ‘Casino-Like’—and Young Investors Need to Remember This ‘One Fact of Financial Life’ to Avoid the Mess

Goldman Sachs Trades at a Discount. Here’s Why

BlackRock Says ‘New Regime’ Calls for More Active Management

Food Is Taking a Bite Out of Your Income. These Consumers Are Getting Creative

Housing Costs Are Running Hot, but Is the Data Missing a Cooling Trend?

Nvidia’s $70 Million Florida Supercomputer Hobbled by DeSantis Law

US Rebates For Energy-Efficient Appliances Are Coming, Finally

ZTE, China Network Maker Shares Rise After U.S. Allies Unveil 6G Principles

China’s EV Champion Is Coming for Your Gas Powered Cars, Too

Corner Offices Are Out; Collaboration Is In. Say Hello to the New Law Firm

Warehouse Boom Fades, and the Hopes of a California Region Fade With It

Chevron’s $53 Billion Deal for Hess in Jeopardy on Possible Exxon Challenge

Behind the Kroger-Albertsons Deal, a Pragmatic CEO With His Biggest Bet

Macy’s to Close 150 Namesake Stores, Grow Luxury Brands

Stephen Curry Is Battling the Clock to Win Over Sneaker Fans

Trump’s $540 Million Court Fine Tests His ‘King of Debt’ Title

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Morning News: February 26, 2024
Posted by Eddy Elfenbein on February 26th, 2024 at 7:03 am

Bank of England Builds ‘Proactive Case’ to Regulate Non-Banks

EU Adopts Euro Instant Payments Rules to Take on Visa, Mastercard

What Happened When Saudi Arabia Took its Money and Influence to Miami

Treasury Markets Are Losing Their Shock Absorber

Stocks Take a Breather at Start of Data-Rich Week

When High-Yield Savings Accounts Come With an Asterisk

China’s Quant Clampdown Risks Damaging Fragile Markets for Years

Jack Ma-Backed Ant Outbids Citadel Securities for Credit Suisse’s China JV

Goldman, Morgan Stanley Backstop Riskiest Slices of CLOs

Berkshire Set to Close In on $1 Trillion Valuation After Results

Risk Models Behind World’s Best Hedge Fund Strategy Are Getting a Lot Harder to Crack

Genesis Faces Unlikely Bankruptcy Foe: Its Own Parent Company

Cathie Wood Sells Into Nvidia Frenzy Again, Cuts TSMC Stake

AI Is Exploding Data Center Energy Use. A Google-Created Technique May Help

Top Global Energy Traders Face Multi-Billion Cash Quandary

Can a Tech Giant Be Woke?

AT&T Will Give $5 to Customers Hit By Cellphone Network Outage

Intuitive Machines Sinks on Concerns Lander Tipped on Moon

Tech Splits Ad Companies’ Fortunes in Two

BYD’s New $233,450 EV Supercar to Rival Ferrari, Lamborghini

Li Auto Forecasts Softer Sales After Posting Surge in Quarterly Revenue, Profit

Norfolk Southern Seeks to Thwart Activist With New Board Picks

Temu’s U.S. Entry Is an Orange Flag for Etsy

Adidas Is Dropping a New Batch of Controversial Yeezy Shoes on Digital Channels

Cigarettes Are Losing Their Hold on the Nicotine Fix

Giving Big, a California Couple Gets Gratitude and Scrutiny

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Morning News: February 23, 2024
Posted by Eddy Elfenbein on February 23rd, 2024 at 7:02 am

Oil Market Gets a Russian Lesson: Sell on the Sound of Cannons

Venezuela Calls in Oil Debt It Once Traded Away for Literal Beans

China’s Central Bank Tries to Catch Markets Off Guard With Surprise Easing

China Home Prices Slide, Increasing Pressure on Beijing

France Will Cut Spending as It Sees a Weaker Economy Ahead

German Business Sentiment Brightens Slightly, Despite Signs of Recession

ECB Can Afford Less Restrictive Stance From Summer, Simkus Says

U.S. to Impose Sanctions on More Than 500 Russian Targets

The Political Failure of Bidenomics

Top Fed Officials Bolster Case for Patient Stance on Rate Cuts

Wave of Cash Seen Washing Into Credit as Investors Seek Duration

Global Equity Funds See Outflows Amid Inflation Concerns

Record World Stocks Leave Bonds in Gloom

Fidelity Manager Dumps Nearly All Treasuries on Growth Optimism

What Companies Need to Know When Accounting for Leap Day

Student Loan Borrowers in Texas Get Biggest Share of Biden’s $1.2 Billion Forgiveness Plan

Nvidia Set to Top $2 Trillion Valuation in First for Chipmakers

Allianz Boosts Shareholder Returns After Profit Nearly Doubles

Deutsche Telekom Expects Adjusted Earnings Growth to Pick Up

Grab Targets Organic Growth, AI Tools in Path to Profitability

Are You Bleeding Money on Car Insurance? So Are Insurers

Vice’s New Owners Prepare to Slash What’s Left of Its Work Force

It’s a Great Deal, Before the ‘Drip Pricing’

When Science Class Is in a Former Macy’s

Émigrés Are Creating an Alternative China, One Bookstore at a Time

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Morning News: February 22, 2024
Posted by Eddy Elfenbein on February 22nd, 2024 at 7:04 am

Iran-Backed Houthis Prepare for Long Battle With US in Red Sea

New Freighters Could Ease Red Sea Cargo Disruptions

Japan Shares Open New Chapter as Nikkei Reclaims Its 1989 Peak

Quant Models Went Haywire as Chinese Stocks Crashed and Rallied

Leaked Files Show the Secret World of China’s Hackers for Hire

Mexican Economy Stalled as High Interest Rates Damp Demand

Why Huge European Central Bank Losses Matter

Many Americans Believe the Economy Is Rigged

T-Bills Without Tax Bills? This Fund Says It Cracked the Code

Warburg Pincus Hands Cash Back to Investors as Rivals Struggle

Goldman Sachs’s Chief Economist Has Nailed Big Calls. Here’s His Next One

KKR’s CRE Deal Pipeline Heats Up Amid ‘Year of Transactions’

Tech M&A Raises Fears Over Software Pricing, Bundling for CIOs

How Capital One’s $35 Million Discover Merger Could Affect Consumers

Nvidia To Top Meta Record With Nearly $250 Billion Value Jump

Nvidia Is a Must-Buy. Or Is It?

Lenovo Snaps Revenue Declines, Bets On AI-Powered Tech

The New Hot Climate Investment Is Heat Itself

Home Sales Likely Rebounded in January After Last Year’s Sharp Decline

Why Car Insurance Rates Are Soaring

Instagram’s Uneasy Rise as a News Site

One Business Decision Made the World’s Losing Battle With Malaria Even Tougher

Nestlé Warns on Sales Growth as Inflation Continues to Bite

Shoppers Want Uggs and Hokas. The Brands Are Boosting Growth for Their Owner

A Billionaire Bought a Chunk of Manchester United. Now He Has to Fix It.

A24’s Risky Hollywood Moment

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