Morning News: January 16, 2024
Posted by Eddy Elfenbein on January 16th, 2024 at 7:03 am

California’s Long-Embattled Ports Are Winning Back Imports

China Weighs More Stimulus With $139 Billion of Special Bonds

Global Regulators Set Out Blueprint to Bolster Markets Facing Stress

A Pessimist’s Guide to Global Economic Risks in 2024

Fed Tiptoes Toward Dialing Back Key Channel of Monetary Tightening

Rogoff Sees Six Fed Rate Cuts as ‘Pipedream’ If Economy Holds Up

Inside a Plan to Save Homeowners Hundreds of Dollars Closing Their Mortgages

AI Fever Takes Over Davos Pushing Crypto Aside as the New Cool Kid on the Block

ETFs Make Bitcoin’s Problems Even Worse

Supreme Court Fishing Case May Hobble Agency Power on Climate to Crypto

Goldman Tops Estimates as Stock Trading Surges Past Expectations

Morgan Stanley Wealth Unit Beats Forecasts as Traders Fall Short

PNC Financial Reports Drop in Net Income

Microsoft’s Nadella Wants Stability at OpenAI, Not Control

Europe’s Top Stock Rolls-Royce Gets Rare Sell Rating on Engine Worries

Boeing to Add Further Quality Inspections for 737 MAX

Elon Musk Pressures Tesla’s Board for Another Massive Payday

Elon Musk Seeks Greater Control Over Tesla Ahead of AI Advancements

The $65 Million Perk for CEOs: Personal Use of the Corporate Jet Has Soared

Burger King Owner to Buy Biggest Franchisee for $1 Billion

In the Ozempic Age, Has ‘Craveable’ Lost Its Selling Power?

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

The War Has Reined In Ukraine’s Oligarchs, at Least for Now

After 100 Days of War, Israel Is Not Backing Down

Turkey Relieved Despite Budget Deficit Blowout of Almost 900%

China Holds Key Rate as Economy Prepares for ‘Difficult Year’

ECB’s Holzmann Warns Rate Cuts Aren’t Guaranteed This Year

Europe’s Growth Engine Is Broken

Dubai Sales of $25 Million Homes Double as Global Elite Move In

Davos Elite Size Up the Global Risks of Another Trump Presidency

US Congress Unveils Temporary Spending Bill to Avert Shutdown

A Fight Over a Fishing Regulation Could Help Tear Down the Administrative State

The Businesses That Rescued America From Inflation, Recession, Lost Jobs

Bone-Chilling Cold Tests Power Grids From Texas to Alberta

California Has Dealt a Blow to Renewable Energy, Some Businesses Say

Flush With Investment, New U.S. Factories Face a Familiar Challenge

Robots Are Looking Better to Detroit as Labor Costs Rise

For Some Young People, a College Degree Is Not Worth the Debt

De Beers Cuts Diamond Prices to Revive Sales

Apple Offers Rare iPhone 15 Discount in China Amid Demand Fears

Apple to Shutter 121-Person San Diego AI Team in Reorganization

Boeing’s Legacy Vanished Into Thin Air. Saving It Will Take Years

A Few Words About Netflix’s Success: Vivid. Snappy. Tags.

Chiefs-Dolphins Playoff Game on Peacock Sets Records for U.S. Streaming and Internet Usage

‘Mean Girls’ Musical Triumphs at Box Office, With a TikTok Assist

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Morning News: January 12, 2024
Posted by Eddy Elfenbein on January 12th, 2024 at 7:03 am

Banks Lead Nigerian Stocks to World’s Second-Best Gains in 2024

Large Backers of Private Equity Are Asking For Their Money Back

JPMorgan Posts Record Net Interest Income and Predicts Even More for This Year

BofA Bond Traders Post Surprise Drop as Profit Slumps by Half

Citigroup Posts $1.8 Billion Fourth-Quarter Loss After Litany of Charges

Wells Fargo Posts Higher Fourth-Quarter Profit, Helped by Higher Interest Rates and Cost Cutting

Grayscale Faces New Risk-Management Challenge With Bitcoin ETF Approval

BlackRock Buys Infrastructure Firm GIP for $12.5 Billion

Companies Are Still Cutting White-Collar Jobs

What America’s Relocation Boom Means for Election 2024

$6 Trillion in Taxes Are at Stake in This Year’s Elections

America’s Gas Bonanza Brings Biden New Political Dilemmas

‘Remarkable’ Surge in Auto Insurance Costs Fans US Inflation

Tesla to Halt Production in Germany as Red Sea Conflict Hits Supply Chains

Hertz Will Shrink Electric Fleet After Being Burned by Tesla’s Price Cuts

Delta Air Walks Back 2024 Profit Goal on Higher Costs, Wages

$1.2 Trillion US Travel Industry Is Plummeting, Says New Study

Costco’s New China Store Triggers Shopping Frenzy on Opening Day

The Billionaires Spending a Fortune to Lure Scientists Away From Universities

Removal of Netflix Film Shows Advancing Power of India’s Hindu Right Wing

Peacock Enters Uncharted Waters by Streaming N.F.L. Playoff Game

How Belichick Helped Patriots Go From Laughingstock to Economic Powerhouse

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Morning News: January 11, 2024
Posted by Eddy Elfenbein on January 11th, 2024 at 7:02 am

World Trying to Quit Fossil Fuels Gets Flood of Gas Instead

Oil Tanker Hijacked Off Oman Forced to Alter Course to Iran

Chesapeake, Southwestern to Merge as New Gas Behemoth

Biden Hands Out $623M to Build Out US-Wide EV Charging Network

China’s Solar Dominance Faces New Rival: An Ultrathin Film

What’s at Risk as Half of the World’s GDP Heads Into an Election Year

Brexit’s Aftershock: The Economic Hit From Leaving the EU

US CPI Report to Show Soft Core Inflation After Goods Prices Slide

December Inflation Report: Price Rises Expected to Remain Moderate

Effort to Revamp I.R.S. Faces Challenges Despite Funding Infusion

Bitcoin Heads to Wall Street. Now What?

Bitcoin Volume Jumps as US Spot ETFs Tied to Token Begin Trading

Goldman Traders Ride ‘Rallying Cry’ to Dethrone Morgan Stanley

Citigroup’s Jane Fraser Embarks on Another Pivotal Year of Bank Cuts

Blackstone Taps Two Firm Veterans to Help Oversee Trillion-Dollar Asset Pile

How AI Replaced the Metaverse as Zuckerberg’s Top Priority

No, That’s Not Taylor Swift Peddling Le Creuset Cookware

U.S. Diet Panel Adds Another Researcher With Alcohol Industry Ties

New Weight-Loss Drugs Like Wegovy Will Supercharge Pharma Revenue

‘Gas-Station Heroin’ Sold as Dietary Supplement Alarms Health Officials

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Morning News: January 10, 2024
Posted by Eddy Elfenbein on January 10th, 2024 at 7:00 am

Xi’s Empty Dream City Shows Limits of His Power, Even in China

How the War With Hamas Has Damaged Israel’s Tech Firms and Economy

Importers Face Surging Shipping Costs, Delays as Red Sea Diversions Pile Up

This Inflation Measure Is Running Hot. It’s Probably Wrong

US Inflation Is Set to Fade in 2024 as Goods Prices Keep Falling

Top US Banks Eager for Relief From Rate Pressure After Fed Hikes

The Big Bitcoin Tease

SEC’s X Account Hacked to Falsely Say Bitcoin ETF Approved

The Bond Market Rally Is Overlooking a Soaring $2 Trillion Debt Problem

Global Activist Investors Pressed Companies to Sell or Spin in 2023 as M&A Dropped Off

Mortgage Rates and Inflation Could Draw Attention to the Fed This Election

Elections and Disinformation Are Colliding Like Never Before in 2024

Trumponomics 2.0: What to Expect If Trump Wins the 2024 Election

The Class of 2024 Gets Ready for the Real World

Boomer Retirement Bomb

Nu Mexico to Roll Out Enhanced App to Receive Money From the US

The Next Front in the U.S.-China Battle Over Chips

Microsoft Debates What to Do With A.I. Lab in China

Equinix Raises Debt Abroad to Clip Interest Costs

BMW Converts Century-Old German Plant to Only Make Electric Cars

Vietnam’s VinFast Aims to Qualify for Biden’s EV Tax Credits

Boeing CEO Says Company Needs to Acknowledge ‘Our Mistake’

Unstoppable in Red

Brick-Filled Boxes. Bogus Receipts. Retailers Battle Fraudulent Returns

Is America’s Ultra-Processed Diet That Bad? Big Food Fights Back

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CWS Market Review – January 9, 2024
Posted by Eddy Elfenbein on January 9th, 2024 at 8:07 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.”)

Wall Street Gets Off to a Slow Start for 2024

The stock market is off to a somewhat slow start this year. Last week, the S&P 500 snapped a nine-week winning streak. The index has now closed lower in five of the past seven sessions.

In reality, the current market action is closer to how we should expect markets to act, at least in the near-term. What was unusual about this market was the furious rally that closed out last year.

As late as mid-October, last year was looking to be a fairly standard year for investors. However, once it became clear that the Fed was done with its interest rate hikes, stocks started to rally. In less than two months, the S&P 500 jumped 16%.

As we got to the finish line for 2023, many of those prominent growth stocks and riskier “high-beta” stocks lagged the market. This trend lasted into the first few days of 2024 but has since reversed.

Q4 Earnings Season Is About to Begin

There are two events to look out for this week. The first will be on Thursday when the government releases the inflation report for December. For the most part, inflation has been better behaved, but I don’t want to call victory too soon. Older investors will remember how inflation kept coming back in the 1960s and 70s. In fact, each peak got progressively higher.

The other event will be the start of Q4 earnings season. This is unofficial, but on Friday, several major Wall Street banks and financial institutions will tell us how well they did during the final quarter of 2023.

Some of the financial institutions due to report on Friday include Bank of America (BAC), Bank of New York Mellon (BK), BlackRock (BLK), JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC).

Overall, this looks to be a rather sluggish quarter for earnings growth. According to the latest numbers, Wall Street expects Q4 earnings growth of 1.82% for the S&P 500. That’s down from 2.85% from one month ago.

Within industry sectors, analysts expect 15.80% growth from Consumer Discretionary. That’s up from 13.52% from one month ago. For Tech, analysts have raised their estimate from 14.74% growth from one month ago to 15.08% now.

The big loser is the Energy sector. Profits for Energy are expected to fall 26.94%. As bad as that is, it’s dropping. One month ago, analysts had been expecting Energy’s profits to fall by 23.42%.

The first of our Buy List stocks to report will probably be in about two weeks. I’ll caution you that companies often need a little more time to compile their Q4 earnings reports compared with the other three quarters.

Don’t get worried if a company needs a little extra time. If a company reports its Q1 earnings on, let’s say, April 27, you can most likely expect its other earnings to be around July 27 and October 27, but the Q4 report may be a week or so after January 27.

The U.S. Economy Added 216,000 Jobs in December

Last Friday, the government said that the U.S. economy added 216,000 net new jobs last months. That was much better than expectations. Wall Street had been looking for an increase of 170,000 new jobs. The unemployment rate held steady at 3.7%. Wall Street had been expecting it to rise to 3.8%.

While the jobs numbers for December were decent, the jobs gains for October and November were revised lower to 173,000 and 105,000, respectively.

The U-6 rate, which is a wider measure of joblessness, increased to 7.1%. The labor force participation rate (LFPR) fell 0.3% to 62.5%. That number is now at its lowest point since February.

The labor force participation rate had been improving for several months. The problem with the LFPR is that it can be distorted by demographic factors. For example, more retirees will drive down the LFPR. If we look at it just for folks in the prime working-age category (25 to 54), then the LFPR is close to a 20-year high.

Perhaps the most important stat in the jobs report is average hourly earnings. Last month, average hourly earnings rose by 0.4%. That’s good, but I hope to see better. Over the last year, average hourly earnings are up by 4.1%. The problem is that so much of the wage gains have been eaten up by inflation.

One of the problems with this jobs report is that the job gains have been concentrated in a few areas while important sectors of the economy have actually seen job losses:

The December hiring boost as reflected in the Labor Department report came from a gain of 52,000 in government jobs and another 38,000 in health care-related fields such as ambulatory health-care services and hospitals. Leisure and hospitality contributed 40,000 to the total, while social assistance increased by 21,000 and construction added 17,000. Retail trade grew by 17,000 as the industry has been mostly flat since early 2022, the Labor Department said.

On the downside, transportation and warehousing saw a loss of 23,000.

For the year, the U.S. economy added 2.7 million jobs. That’s a noticeable drop off from 4.8 million in 2022.

The Federal Reserve meets again at the end of this month, and again, I don’t expect to see any changes to interest rates. The March meeting is a different story. Currently, the futures market thinks there’s a 64% chance that the Fed will cut rates. That’s down a bit from the odds before the jobs report.

Later this month, we’ll get the initial report on Q4 GDP growth. The Atlanta Fed’s GDP Now model said that the economy grew at a real, annualized rate of 2.2% for Q4.

The End of the Month Effect

One of my peculiar habits is that I maintain a very large database of historical market stats. For example, I have every closing for the Dow Jones Industrial Average since the index was birthed in 1896. That’s more than 30,000 data points.

At the end of each year, I update all the numbers. I then slice and dice the numbers several different ways to see how the market has performed historically. (I know…I need a better hobby.)

Today I wanted to share with you one of the more fascinating results I got which is the end-of-the-month effect. Very simply, all of the stock market’s gains over the last 13 decades have come on the first and last days of each month. The rest of the month has been net flat.

Make no mistake. I’m not advocating for some kind of trading strategy to try and profit from the end-of-the-month effect. I’m still a buy-and-hold guy, but I find the effect fascinating.

I took all the numbers and squished them together to show you what the average month has looked like for the DJIA since 1896. Here it is:

I used the days of January as a placeholder for the horizontal axis, and I started the series at 100 at the start of the month. On average, the Dow has gained 0.650% each month.

During the first six days of the month, the Dow has had an average gain of 0.615%. During the rest of the month, the Dow has eked out a miniscule 0.035%.

If we dig a little further, we see that the Dow has lost an average of 0.216% by investing from the 6th to the 25th of each month. That’s roughly one-third of the entire monthly gain. From the 25th to the 6th, the Dow has gained an average of 0.867%.

What causes this? I’m not certain, but I’d guess that that’s when investors have gotten new money to add to stocks. It’s amazing that 130 years of data shows such a large impact from the calendar.

That’s all for now. The stock market will be closed on Monday in honor of Dr. Martin Luther King’s birthday. He would have been 95 years old. 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: January 9, 2024
Posted by Eddy Elfenbein on January 9th, 2024 at 7:07 am

On Board a Ship Sailing the World’s Most Dangerous Shipping Lane

Xi, Biden and the $10 Trillion Cost of War Over Taiwan

Lawmakers Push U.S. to Consider Trade Limits With A.I. Giant Tied to China

China Says It Cracked Apple AirDrop to Identify Message Sources

Bill Gross Casts Shade on Treasuries, Sees 10-Year ‘Overvalued’ at 4%

‘Market’s Wrong, I’m Not’: Mike Mayo Loves Playing a Provocateur

Blackstone’s First Private Equity Fund for Rich Individuals Gets $1.3 Billion

The Latest Dirty Word in Corporate America: ESG

50 Companies to Watch in 2024

Consultancy Bain & Company Names New Global CEO

Startup Founders Fret Over Getting Fired Like Sam Altman

Microsoft’s OpenAI Ties Face Potential EU Merger Probe

SandboxAQ Buys Good Chemistry, Melding AI and Quantum Tech for Drug Discovery

Goodyear Unveils Plans for an EV Future With New Tires at CES

Chinese Billionaire Is Second-Biggest Foreign Owner of US Land

Boeing’s Max 9 Crisis Deepens

How Astronomers Are Saving Astronomy From Satellites — For Now

What You Can Learn About Job-Hunting From Dating Apps. Really.

New Biden Administration Rule Seeks to Make More Gig Workers Employees

In the N.F.L. and at Big Companies, Diversity Playbooks Face Hurdles

When ‘Contemporary Issues’ and Campus Politics Collide

PepsiCo, Grocery Giant Bicker Over Who Dumped Whom

As Retailers Cite Rising Theft and Shrinkage, Analysts Want More Details

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Morning News: January 8, 2024
Posted by Eddy Elfenbein on January 8th, 2024 at 7:05 am

Fed Pivot Will Dominate Year of Rate Cuts in Turn of Global Cycle

Private Equity’s Horrible, No-Good ’23 Set to Continue Into ’24

Nation’s Top Economists Are Short-Term Happy, Long-Term Glum

New Year Market Funk Sees 5-Day Blues

Hedge Funds Dump Tech, Consumer Stocks at Start of Year

BlackRock, Ark File Amended Forms in Final Push for Bitcoin ETFs

Buying Home and Auto Insurance Is Becoming Impossible

Can Retirees Keep Splurging? Don’t Count on It

Robots Learn, Chatbots Visualize: How 2024 Will Be A.I.’s ‘Leap Forward’

Japanese Company’s Bid for U.S. Steel Tests Biden’s Industrial Policy

Boston Scientific To Acquire Axonics For About $3.7 Billion

Merck Is in Advanced Talks to Buy Cancer Drugmaker Harpoon Therapeutics

First Flight of the Vulcan Rocket Sends an American Lander Toward the Moon

Elon Musk’s Drug Use Is the Latest Headache for Tesla’s Board

Boeing Max 9 Jets Remain Grounded as Airlines Await Inspection Instructions

Investors Bail on Boeing Following Max 9 Grounding

Shell Flags Earnings Hit of Up to $4.5 Billion From Impairments

The Cable Company That Wants to Take the Pain Out of Streaming

Everyone Wants a Piece of the NBA’s New National TV Contract

The Woman Shaking Up the $50 Billion Instant-Ramen Industry

Abercrombie Raises Outlook After Women’s Business Boosts Sales

Lululemon Lifts Outlook on Solid Year-End Activewear Sales

How Harvard’s Board Broke Up With Claudine Gay

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Morning News: January 5, 2024
Posted by Eddy Elfenbein on January 5th, 2024 at 7:02 am

Eurozone Inflation Rose Less Than Expected, Keeping Rate-Cut Talk on Track

Investors Kick Off 2024 with $123 Billion Record Cash Shift

Investors Flee to US Money Market Funds on Caution as Rate Cut Optimism Cools

Economist Alberto Musalem Named Next President of St. Louis Fed

Troubled China Shadow Bank Zhongzhi Files for Bankruptcy

Haidar Overhauls Macro Hedge Fund Trades Amid Record 43% Plunge

Red Sea Attacks Menace Energy Tankers but Don’t Stop Them

Exxon Mobil Expects Up to $2.6 Billion in Upstream Impairments

US Jobs Report to Show Hiring Concentrated in Only a Few Sectors

Apple’s Ugly 2024 Start Puts Most-Valuable Stock Title at Risk

Netflix Considers Ways to Make Money From Videogames in Possible Pivot

How China’s BYD Beat Tesla at Its Own Game

Driverless Truck Companies Plan to Ditch Human Copilots in 2024

Late M&A Bonanza Stokes Healthcare Dealmakers Ahead of JPMorgan Conference

Ozempic Mania’s Billions in Bills Are Coming for US Taxpayers

Starbucks Faces New Pressure Over Union Campaign

Major French Retailer Drops PepsiCo Products Over High Prices

Gen Zers Who Want the Buzz But Not the Hangover Are Fueling a Nonalcoholic Spirits Boom

Tepper’s $2 Billion Hedge Fund Payday Marred by NFL Meltdown

Victor Wembanyama Sets Course to Become a Basketball Billionaire Unlike Any Other

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Morning News: January 4, 2023
Posted by Eddy Elfenbein on January 4th, 2024 at 7:04 am

Germany Cut Gas Imports By a Third in 2023

In Europe, Trains Are Full, and More Are on the Way

Citi Targets China Investment Bank Unit Launch, 30 New Hires By End 2024

Wall Street’s Ambitions in China Run Into a Rising Firewall

Wall Street Is Already Cutting Oil-Price Forecasts for This Year

APA to Buy Callon Petroleum in $4.5 Billion Deal

How Supply-Chain Snarls Made Everyone Wrong on Inflation

Fed Minutes Showed Officials Feeling Better About Inflation

The Hidden Force Pushing Mortgage Rates Down

Why Companies Still Aren’t in a Firing Mood

U.S. Awards Chip Supplier $162 Million to Bolster Critical Industries

Apple Hit With Second Downgrade This Week as iPhone Worries Grow

U.S. Auto Sales Bounced Back in 2023

EV Startup Fisker Ditches Tesla-Style Direct Sales Model

Billionaire Space Battle Heats Up as Bezos Eyes SpaceX Rival

SpaceX Illegally Fired Workers Critical of Musk, Federal Agency Says

Clorox’s Future Depends on Winning Your Cat’s Litterbox

Jeff Zucker’s Latest Bet: Prestige TV

Big Fashion Still Hasn’t Figured Out How to Pay a Living Wage

How the Push for Diversity at Colleges and Companies Came Under Siege

Just a Billion Doesn’t Cut It on This Exclusive Florida Island

Pop-Tarts’ Devoured Mascot May Live to Be Eaten Again

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