Morning News: November 14, 2023
Posted by Eddy Elfenbein on November 14th, 2023 at 7:04 am

Argentina’s Election Isn’t Just High Stakes for Argentina — But for China, Too

China Mulls $137 Billion of New Funds to Aid Housing Market

The Rise and Fall of the World’s Most Successful Joint Venture

Why Xi Can No Longer Brag About the Chinese Economy

Elon Musk and Jane Fraser Among CEOs Wooing Xi Jinping

US Inflation Report to Keep Fed Leaning Toward More Rate Hikes

US Bank Regulators to be Grilled by Congress on Capital Hike Plan

UBS Predicts Tricky Start to 2024 for Emerging Market Assets

UBS Climate Change’s $150 Billion Hit to the U.S. Economy

How Wall Street Makes Millions Selling Car Loans Customers Can’t Repay

Bankers Brace for Smaller Bonuses With No Relief Seen Next Year

CEOs Aren’t Hearing A Lot of ‘Great Quarter, Guys’ This Earnings Season

With Interest Rates Above 9%, Small Businesses Slam the Brakes

Rolex, Patek Prices Hit Fresh Two-Year Lows: Subdial Index

Facing Financial Ruin as Costs Soar for Elder Care

How Microsoft’s Legal Legacy Shapes the Antitrust Case Against Google

What Google Argued to Defend Itself in Landmark Antitrust Trial

Glencore Wins Teck Coal Business, Paving Way for Its Own Split

Fisker Shares Fall More Than 10% After EV Startup Cuts Production Target

Home Depot Sales, Earnings Fall but Top Analyst Estimates

Insider Co-Founder Henry Blodget Steps Down as CEO Amid Strategy Shift

Can Tequila Really Go Global? This Booze Boss Is Giving It a Shot

Be sure to follow me on Twitter.

Morning News: November 13, 2023
Posted by Eddy Elfenbein on November 13th, 2023 at 7:03 am

Italy Faces Barriers to Obtain About €90 Billion in EU Funds

Greece Starts Process to Sell 20% Stake in National Bank

Indian Students Flock to US Colleges, Offsetting Drop From China

What’s at Stake in the Biden-Xi Meeting

What It Took to Get Biden and Xi to the Table

Goldman Sachs, Morgan Stanley Diverge on Fed Rate-Cut Forecasts

Morgan Stanley Sees Bullish Opportunities for US Assets in 2024

Talent Agency CAA and Michael Klein Launch Sports and Media Investment Bank

Inside Wall Street’s Scramble After ICBC Hack

Mint, the Budgeting App, Is Going Away. Here Are Some Alternatives

Health Insurance Is About to Boost US Inflation

Vermont May Be the Face of a Long-Term U.S. Labor Shortage

The Low-Wage Pay Surge Is Over, Threatening the Consumer Boom

Home Depot and Lowe’s Face Slump From Higher Rates and Housing Prices

The ‘Georgists’ Are Out There, and They Want to Tax Your Land

Los Angeles Mansion Owners Test $150,000 Rents as Sales Slump

China’s Spending on Green Energy Is Causing a Global Glut

Polluting Industries Say the Cost of Cleaner Air Is Too High

Electricity Use Booms in Texas, a Harbinger for the Country

Exxon Makes Lithium Play in Long-Term Bet on EV Demand

The Diamond World Takes Radical Steps to Stop a Pricing Plunge

Novo Shares Rise After Wegovy Demonstrates Heart Benefit in Trial

Target Tries to Find Its Mark After Year of Misfires

Be sure to follow me on Twitter.

Morning News: November 10, 2023
Posted by Eddy Elfenbein on November 10th, 2023 at 7:04 am

China Is Making Too Much Stuff—and Other Countries Are Worried

India’s Factory Output Slows in September on Weak Demand

Delhi Could Use Artificial Rain to Subdue World’s Most Toxic Air

How Power Companies Profited From Italy’s Covid Lockdown

U.K. Economy Stagnates as High Interest Rates Take Toll

RBA Revises Up Near-Term Inflation Forecasts, Warns Inflation More Persistent

Even if the Fed Stays on Hold, Jerome Powell Is Keeping His Options Open

US Bond Funds Rack Up Biggest Weekly Inflow In Three Months

IRS Announces New Income Tax Brackets for 2024

Citigroup Resumes Retail Banking Sale in Poland – Bank Handlowy CEO

Mark Mobius Plans to Step Back From Mobius Capital Partners

It’s Boom Times for Startups Trying to Electrify Aviation

Personalized A.I. Agents Are Here. Is the World Ready for Them?

Man vs. Musk: A Whistleblower Creates Headaches for Tesla

Amazon’s New Approach to Selling Enterprise Software? In-Person Demos

Apple Agrees to $25 Million Settlement with US Over Hiring of Immigrants

Sleep Number’s ‘Drastic Miss’ Resulted in Drastic Marketing Measures

Las Vegas Strike Averted as Wynn Resorts Rounds Out Labor Deals

An Opioid-Like Drink Is Masquerading As a Wholesome Alcohol Alternative

Be sure to follow me on Twitter.

Morning News: November 9, 2023
Posted by Eddy Elfenbein on November 9th, 2023 at 7:04 am

‘No One Is Safe From Climate Change’ After Hottest 12 Months Ever Recorded

Why Are Oil Prices Falling While War Rages in the Middle East?

Rage Against Copper Producer Roils Markets, Panama Government

The $2 Million Coal Mine That Might Hold a $37 Billion Treasure

The Electric-Car Era Needs a Lot of Really Big Trees

Heat Pump Installations Slow, Impeding Biden’s Climate Goals

China’s Consumer Deflation Returns as Recovery Remains Fragile

‘Dark Matter’ Bond Metric Mesmerizes Wall Street and Washington

Austan Goolsbee Says Fed Will Need to Monitor Risks of Overshooting on Rates

Citadel’s Ken Griffin Says High Inflation Will Last for Decades

Apple Risks $14 Billion Tax Bill in Setback at Top EU Court

A Man, a Van, a Plan: Twitch CEO Seeks to Charm Angry Streamers

US Veterans Got a Mortgage Break. Now They’re Losing Their Homes

SoftBank Posts $6.2 Billion Loss After WeWork Bankruptcy

WeWork’s Bankruptcy Tests Claims of a Co-Working Revolution

How Work From Home Has Reshaped What Americans Buy

New Ozempic Rival Is About to Make Your Weight Loss Drugs Cheaper

Disney Is in Trouble. Bob Iger Has 5 Big Problems to Solve

Disney Wears Its New Look Well

Hollywood Studios, Actors Tentatively Agree to New Contract

Getting Hollywood Back Up and Running Won’t Be Easy

Be sure to follow me on Twitter.

Morning News: November 8, 2023
Posted by Eddy Elfenbein on November 8th, 2023 at 7:04 am

Russian Banks Could Make Record Profits in 2023

Russia to Keep Grain Export Quota High After Another Bumper Crop

How Nestle Factories Keep Running in a Country Torn by Putin’s War

War, Inflation and Hints of Optimism Dominate New Economy Forum

Fed Governor Lisa Cook Says Worsening Geopolitical Tensions Pose Market Risk

Why the Fed Shouldn’t Get Credit for the Fall in Inflation

Private Equity Showers Junior Staff With Rewards to Retain Talent

EV Market’s Surge Toward $57 Trillion Sparks Global Flashpoints

A New Law Supercharged Electric Car Manufacturing, but Not Sales

Rivian Plans to Make More EV Trucks, SUVs in 2023

California Ranks First in Climate-Friendly Transportation Investments

Biogen Lowers 2023 Earnings Guidance on Costs of Reata Purchase

Gilead Sciences Results Beat Estimates

Robinhood Misses Q3 Revenue Estimates on Muted Trading Activity

Meta to Require Political Advertisers to Disclose Use of A.I.

In Regulating A.I., We May Be Doing Too Much. And Too Little

Seeking to Land Punches on Amazon, the FTC Is Punching Itself

WeWork Is Bankrupt—And SoftBank’s Losses Are $14 Billion and Counting

Mark Zuckerberg Taps the Strengths of WhatsApp

Rockstar Plans to Announce Much Anticipated ‘Grand Theft Auto VI’

A ‘Zelda’ Movie Could Mint Money for Nintendo

The City That Learned to Be Proud That It SUX

Be sure to follow me on Twitter.

CWS Market Review – November 7, 2023
Posted by Eddy Elfenbein on November 7th, 2023 at 10:25 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.”)

Seven Up Days in a Row

The stock market is suddenly hot again. The S&P 500 rose for its seventh day in a row today. This is the longest winning streak in two years. Over those seven days, the index has gained 6.3%. The S&P 500 is now above its 50- and 200-day moving averages.

Six-day rallies are pretty common but getting to a seventh up day has historically been a challenge for the market.

I urge investors to remain skeptical of sharp upticks in a bear market. The stock market loves to fool investors by convincing us that things are safe. Then, once we take the bait, we get slammed by another downdraft.

Interestingly, economically cyclical stocks have been lagging during this mini bull run. In particular, materials, energy and industrial stocks have not joined in the fun. That usually happens when the economy is weak or perceived to be losing strength.

Here’s an interesting chart. This shows the S&P 500 (black) compared with the S&P 500 Industrials (blue) and S&P 500 Materials (green).

Notice how the two cyclical sectors have lagged the S&P 500, and it’s gotten worse in recent days. These rotations typically end once the Fed starts lowering rates. That may not be too far away.

Clorox Soars on Earnings Beat

Last week, I highlighted Clorox (CLX) for you. I told you that it was about to report earnings after the close on Wednesday.

In the earnings report, the company said it made 49 cents per share for its fiscal Q1. That was a massive earnings beat.

Wall Street had been expecting Clorox to report a loss of 22 cents per share. The company was hit with a nasty cyberattack which scared investors. Its business was hit hard but it will survive.

On Thursday, the stock soared as much as 11% during the trading day before closing with a gain of 6.6%. Clorox has continued to rally since then. On Friday, Monday and today, Clorox gained another 7.7% combined. Add it all up and that’s a 14.9% gain in just four trading days.

Clorox slashed its full-year earnings guidance to a range of $4.30 to $4.80 per share. The old range was $5.60 to $5.90 per share. That stings, but Clorox will move on and remain profitable.

I wish I could take credit for having predicted the big gain for Clorox, but that’s not accurate. Instead, I told you to steer clear of Clorox and to wait and see if the company has addressed its problems. Again, the key is to determine how fixable a company’s problems are. With Clorox, the problems seem to be fixable.

So I won’t take credit for the big gain, but I will stand by the strategy of waiting for good stocks to falter. It’s not hard, but it requires patience and discipline. Clorox is about as blue as a blue chip can get. It’s raised its dividend for 21 straight years.

An analyst at Citigroup said, “Clorox’s reduced FY24 guidance looks conservative, and that it expects Clorox to fully recover from the cyberattack by the end of FY25, adding that a 30% selloff since August makes the stock compelling.” I agree.

WeBroke

Of course, just because a stock is down doesn’t mean it’s cheap. It only means that it’s less expensive than it was before. That brings me to the sad story of WeWork (WE), the office space-sharing company. WeWork filed for bankruptcy today. That wasn’t unexpected.

The WeWork story is almost comically inept. Apple TV made a miniseries about it with Anne Hathaway and Jared Leto.

Few companies have gone from superstars to bust in such a short time. At one point, WeWork was worth $47 billion. The company tried to go public, but the offering was canceled.

It filed “sloppy” filing documents. In its S-1 document, WeWork wrote, “We are a community company committed to maximum global impact. Our mission is to elevate the world’s consciousness.”

I’m not kidding you. It really says that.

WeWork eventually went public in 2021. The company’s CEO, Adam Neumann, received a lot of attention for his unorthodox management style. Two years ago, WeWork was going for $400 per share. Before trading in WeWork was halted, it got down to 85 cents.

WeWork was a celebrated tech startup, but in reality, it was a real estate company that got tangled up in too many expensive lease agreements. The company rented office space, then retrofitted it and subleased it to startups and freelancers. At one point, WeWork was the largest tenant in Manhattan.

As long as interest rates were low, the idea worked. Once rates started to rise, then things changed. Soon, the company hemorrhaged money. A few months ago, it announced a 1-for-40 reverse stock split. The stock is down 98% in this year alone. So much for the world’s consciousness.

Not a Great Jobs Report

Last Friday, we got the October jobs report from the Labor Department. According to the government, the U.S. economy created 150,000 net new jobs last month. That was below expectations for 170,000 new jobs, and the gain was nearly half the gain we had in September.

The unemployment rate increased to 3.9%. That’s its highest level since January 2022. Here’s a look at the unemployment rate. Note that historically, when the unemployment rate goes up by a little, there’s a good chance that it will go up by a lot.

The broader U-6 unemployment rate increased to 7.2%. The labor force participation rate declined slightly to 62.7%.

Right now, the most important stat is wages, and that’s not looking very good. Last month, average hourly earnings rose by 0.2%. That was 0.1% less than expected. Over the last year, average hourly earnings are up 4.1%. Unfortunately, inflation has taken a large bite of that.

From a sector standpoint, health care led with 58,000 new jobs. Other leading gainers included government (51,000), construction (23,000) and social assistance (19,000). Leisure and hospitality, which has been a top job gainer, added 19,000 as well.

Manufacturing posted a loss of 35,000, all but 2,000 of which came because of the auto strikes. Transportation and warehousing saw a decline of 12,000 while information-related industries lost 9,000.

The important takeaway from this report is that it will take some heat off the Federal Reserve. The futures market currently thinks there’s less than a 10% chance that the Fed will hike next month. How things have changed! One month ago, the odds were at 36%. Futures traders now think the odds are in favor of the Fed cutting rates in less than six months. If that’s right, we could be in store for a sector rotation soon.

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: November 7, 2023
Posted by Eddy Elfenbein on November 7th, 2023 at 7:02 am

China’s Exports Tumble Again in Fresh Sign of Economic Trouble

China’s Banks and Property Sector Threaten a Growing Economy

UK Government to Focus on Curbing Inflation, Not Boosting Spending – King’s Speech

UK Antitrust Regulator to Take on Big Tech with New Legal Power

Australia Thought It Was Done Raising Interest Rates. It Wasn’t.

Fed’s Neel Kashkari Not Convinced Rate Hikes Are Over

Wall Street Bosses See Financial Dangers Everywhere

How Goldman Sachs Is Navigating A More Turbulent World

Private Equity Courts a Growing Class of Mini-Millionaires

UBS Group Swings to Net Loss as Credit Suisse Costs Weigh

WeWork Goes Bankrupt, Signs Pact With Creditors to Cut Debt

SoftBank Makes Another Bet on WeWork, Hoping Landlords Will Too

Uber Posts Revenue That Misses Estimates on Accounting Change

More Laid-Off Workers Got Severance During the Pandemic, But That’s Over Now

Lavish Tax Credits and Trade Protections Lure Solar Firms to U.S.

Saudi Aramco Profit Falls on Lower Oil Prices, Volumes

The Fuel of the Future May Rely on Developing Oilier Soybeans

EV Makers Turn to Discounts to Combat Waning Demand

Russians Lose Taste for Suddenly Pricey Dubai Property

In Uruguay, a Tax Haven With Lots of Beaches and Little Crime

X CEO Linda Yaccarino Leans on TV Roots to Bring Back Jittery Advertisers

Elon Musk’s Brain Implant Startup Is About to Start Cutting

Hungry (but Not for Human Contact), Americans Head for the Drive-Through

Be sure to follow me on Twitter.

Morning News: November 6, 2023
Posted by Eddy Elfenbein on November 6th, 2023 at 7:04 am

How Russia Games Oil Sanctions for Big Profits

More Semiconductors, Less Housing: China’s New Economic Plan

China’s First Deficit in Foreign Investment Signals West’s ‘De-Risking’ Pressure

Treasury Secretary Yellen to Hold Economic Talks With Chinese Counterpart

South Korea Stocks Surge More Than 5% for Best Session Since March 2020 After Short-Selling Ban

Voters Aren’t Believing in Bidenomics

Biden Awards $16.4 Billion for Northeast Corridor Rail Upgrades

SEC Rule to Speed Trades Puts $1 Trillion of ETFs at Risk

Hedge Funds Catapulted Treasury Shorts to Record at Wrong Time

BlackRock’s Boivin Says High Rates Still a Threat to Stock Rally

Brookfield Raises $26 Billion on Oaktree, Infra Fund Strength

Warring Billionaires, a Rogue Employee, a Divorce: One Hedge Fund’s Tale of Woe

Why Banks Are Suddenly Closing Down Customer Accounts

EY Lays Out U.S. Governance Overhauls After Failed Split

CapVest to Buy Industrial Chemicals Firm Recochem From H.I.G.

Tech Start-Ups Try to Sell a Cautious Pentagon on A.I.

Big Pharma Wants to Use AI to Increase Diversity in Clinical Trials

AI Pioneer Kai-Fu Lee Builds $1 Billion Startup in Eight Months

German Giants Pour Over $500 Million Into AI Startup Aleph Alpha

Legislators Aim to Help Celebrities and Consumers Fight Deepfake Scam Ads

Another Google Antitrust Battle Reaches Court in Epic Games Case

Google Play Trial to Test Alphabet’s App Marketplace Power

Job Action Against Tesla Puts Sweden’s Unions in Spotlight

The Workers Who Make Your Clothes Want Higher Pay. Who Should Pony Up?

The New Headache for Bosses: Employees Aren’t Quitting

Be sure to follow me on Twitter.

Morning News: November 3, 2023
Posted by Eddy Elfenbein on November 3rd, 2023 at 7:02 am

Panama Canal Traffic Is Being Throttled by Climate Change Impact

Maersk Slumps After Forecasting Weak Global Trade Until 2026

China Foreign Investment Gauge Turns Negative For First Time

In the Long Run, Investing Is All About the Economy*

US Money Market Funds Draw Biggest Weekly Inflow in Seven Months

Ruin: Money, Ego & Deception at FTX

Sam Bankman-Fried Convicted of Fraud in Stunning FTX Crash

Cathie Wood Says Bitcoin Is ‘Digital Gold’ as Deflation Hedge

Buffett’s Berkshire Poised for Boost as Rates Burnish Cash Pile

Macquarie’s First-Half Profit Falls, to Launch Up to A $2 Billion Buyback

US October Jobs Report to Mark End of Blowout Payroll Gains

UAW’s Fain Sees ‘Ugly’ Labor Strife Ahead at Ford Battery Plants

How ‘Salts’ Get Into Labor Movements

Apple’s Disappointing Outlook Spotlights Growing China Woes

Walgreens Is Cancelling Corporate Bonuses as Big Pharmacies Face Increasing Difficulties

Junk Food’s $30 Billion Opening Is India’s Next Health Crisis

Restaurant Brands Revenue Disappoints Wall Street as Burger King Same-Store Sales Miss Estimates

Shoppers Keep Splurging on Little Luxuries Like Starbucks, Fried Chicken

Americans Are Walking 36% Less Since Covid

Fall Auctions Woo Rich Bargain Hunters With $2.5 Billion in Art

N.F.L., on Lookout for Growth, Finds Open Arms in Germany

Why the Jet Stream Is Helping Some International Flights Arrive Early

A Giant Leap for the Leap Second. Is Humankind Ready?

Be sure to follow me on Twitter.

Morning News: November 2, 2023
Posted by Eddy Elfenbein on November 2nd, 2023 at 7:04 am

These Five Countries Are Key Economic ‘Connectors’ in a Fragmenting World

Powell Hints Fed Is Done With Hikes in Pivot Cheered by Markets

How Higher Rates for Longer Can Be Good News for the Economy

Finance Chiefs Take Measured Approach to Using Real-Time Payments

Private Equity Makes Loan Payments With More Debt to Keep Cash

Jamie Dimon Warns Texas to Stop Pushing Anti-Business Bond Laws

Billionaire Targeted by Hindenburg Emerges Richer and Unbowed

The US Housing Market Has Become an Impossible Mess

China Is Winning in Solar Power, but Its Coal Use Is Raising Alarms

Adani’s Coal-Power Arm Posts 847% Jump in Profit on High Demand

Shell Launches $3.5 Billion Buyback After Earnings Rose on Higher Energy Prices

Why You Might Get Cheap Gas for Christmas

Foxconn Makes Your iPhone. Now It Wants to Make Your Electric Car

Palantir Surges After AI Demand Powers Record Quarterly Profit

Moderna Reports $3.6 Billion Loss on Covid Supply Writedowns

Novo Nordisk’s Earnings Surge on Frenzy for Obesity Drugs

The UAW Beat Detroit. Tesla Will Be a Different Beast

No Nation in the World Is Buying More Planes Than India. Here’s Why

Shipping Startup Flexport Is in Crisis Mode Heading Into the Holiday Season

Shein Turns to Western Executives to Become Even More Global

Bankrupt and Loving It: Welcome to the Lucrative World of Undead Brands

Six Flags, Cedar Fair to Merge in $8 Billion Theme Park Deal

Disney Says It Will Take Full Control of Hulu

Be sure to follow me on Twitter.