Before the Open (Nov 14-18)

Good morning. Happy Friday.

The Asian/Pacific markets were mixed. New Zealand, Indonesia and the Philippines did well; China and Hong Kong were weak. Europe, Africa and the Middle East are currently doing well. The UK, France, Germany, Switzerland, Hungary, Spain, the Netherlands, Italy, Austria and Sweden are leading; Russia is down. Futures in the States point towards a moderate gap up open for the cash market.

————— VIDEO: A Quarter Century of Big Up Days —————

The dollar is down slightly. Oil and copper are down. Gold is flat; silver is up. Bonds are mixed.

Stories/News from Seeking Alpha…


The problems of a post-Elon Musk Twitter (TWTR) could be reaching an existential level as speculation that the company will not continue in its current form grew Friday following another employee exodus.

Hundreds of workers, including many key software developers and engineers, decided to quit on Thursday rather than sign up for Musk’s “extremely hardcore” culture at the company, according to published reports citing sources and employee Slack messages.

The new Twitter chief set a 5 p.m. ET deadline Thursday for employees to click a link and commit to Twitter 2.0 and “working long hours at high intensity.” Instead, many employees decided to take the three months’ severance alternative.

In response to the exodus, Twitter is closing offices, as it did after the initial big wave of layoffs, as it determines who is still with the company.

“Effective immediately, we are temporarily closing our office buildings and all badge access will be suspended. Offices will reopen on Monday, November 21st,” the company said in a memo obtained by Bloomberg. “Thank you for your flexibility. Please continue to comply with company policy by refraining from discussing confidential company information on social media, with the press or elsewhere.”

Tweeting goodbyes: On Twitter Friday morning, the hashtags #RIPTwitter, #ApparentlyTwitter and #TwitterMigration were trending.

Accounts posted information on what other social media networks they could be found on, such as Mastodon, asked whether work accounts on Meta’s (META) Instagram should be created, and tweeted gallows humor farewells such as the “It has been a privilege” meme of the band playing in the movie Titanic.

Twitter employees also said their goodbyes and sent messages of support on the platform. Still, there is little sign of a meaningful decline in Twitter posts.

The inflection point?: The latest exodus comes after Musk initially fired half of the Twitter staff as he looked to make the company leaner and slash costs. A departure of top executives followed, then Musk reportedly fired a number of employees who had been critical of him in the company Slack. Yesterday’s decisions were enough for Musk to make moves to retain some staff.

As the “hardcore” deadline approached, Musk’s team held an in-person and videoconference meeting with key undecided employees, but as the deadline passed some began hanging up while the Tesla (TSLA) founder was still speaking, The New York Times reported.

He also appeared to soften his stance on remote work, saying in an e-mail he would no longer make the final decision personally on who could work remotely. But that may have backfired as he put manager jobs on the line for an employee’s remote performance, adding another level of job insecurity.

“Any manager who falsely claims that someone reporting to them is doing excellent work or that a given role is essential, whether remote or not, will be exited from the company,” he said. (8 comments)

Worse than Enron

John J. Ray III, the new boss of bankrupt cryptocurrency exchange FTX, criticized the “unprecedented” management of ex-CEO and founder Sam Bankman-Fried that ultimately led to the once-mighty firm’s demise, according to a court filing.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” said Ray, who has more than 40 years of legal and restructuring experience, including overseeing Enron’s high-profile bankruptcy in 2001.

“From compromised systems integrity and faulty regulatory oversight abroad to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” he added.

Ray mapped out a number of poor management practices that took place within Bankman-Fried’s crypto empire, including FTX’s failure to “keep appropriate books and records, or security controls, with respect to its digital assets.” It also used unsecured group email accounts to access private keys, Ray noted, and used software to hide the misuse of customer funds.

U.S. Senators Elizabeth Warren (D-MA) and Dick Durbin (D-IL) have demanded the now-bankrupt cryptocurrency exchange FTX provide information to shed light on its practices and finances from 2019 to present.

“New revelations continue to shed light on what now appears to be an appalling case of greed and deception,” the lawmakers wrote in a letter. “The public is owed a complete and transparent accounting of the business practices and financial activities leading up to and following FTX’s collapse and the loss of billions of dollars of customer funds.” (4 comments)

OPEC on top

OPEC is “back in the driver’s seat” as the world’s top swing oil producer while U.S. shale growth has slowed, Hess (HES) CEO John Hess said. Hess told an investor conference in Miami that he sees U.S. oil production reaching ~13M bbl/day in the next few years before leveling off, as shale output is ticking lower due to inventory depletion, inflation and investor pressure to focus on returns over growth.

“Shale was thought of as a swing producer … the Saudis and the OPEC have waited this out. Now, really OPEC is back in the driver’s seat where they are the swing producer,” Hess said, even as OPEC lacks spare capacity to easily increase its production. The CEO expects U.S. oil output will rise by ~500K bbl/day this year and next, but many companies “have already hit the wall” with only about a decade of life remaining. (12 comments)

Hawks hit back

James Bullard, president of the St. Louis Fed, said that even with his “generous” assumptions that tend to favor a more dovish policy, “the policy rate is not yet in a zone that may be considered sufficiently restrictive.”

“To attain a sufficiently restrictive level, the policy rate will need to be increased further,” he said at an event hosted by Greater Louisville Inc. The central bank has increased its key interest rate by 375 basis points this year and has been shrinking its balance sheet in its fight to lower inflation. He said in remarks after the speech that he sees 5%-5.25% as a minimum level for rates.

Meanwhile, the yield curve inversion between the 2-year (US2Y) and 10-year (US10Y) Treasury notes deepened to its widest level in four decades. The spread between the 2-year and 10-year extended to a mark of -66 basis points, marking the deepest inversion since 1982. An inverted yield curve is usually a sign of recession. (3 comments)

Today’s Economic Calendar
10:00 Existing Home Sales
10:00 E-Commerce Retail Sales
10:00 Leading Indicators
10:00 Quarterly Services Report
1:00 PM Baker-Hughes Rig Count

What else is happening…

Mortgage rates tumble to 6.61%, biggest drop since 1981.

Meta Platforms (META) has fired dozens for hijacking user accounts.

Amazon (AMZN) CEO says role eliminations will extend into 2023.

Binance CEO says he ‘may have been the last thing that poked’ FTX (FTT-USD) into collapse.

Goldman Sachs boosts terminal Fed rate forecast, still sees no recession.

Alibaba (BABA) jumps despite Q3 sales miss.

Ross Stores (ROST) stock rips higher on big earnings beat, bullish guide.


Good morning. Happy Thursday.

The Asian/Pacific markets were mixed. Hong Kong and South Korea were down big; Vietnam was up big. Europe, Africa and the Middle East are currently posting solid losses. Poland, France, Turkey, Finland, Norway, Hungary, Spain and Italy are down 1%. Futures in the States point towards a big down open for the cash market.

————— VIDEO: A Quarter Century of Big Up Days —————

The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are down.

Stories/News from Seeking Alpha…

Holiday blues?

Retailer stocks are rising slightly in premarket after a selloff spurred by a holiday sales warning from Target (TGT). Shares of Target are up slightly before the bell after falling more than 13% in the previous session. The SPDR S&P Retail ETF (XRT) is also rebounding premarket following a 3.7% drop.

EPS, EBITDA, and operating margin all came in short of expectations for Q3. Target also rattled investors by warning that softening sales and profit trends that emerged late in Q3 and have persisted into November. Guidance is now for a wide range of sales outcomes for the holiday quarter, centered around a low-single-digit decline in comparable sales.

Looking further ahead, TGT is undertaking an enterprise-wide effort to simplify and gain efficiencies across its business, with a focus on reducing complexities and lowering costs. The aim is to save $2B to $3B over the next three years. Layoffs are not expected to be part of the efficiency push.

Among the damage to retail shares, Macy’s (M) peeled off 8%, Dollar Tree (DLTR) fell 1.5% and Dollar General (DG) shed 0.4%. (47 comments)

Genesis jitters

Crypto prices are stabilizing, with bitcoin (BTC-USD), Ethereum (ETH-USD) and Dogecoin (DOGE-USD) off slightly in morning trading. Traders are trying to gauge the fallout from crypto broker Genesis Global halting redemptions and new loan originations on Wednesday as the implosion of crypto exchange FTX continues to rattle the broader ecosystem.

The FTX downfall has resulted in “abnormal withdrawal requests which have exceeded our current liquidity,” Genesis wrote in a string of Twitter posts. The company said it hired advisors to “explore possible options,” including sourcing new liquidity, and will deliver a plan for its lending arm next week. Of note, Genesis Global Capital, which serves institutional clients, had $8.4B in loan originations in Q3, down from $44.3B in Q1, according to its website. Genesis’s spot and derivatives trading and custody businesses, meanwhile, “remain fully operational,” it said.

A broader failure at Genesis could have a huge impact on companies that give customers yield by going through Genesis, which lends cryptocurrency to funds, according to Jason Yanowitz, co-founder of BlockWorks Group. “If you’re a CeFi platform that offers yield, you probably use Genesis,” he tweeted. “FTX hurt liquid funds and consumers,” Yanowitz said. “Genesis impacts nearly every company in crypto.”

Congressional hearings: Rep. Maxine Waters (D-CA) and Rep. Patrick McHenry (R-NC), ranking members of the House Financial Services Committee, said that they are planning to hold a bipartisan hearing in December to scrutinize the collapse of FTX and its “broader consequences” for the digital asset space.

FTX founder and ex-CEO Sam Bankman-Fried along with his hedge fund, Alameda Research and rival exchange Binance, which temporarily offered to bail out FTX, are all expected to attend the hearing.

“The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds,” Waters said in a statement.

Fewer rescue scenarios: “What makes this new phase of crypto deleveraging induced by the apparent collapse of Alameda Research and FTX more problematic is that the number of entities with stronger balance sheets able to rescue those with low capital and high leverage is shrinking within the crypto ecosystem,” J.P. Morgan’s Nikolaos Panigirtzoglou wrote in a note this week.

“Investor and regulatory pressure on crypto entities to disclose more information about their balance sheets, to safeguard client assets and to limit asset concentration is likely to increase and crypto market participants are likely to adopt more diligent risk management including management of counterparty risk,” he added. (15 comments)

Too much Twitter time?

Twitter (TWTR) may not have Elon Musk as an active executive for the long haul, according to statements made by Musk himself on Wednesday.

During Musk’s testimony in a case concerning his $55B pay package, the current Tesla (TSLA) and Twitter chief said he will “find somebody else to run Twitter over time” and gradually step away from an active role in the social media giant. He added that his current focus on the company comes as a result of the freshness of the $44B acquisition.

“There’s an initial burst of activity needed post-acquisition to reorganize the company,” he explained. “But then I expect to reduce my time at Twitter.”

Easing up on the SEC, a bit: Musk attempted to soften his often caustic rhetoric toward the SEC in testimony, but nonetheless panned the agency’s handling of the FTX collapse.

Musk walked back some statements about the Securities and Exchange Commission that he has made over the years. Musk has taken an antagonistic tone with regulators for quite some time, terming the SEC the “Shortseller Enrichment Commission” in late 2018 and again in mid-2020, escalating his vocal displeasure with the agency amid his attempts to nullify his Twitter takeover.

Musk clarified that he believes “the mission of the SEC is good.” Rather, he takes issue with specific enforcement decisions. Specifically, Musk took issue with the SEC’s handling of cryptocurrency regulation, such as in the case of the recent FTX bankruptcy.

“The SEC fails to investigate things that they should and places far too much attention on things that are not relevant. The recent FTX thing I think is an example of that,” he said in court. “Why was there no attention given to FTX? Investors lost billions, yet the SEC continues to hound me despite shareholders being greatly rewarded.” (26 comments)

Today’s Economic Calendar
7:30 Fed’s Bostic Speech
8:30 Housing Starts and Permits
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
9:15 Fed’s Bowman Speech
9:40 Fed’s Mester Speech
10:30 EIA Natural Gas Inventory
10:40 Fed’s Kashkari Speech
11:00 Kansas City Fed Mfg Survey
1:45 PM Fed’s Kashkari Speech
4:30 PM Fed Balance Sheet

What else is happening…

3M (MMM) viewed as potential activist target after 13F filing.

Nvidia (NVDA): The China question will weigh on business for some time.

Cisco (CSCO) pops as tech giant raises full-year guidance, Q1 results surpass expectations.

Diesel hits record premium over gasoline, crude oil.

Blizzard Entertainment (ATVI), NetEase (NTES) suspending game services in China.

Diamondback Energy (FANG) to buy Permian Basin assets in cash and stock deal.

Robinhood (HOOD) net cumulative funded accounts roughly flat from September.

SPAC Digital World (DWAC) drops after Trump announces re-election campaign.


Good morning. Happy Wednesday.

The Asian/Pacific markets were little changed. China and Thailand posted losses. Europe, Africa and the Middle East are currently mostly down. Turkey is doing well, but Denmark, Poland, France, Germany, Greece, the UAE, Switzerland, Spain, the Netherlands and Austria are down noticeably. Futures in the States point towards a slight down open for the cash market.

————— VIDEO: A Quarter Century of Big Up Days —————

The dollar is down. Oil and copper are down. Gold and silver are up. Bonds are up.

Stories/News from Seeking Alpha…

Trump declares

Former President Donald Trump formally filed a notice of a third run for the White House Tuesday night – setting up a two-year fight for the heart of the Republican Party, following a midterm election that largely went the Democrats’ way. He may be in for a rough fight after last Tuesday’s runaway re-election of Florida Gov. Ron DeSantis, one of the few Republican high points from the midterm elections – and amid an increasing groundswell over the past few days of key GOP leadership urging a break with the party’s recent past (namely Trump), and a look toward DeSantis as the future. “Ladies and gentlemen, distinguished guests and my fellow citizens, America’s comeback starts right now,” Trump told a crowd at his Mar-a-Lago home.

“Two years ago, we were a great nation, and soon we will be a great nation again,” Trump said. Trump is launching a campaign that, depending on whom you talk to, either significantly boosts or seriously hampers the GOP’s chances for reclaiming the U.S. presidency in ’24 – and with that, improving prospects for industries often benefiting from Republican leadership, such as coal and energy stocks including Exxon Mobil (XOM), Chevron (CVX), Peabody Energy (BTU), Arch Resources (ARCH), Alliance Resource Partners (ARLP) and Consol Energy (CEIX); large employers that would benefit from minimum wage limits, such as Walmart (WMT), McDonald’s (MCD), Kroger (KR) and Target (TGT); and defense stocks including Lockheed Martin (LMT), Raytheon Technologies (RTX), Northrop Grumman (NOC) and General Dynamics (GD).

That’s not to mention the so-called “Trump SPAC” Digital World Acquisition Corp. (DWAC), the special-purpose acquisition company linked with efforts to take the Trump Media and Technology Group public. Phunware (PHUN) stock might move on the latest news; the company was hired by Trump’s 2020 campaign to create a smartphone application, and the stock has made volatile Trump-related moves along the way (it also jumped 38% on Nov. 7). Trump’s media efforts are also connected to conservative-focused video site Rumble (RUM), and his page on the site was one of many live-streaming his announcement. Rumble provides cloud hosting for Trump’s Truth Social media platform.

It would be remiss to skip over Rupert Murdoch’s media empire, including Fox News (FOX) (FOXA) and Wall Street Journal owner News Corp. (NWS) (NWSA). Trump and Murdoch’s media were closely intertwined during the Trump presidency, and Trump made frequent call-in appearances to shows including Fox & Friends and Hannity. Recently, Murdoch’s papers and stations have demonstrated that turn away from Trump after the midterm disappointment – the New York Post ran a post-election cartoon cover of “Trumpty Dumpty” – but having a Trump race to cover again could be a difference-maker for newspapers and programs that often made Trump their No. 1 story. (317 comments)

Buffett boosts chips

Berkshire Hathaway’s (BRK.B) (BRK.A) significant new stake in Taiwan Semiconductor (TSM) spurred a healthy rally in other semiconductor stocks on Tuesday as investors searched for signs that the industry may be on the rebound.

Taiwan Semiconductor (TSM) shares rose more than 10%, while other chip names also gained, including Advanced Micro Devices (AMD), Nvidia (NVDA) and Marvell Technology (MRVL), all of which are Taiwan Semiconductor customers. AMD (AMD) and Marvell (MRVL) tacked on more than 3%, while Nvidia (NVDA) added more than 2%.

Nvidia (NVDA), which some analysts believe is still dealing with some short-term issues that have impacted the company’s financials, is slated to report third-quarter results after the close of trading Wednesday. (35 comments)

Artemis away

NASA’s most powerful rocket in 50 years lifted off overnight, taking an unmanned capsule on a mission to the moon. Artemis I lifted off from Kennedy Space Center’s Launch Complex 39B towards the moon at 1:47 a.m. local time (6:47 a.m. GMT).

Earlier, the launch came across new obstacle because of a faulty ethernet switch in the radar sites. NASA said: “The Eastern Range and launch teams have since resolved an issue that caused a loss of signal from a radar site and are currently conducting required tests to ensure communication and tracking of the rocket and spacecraft.”

Wednesday’s flight followed two previous launch attempts in August and September that were aborted during the countdown because of technical glitches. Last week, NASA left SLS and Orion out on the launchpad to weather the winds of Hurricane Nicole.

Boeing (BA), Northrop Grumman (NOC) and Aerojet Rocketdyne Holdings (AJRD) worked together to build parts of the SLS rocket. Lockheed Martin (LMT) oversaw the development of Orion. (4 comments)

Blast in Poland

Also in geopolitics, the international community is trying to determine the facts on the ground after a missile strike in Poland killed two people. Reports said that the missiles were made in Russia, but President Joe Biden reportedly told allies that the blast was caused by Ukraine’s air defense. Poland is a NATO member and world leaders are having an emergency meeting at the G20 summit in Bali.

Gold (XAUUSD:CUR) (GLD) rose yesterday following reports of the blast and is up 0.3% Wednesday. The STOXX Europe 600 (STOXX) is down 0.4%. But investors aren’t taking risk off the table, with stock index futures (SPX) (NDX:IND) (INDU) slightly higher. The euro (FXE) erased its gains against the U.S. dollar (DXY) and is gaining ground on the greenback again. (24 comments)

Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Retail Sales
8:30 Import/Export Prices
9:15 Industrial Production
9:50 Fed’s Williams Speech
10:00 Business Inventories
10:00 NAHB Housing Market Index
10:00 Fed’s Barr Speech
10:00 Atlanta Fed’s Business Inflation Expectations
10:30 EIA Petroleum Inventories
1:00 PM Results of $15B, 20-Year Bond Auction
2:35 PM Fed’s Waller Speech
4:00 PM Treasury International Capital

What else is happening…

Kevin O’Leary says his FTX account balances plunged to zero; takes aim at Bitbuy.

Disney (DIS) World boosts prices as parks demand continues surge.

Apple (AAPL) CEO Cook says tech giant will start sourcing chips from Arizona in 2024: report.

Carnival (CCL) stock slides 11% after the bell on $1B senior note offering.

Financial titans start 12-week digital dollar pilot with New York Fed.

Crypto lender BlockFi gets ready for potential bankruptcy in face of FTX contagion.

Liquidators for FTX assets approved by Bahamas’ supreme court; SBF takes to Twitter.

Home Depot (HD) results impress analysts, raise the bar for Lowe’s (LOW).


Good morning. Happy Tuesday.

The Asian/Pacific markets did well. China, Hong Kong, Taiwan and the Philippines led while Malaysia lagged. Europe, Africa and the Middle East currently lean up. Poland, France, Turkey, South Africa, the Netherlands, Israel and Austria are doing well; the UAE, Russia and Saudi Arabia are down. Futures in the States point towards a big gap up open for the cash market.

————— VIDEO: A Quarter Century of Big Up Days —————

The dollar is down. Oil and copper are down. Gold is up; silver is down. Bonds are up.

Stories/News from Seeking Alpha…

Pass the chips

It’s 13F season, where hedge funds with at least $100M in assets under management reveal their holdings. The flurry of filings gives investors a chance to see what they bought and sold during the quarter, including long positions, as well as call and put options, and generally detail where the “smart money” is being put to work. While shorts aren’t disclosed on the statements, some may still seek out vulnerabilities they can profit from (like heavy put-based short squeezes).

Snapshot: With the form required to be filed within 45 days of the end of a calendar quarter, hedge funds usually wait until the last minute to publish their holdings so as not to let the public know what they are doing. Check out some of the top headlines on Seeking Alpha:

Elliott Management adds Triple Flag Precious Metals, exits Diamond Offshore

Steve Cohen’s Point72 enters Dell, EOG, exits Nike, McDonald’s, Coca-Cola

Carl Icahn takes stakes in Crown Holdings, Twitter in Q3

Saudi Arabia sovereign wealth fund ups stakes in Meta, Alphabet

Nelson Peltz’s Trian Fund pares stakes in Ferguson, Sysco

Tepper’s Appaloosa closes positions in Kohl’s, Micron, Occidental, Netflix

Druckenmiller’s Duquesne adds Amazon, exits Westlake, lowers Microsoft stake

Soros Fund Management invests in Sierra Wireless, Booking, Agree Realty

Tiger Global scoops up HubSpot, PayPal in Q3, exits XPeng, Samsara

Dan Loeb’s Third Point opens bet in Range Resources, gets rid of Cenovus

ValueAct exits Bausch Health, SLM, boosts NYT stake, trims Rocket Cos.

While the transactions can be helpful, it’s important to remember that 13Fs don’t tell the whole story about what funds are doing. As noted above, bearish bets like short-selling are not included in the statements, so visible long core holdings could actually be hedges against those positions. In some instances, the reports can also reflect investment decisions made months ago, since they are only filed up to 45 days after the quarter is complete.

The Oracle: Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) took a new position in Taiwan Semiconductor Manufacturing (TSM), sending the chip giant’s stock up 11% in premarket trading. The stake of 60M shares follows a two-year low notched last month amid a sharp slowdown in global chip demand, but the firm apparently believes that the world cannot do without silicon. Buffett doesn’t typically make big technology bets, but has done some in the past with mixed success. While a six-year wager on IBM (IBM) did not pan out, Berkshire is sitting on massive unrealized gains with its $126B stake in Apple (AAPL). (54 comments)


Some thawing of relations appears to be happening at the G20 summit after President Biden met with Chinese leader Xi Jinping for three hours on Monday. While Taiwan still remains an issue, the two sides agreed to resume climate talks, and touched upon supply chain stability, as well as health and food security. The language was also warmer, noting that there should be more incentives to work together as opposed to decoupling from “each other’s economic development.”

Bottom line: “We were candid and clear with one another across the board,” Biden declared at a press conference. “I absolutely believe there need not be a new Cold War.”

Later today, the summit will kick off in earnest, with a gathering of G20 nations (and the EU economic union) that accounts for more than 80% of global GDP. Divisions over Russia’s war in Ukraine is shadowing the conference in many areas, which has the potential to sow discord among the participants, but they may find some unity as all the members face a darkening economic outlook. Looming recessions are the talk of the town, as well as instability over food and energy, and jumbo rate hikes to counter historically high inflation.

Go deeper: “Recognizing that the G20 is not the forum to resolve security issues, we acknowledge that security issues can have significant consequences for the global economy,” read a draft resolution that will reportedly be published at the summit. “Most members strongly condemned the war in Ukraine and stressed it is causing immense human suffering and exacerbating existing fragilities in the global economy… There were other views and different assessments of the situation and sanctions.”

‘Risk off the table’

Layoff contagion is spreading through Big Tech, with multiple reports suggesting that Amazon (AMZN) is about to slash its headcount. About 10,000 positions will be axed as early as this week, making it the largest-ever reduction at the e-commerce behemoth. It comes after Facebook parent Meta said it would shed 11,000 roles, adding to recent tech layoffs at Snap (SNAP), Lyft (LYFT), Twitter, Salesforce (CRM) and Stripe.

Bigger picture: In the firing line at Amazon will be many corporate and technology roles as the company reviews potential cost cutting measures and reassesses unprofitable ventures. Within these divisions, the Alexa devices organization, human resources and retail departments are expected to see the bulk of pink slips. It’s a big contrast to the expansion that happened during the pandemic, though much of the hiring that took place was to staff the firm’s hundreds of warehouses to keep up with a surge in online orders.

While the holiday period is typically when Amazon makes most of its sales for the year, the company is preparing for some serious economic uncertainty. Consumer spending could pull back due to macro pressures, and soaring costs and slowing growth could even hit the online business. Amazon shares have slumped roughly 42% YTD, resulting in a market cap of around $1T.

Worries on the horizon: “I don’t know whether we’re technically in a recession, economists argue over that and they have technical definitions, what I can tell you is that the economy does not look great right now,” declared Jeff Bezos, executive chairman and founder of Amazon. “The probabilities say that if we are not in a recession now, we are likely to be in one soon. My advice to people is to take some risk off the table right now.” Last month, Bezos said to “batten down the hatches,” in response to a comment from Goldman Sachs (GS) CEO David Solomon, who warned businesses to think more cautiously and to factor volatility into their economic outlooks. (119 comments)

Record privacy settlement

Google (GOOG, GOOGL) has settled a 40-state privacy investigation, agreeing to pay the group over $390M as part of a probe over its approach to tracking user location. Oregon State AG Ellen Rosenblum said the investigation was launched from a 2018 AP article that reported Google tracked movements even when explicitly told not to, via a pair of account settings (for Location History and Web & App Activity). In addition to the monetary settlement, the company has agreed to “significantly” improve tracking disclosures and user controls, starting in 2023.

Thought bubble: While the fine may be petty cash for Google, it is the largest AG-led consumer privacy settlement ever. Google may also face lawsuits from other states, meaning the final bill could come in at around half a billion dollars. Looking to the future, that could set a precedent for the industry and embolden privacy regulators to go after violations.

“For years, Google has prioritized profit over their users’ privacy,” Rosenblum continued. “They have been crafty and deceptive. Consumers thought they had turned off their location tracking features on Google, but the company continued to secretly record their movements and use that information for advertisers.”

Response: “Consistent with improvements we’ve made in recent years, we have settled this investigation which was based on outdated product policies that we changed years ago,” Google spokesperson José Castañeda said in a statement. (9 comments)

Today’s Economic Calendar
8:30 Producer Price Index
8:30 Empire State Mfg Survey
9:00 Fed’s Harker Speech

What else is happening…

Walmart (WMT) earnings preview: Retail’s state of the union address.

Wow, no cow: Oatly (OTLY) slides after slashing sales forecasts.

Antitrust battle over Apple’s (AAPL) App Store goes to appeals court.

Hasbro (HAS) tanks 10% on concerns about ‘Magic: The Gathering.’

Tyson (TSN) misses estimates, margin guidance raises suspicion.

Tencent (OTCPK:TCEHY) reportedly begins fresh round of layoffs.


Good morning. Happy Monday. Hope you had a good weekend.

The Asian/Pacific markets were split. Hong Kong, Taiwan, Singapore and the Philippines did great; Japan, South Korea, Indonesia and Thailand were werak. Europe, Africa and the Middle East currently lean up. The UK, Denmark, Poland, Turkey, Germany and Singapore are doing well. Futures in the States point towards a down open for the cash market.

————— VIDEO: The Bullish Case – Reasons to be Optimistic —————

The dollar is up. Oil and copper are down. Gold is down; silver is up. Bonds are down.

Stories/News from Seeking Alpha…

Game of chess

Profound impacts for the world’s two largest economies may come out of a meeting today in Bali, Indonesia, as President Biden sits down with Chinese leader Xi Jinping ahead of the G20 summit. While the White House has expressed it is “looking for competition, not conflict,” tensions have been running high between the two countries. The U.S. recently approved curbs on chip exports to China – bringing up trade war flashbacks – while the status of Taiwan has been a particularly tense subject since an August visit by House Speaker Nancy Pelosi and Russia’s war in Ukraine.

Quote: “I know I’m coming in stronger, but I don’t need that. I’ve spent more time with him than any other world leader,” Biden told reporters before the meeting. “I know him well and he knows me. We have very little misunderstanding. We’ve just got to figure out where the red lines are and what are the most important things to each of us going into the next two years.”

The U.S. has sought to portray its new export restrictions on advanced semiconductors as a national security issue, and not as an effort to sideline the Chinese economy, but it may be hard to convince Beijing on the matter. Goldman Sachs forecasts that the ban will shave a quarter of a percentage point off China’s economic growth in 2023, at a time when it’s already dealing with the fallout from Xi’s zero-COVID policy. The U.S. is also debating whether to roll back some Trump-era tariffs on Chinese goods, though a final decision still isn’t expected to be reached this year.

Go deeper: The meeting will come as both sides have bolstered their political support. Biden has scored a Democratic majority in the Senate following last week’s midterm elections, while Xi came out of the CCP’s recent National Party Congress with more power than any Chinese leader in a generation. (2 comments)

Fake tweets

Hoaxers taking advantage of Twitter’s new loosened rules for getting “verified” accounts are flooding the app with fake messages from celebrities and corporations, apparently slamming the stock prices of some notable companies. Lilly (LLY) fell some 4.5% on Friday after someone used a verified account designed to look like the firm’s official social-media channel to tweet: “We are excited to announce insulin is free now.” The posting not only took down the pharma firm’s stock price, but also apparently hit those of rival insulin makers Novo Nordisk (NVO) and Sanofi (SNY) as well.

Elsewhere: Lockheed Martin (LMT) slipped 5.5% on Friday, seemingly in part due to a bogus “verified” account purporting to disclose: “We will begin halting all weapons sales to Saudi Arabia, Israel and the United States until further investigation into their record of human rights abuses. #WeAreLM.” Other fake messages using “verified” accounts designed to look official included an alleged message from PepsiCo (PEP) that “Coke is better.” Meanwhile, Poland Spring parent Nestle (OTCPK:NSRGY) appeared to admit that “We steal your water and sell it back to you.”

Spoofers even used fake “verified” accounts to post hoax messages that appeared to come from other companies that are headed by new Twitter owner Elon Musk. For example, a fake SpaceX account seemed to disclose that “it is with a heavy heart that we announce that we will be ceasing all missions. We plan to funnel $240 million in overstanding government subsidies to groups dedicated to sustainable agriculture and ending World Hunger.” Hoaxers also tweeted from multiple seemingly verified accounts for Musk’s flagship company Tesla (TSLA). One missive poked fun at TSLA’s steep share-price decline since October 2021, writing that “honestly a 53% drop in stock price doesn’t [faze] us. If there’s anyone who knows about crashing it’s us.”

Outlook: Such problems have apparently prompted Twitter to quietly remove its new option of offering verified accounts to those who simply pay $7.99-a-month for Twitter Blue, instead of going through the firm’s previous elaborate process of confirming users’ identities. Musk introduced the new $7.99-a-month option shortly after he closed his $44B deal last month to take Twitter private. The billionaire has since reportedly warned that the social media giant is losing money and could fall into bankruptcy unless revenues rise. (240 comments)

‘Ways to go’

Denting some of the recent enthusiasm seen after last week’s CPI report, Federal Reserve Governor Christopher Waller called the 7.7% inflation print “enormous” and said it was “just one data point.” Markets surged following the figure showing that inflation pressures were decelerating, with traders long awaiting any sign of moderating consumer prices. It’s been nearly two years since the CPI figure was last at the Fed’s targeted goal of 2%, but the most recent 7.7% number was the lowest level since January.

The transcript: “These rates are going to stay – keep going up – and they’re going to stay high for a while until we see this inflation get down closer to our target,” Waller told a UBS Group conference in Sydney. “We’ve still got a ways to go. This isn’t ending in the next meeting or two. We’re looking at moving in paces of potentially 50 [basis points] at the next meeting or the next meeting after that. We’ve got to see this continue because the worst thing you can do is stop [tightening conditions] and then it takes off again, and you’re caught.”

“The market seems to have gotten way out in front over this one CPI report. Everybody should just take a deep breath, calm down. We’re going to see a continued run of this kind of behavior and inflation slowly starting to come down, before we really start thinking about taking our foot off the brakes here. We’ve got a long, long way to go unless by some miracle incomes start dropping off very rapidly, which I don’t think anybody expects. Rates are going to keep going up and they are going to stay high for a while until we see this inflation get down closer to our target.”

Soft landing? “I’ve just been amazed to watch rates go up almost 400 basis points in about seven months, eight months and the markets haven’t collapsed. We don’t have a financial crisis or anything along those lines. We’ve got to have a good level, and we got it there fast, and we didn’t break anything. We are certainly not breaking anything in the labor markets in terms of unemployment. Households are in good shape, and household balance sheets are in very good shape. I can’t speak for [Fed] Chair [Jerome Powell], but as I watched the press conference, that was the signal – to quit paying attention to the pace and start paying attention to where the end point is going to be.” (21 comments)

Istanbul bombing

A bomb went off in the heart of Istanbul on Sunday afternoon, killing at least six people and wounding 81 others (50 have so far been discharged from the hospital). The attack occurred in the middle of Istiklal street, a popular tourist destination on the city’s “European Side,” which includes bars, cafes, designer shops and many foreign diplomatic missions. Concerns are growing over a revival in terrorism in one of the Middle East’s largest economies, especially with Turkish presidential and parliamentary elections only six months away.

Snapshot: Interior Minister Suleyman Soylu said the attack was perpetrated by members of the Kurdistan Workers’ Party, or PKK, which Ankara considers terrorists. A female assailant was said to have detonated the bomb, after CCTV footage showed her sitting on a bench for more than 40 minutes, and then leaving behind a bag just minutes before the explosion. “Attempts to submit Turkey and Turkish people by acts of terrorism are doomed to fail today as they were in the past,” Turkish President Recep Tayyip Erdogan said at a press conference before his departure for the G20 summit.

The bombing was the first such incident in years in Turkey, which was the target of a series of similar attacks by Islamic State and Kurdish militant groups from 2015 to 2017. Along with a failed military coup attempt in 2016, the events roiled Turkey’s economy, and threatened to upend its tourism industry which brings in billions of dollars of foreign currency.

Go deeper: Not helping the situation is a serious inflation problem. Turkey’s annual inflation rate rose to a record 25-year-high of 85.5% in October, according to official figures, sharply eroding Turks’ earnings and savings. President Erdogan believes in an unorthodox approach that higher rates cause inflation, rather than prevent it, with Turkey’s central bank slashing rates for the third consecutive month in October.

Today’s Economic Calendar
6:30 PM Fed’s Williams Speech

What else is happening…

Chapter 11: SBF steps down from his CEO role at FTX Group.

U.S. to tighten methane emissions rules on domestic drilling.

Disney (DIS) planning ‘targeted’ hiring freeze, some cuts – CNBC.

Theater relief! ‘Black Panther’ sequel vies for 2022’s best opening.

Consumer sentiment turns gloomier, inflation expectations tick up.


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