Before the Open (Dec 19-23)

Good morning. Happy Friday.

The Asian/Pacific markets were weak. Japan, South Korea, India and Taiwan dropped more than 1%. Europe, Africa and the Middle East are currently mixed and little changed. Austria, Sweden and the Czech Republic are up; Turkey is down. Futures in the States point towards a negative open for the cash market, but this could change, as there’s more economic data to be released.

————— Masterclass Overview –>> here —————

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

Stories/News from Seeking Alpha…

Stockings stuffed with stocks

“Dear Santa, please bring equities for next year” is the simple message from the latest Seeking Alpha poll. More than 2,300 readers responded to this week’s Wall Street Breakfast poll. Asked where they would deploy most of their investing capital in 2023, a vast majority of readers said “stocks.”

More than 62% of respondents will tilt most of their investments to equities (SPY) (QQQ) (IWM) (URTH), according to the results. For the more risk-averse, cash (SPRXX) at 17.5% was a favorite over bonds (TBT) (TLT) (SHY) (JNK) (LQD) (BNDW) at 12.2%, indicating that those investors are skeptical of Fed rate cuts coming next year.

The latest Summary of Economic Projections “shows the ‘median’ FOMCer expects short rates to rise to 5.1%, and remain there for the entirety of 2023, inflation to remain hundreds of basis points above target through the end of next year, the yield curve to remain in inversion for two more years (given the current level of long rates) and the unemployment rate to ‘only’ rise 110 bps from recent trough to prospective peak,” MKM strategist and economist Michael Darda wrote in a note (emphasis his).

Rounding out the results, 5.4% said they will put most of their capital to work in commodities (USO) (GLD) (DBC), nudging out crypto (BTC-USD) (ETH-USD) (OTC:GBTC) at 2.7%.

Wall Street skeptical: The confidence in stocks from those surveyed is in sharp contrast to the expectations from Wall Street strategists.

Strategists expect below-average returns for the S&P 500 (SP500) (SPY) in 2023, with many of their colleagues on the economics side predicting a global recession. On average, the 2023 end price target for major Wall Street shops is 4,080, a little less than a 7% rise from current levels.

On the top end, Fundstrat’s Tom Lee is the most bullish with a target of 4,750. BNP Paribas’ Greg Boutle is the most bearish, predicting a drop to 3,400. Among other notable calls, J.P. Morgan’s Dubravko Lakos-Bujas is expecting the S&P to close out next year at 4,200, a view also shared by Wells Fargo’s Chris Harvey. Goldman Sachs’ David Kostin, Citi’s Scott Chronert and BofA’s Savita Subramanian all predict a mostly sideways year with a target of 4,000.

No Santa yet: The stock market would need a major rally on this Friday for a Santa Claus rally to appear. The S&P is currently down 1.45% for the week leading into Dec. 25 and the three-day Christmas weekend. But opinion is divided on when exactly a Santa Rally appears.

For those in the camp that it is the week leading up to Jan. 2, there is a chance bulls could prompt some outsize gains in next week’s holiday-shortened, low-volume trading. (3 comments)

Musk says no sales

Tesla (TSLA) CEO Elon Musk said he will not sell any more Tesla stock for about two years. While speaking in a Twitter Spaces audio chat, Musk also said he expects the economy to be in “serious recession” in 2023, reducing demand.

His comments came after a Tesla stock selloff deepened on Thursday over worries about softening demand for electric cars and Musk’s distraction with Twitter and his stock sales. Shares have been down for five sessions in a row.

“I won’t sell stock until I don’t know probably two years from now. Definitely not next year under any circumstances and probably not the year thereafter,” Musk said, responding to a question from TSLA investor Ross Gerber, who clashed in tweets with Musk earlier this week. (25 comments)

$250M bail

FTX co-founder and former CEO, Sam Bankman-Fried posted a bond of $250M and will be allowed to live in his parent’s house in California while waiting for his trial on charges of fraud. Assistant U.S. Attorney Nicolas Roos had proposed the bail terms and alleged that Bankman-Fried “perpetrated a fraud of epic proportions.”

Magistrate Judge Gabriel W. Gorenstein, who agreed to the bond and the house arrest proposal, said Bankman-Fried will be required to get an electronic monitoring bracelet. Bankman-Fried was arrested in the Bahamas 10 days ago, after the U.S. filed criminal charges against him. On Wednesday, he waived his right to fight extradition to the U.S. and flew back to the U.S. accompanied by FBI agents and the U.S. Marshals Service. (49 comments)

APEs going away?

Shares of AMC (AMC) slumped, but came well off session lows, while preferred units (APE) surged after the proposal from the cinema chain to swap all preferred stock for common shares, which would then undergo a reverse split.

The company also said it intended to have a special shareholder meeting to vote on proposals from its board of directors to convert APE units into common stock and reverse split its stock at a 1-10 ratio.

AMC also said it was raising $110M in equity, selling APE shares to Antara Capital at a weighted average price of $0.66 per share. In addition, AMC said it cut its debt load by $100M, reducing its 2nd lien notes due in 2026 that were held by Antara in exchange for the 91M APE units. (101 comments)

Today’s Economic Calendar
8:30 Durable Goods
8:30 Personal Income and Outlays
10:00 New Home Sales
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count

What else is happening…

Chinese EV battery-swapping tech developer U Power (UCAR) files for $25M IPO.

YouTube scores with new deal for NFL Sunday Ticket.

Microsoft (MSFT) responds to FTC lawsuit to block $69B Activision (ATVI) deal.

FTX (FTT-USD) creditors pick Paul Hastings for bankruptcy proceedings.

Scott Minerd, Guggenheim’s managing partner, has passed away.

Medical Properties (MPW) stock jumps after its largest tenant extends line of credit.

U.S. home sales plunge 35% in November as high mortgage rates bite: Redfin.

Senate passes $1.7T spending bill, clearing way for House vote.

Vanguard bolsters ETF lineup with a new Short-Term Tax-Exempt Bond.

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Good morning. Happy Thursday.

The Asian/Pacific markets mostly did well. Japan, Hong Kong, South Korea, India and Indonesia led. Europe, Africa and the Middle East are currently split and little changed. Turkey, Switzerland and Saudi Arabia are up; Denmark, Spain and Austria are down. Futures in the States point towards a slight positive open for the cash market.

————— Masterclass Overview –>> here —————

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

Stories/News from Seeking Alpha…

SBF associates flip

Caroline Ellison, the former CEO of Alameda Research, and Gary Wang, an FTX (FTT-USD) co-founder and former chief technology officer, both of whom have close ties to former FTX CEO Sam Bankman-Fried, have pled guilty to federal criminal fraud charges.

In a Wednesday night statement posted on Twitter, US Attorney for the Southern District of New York Damian Williams said that the duo were charged due to “their roles in the fraud that contributed to FTX’s collapse.” Ellison and Wang are also cooperating with the Southern District as the feds build their case against Bankman-Fried.

Williams also sent a warning to others. “If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it. We are moving quickly and our patience is not eternal.” He added that Bankman-Fried is now in FBI custody and en route to the US from the Bahamas.

On Dec. 12, SBF was charged by a federal court in New York with multiple charges including wire fraud, securities fraud, money laundering, and violations of campaign finance laws. He could make a US court appearance as soon as today.

The SEC complaint against Ellison and Wang alleges that Ellison, under direction from Bankman-Fried, manipulated the price of FTT, an FTX-issued exchange crypto security token, by buying large amounts on the open market to artificially inflate its price. The SEC alleges that Wang created FTX’s software code that allowed Alameda to divert FTX customer funds, and that Ellison misused these funds for Alameda’s trading activity.

“When FTT and the rest of the house of cards collapsed, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left investors holding the bag,” SEC Chairman Gary Gensler said in a statement. (12 comments)

Micron layoffs

Micron Technology (MU) said that it will cut its workforce by 10%, and keep tightening its financial belt in 2023 as it foresees more negativity across the semiconductor market. Micron gave its business assessment along with its fiscal first-quarter results after the market close. The company missed slightly on the top and bottom lines.

Based on its recent employee numbers, Micron would be cutting almost 5,000 workers in the year ahead. The memory chipmaker said that for its fiscal second quarter, it expects to lose between 52 cents and 72 cents a share, excluding one-time items, on revenue in a range of $3.6B to $4B. Micron said that “over the next few months”, it expects “gradually improving demand trends for memory as customer inventory levels improve further, new CPU platforms are launched, and China’s demand starts to grow as its economy reopens.” Still, Micron was quick to add that it expects “industry profitability will remain challenged” throughout 2023.

In a statement, Micron Chief Executive Sanjay Mehrotra said that the company is “taking decisive actions to cut our supply and expenses” and that it expects improvements in customer inventories to improve and enable revenue to start growing in the second half of next year. (22 comments)

Goldman on Recession

Goldman Sachs chief economist Jan Hatzius says he doesn’t expect the Federal Reserve to cut interest rates in 2023, mostly because he’s more optimistic than most about the economy’s ability to sidestep a recession.

Speaking to CNBC, Hatzius predicted that a recession will likely be avoided as tighter financial conditions and tighter monetary policy constricts the labor market and cuts into GDP growth – but not enough to trigger a downturn. This will, in turn, keep the Fed from reducing interest rates during the year, as the lack of a recession will lower the pressure for stimulus.

“I think the hurdle for (the Fed) to cut (interest rates) in a non-recessionary environment with inflation still above the target, I think it’s going to be relatively high,” he said. “As I look forward into 2023, even with additional hikes, we have an extra 75 basis points of hikes in here, similar to the Fed’s forecast, I think the drag from financial conditions will be smaller.” (87 comments)

Stonk Hodlers

Daniel Loeb, the billionaire leader of hedge fund Third Point, took a shot at Cathie Wood, saying that a recent market memo from the CEO and CIO of ARK Invest should be used as a dissertation to understand the mindset approach of “stonk hodlers.”

Within Wood’s Ark’s Disruptive Innovation and Profitability memo, she highlighted that Ark Invest takes positions in stocks that sacrifice short-term profits in order to take advantage of the “exponential growth and highly profitable opportunities” that a handful of innovation platforms are producing.

“Companies catering to short-term oriented investors and leveraging their balance sheets to pay dividends or manufacture earnings with share repurchases do not seem to us to be investing enough to catch these waves of innovation,” Wood said. “As a result, we believe many are likely to be disrupted, if not destroyed.”

Loeb answered back with a tweet: “Anyone teaching a value investing class or one on investment psychology should use this memo as a treatise to study the mindset of stonk hodlers. Note the disparaging comments on luddites who look at archaic measures of value like cash flow as short term traders.” (142 comments)

Today’s Economic Calendar
8:30 GDP Q3
8:30 Initial Jobless Claims
8:30 Chicago Fed National Activity Index
8:30 Corporate profits
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
4:30 PM Fed Balance Sheet

What else is happening…

Will 2023 be another rough year for trillion-dollar market cap techs?

Activision Blizzard (ATVI), Meta (META), Google (GOOG, GOOGL) are among Baird’s top tech picks for 2023.

Six Flags (SIX) is being pressed to sell its real estate assets – watch these REIT players.

Apple (AAPL): Six reasons why its shares could rise, not including the Apple Car.

Some hedge funds, flush with cash, plan to return some profits to clients.

CVS (CVS), Walgreens (WBA), Teva (TEVA) in opioid agreements with Washington attorney general.

Six Flags (SIX) confirms talks with activist investor about real estate assets.

Justin Bieber nearing deal to sell music rights to Blackstone (BX)-backed investment firm.

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Good morning. Happy Wednesday.

The Asian/Pacific markets were mixed. Hong Kong, Australia and the Philippines moved up; Japan and India moved down. Europe, Africa and the Middle East are currently doing very well. The UK, France, Turkey, Germany, Greece, South Africa, Finland, Switzerland, Norway, Spain, the Netherlands, Italy, Austria and Sweden are leading. Futures in the States point towards positive open for the cash market.

————— VIDEO: Negative Divergences Everywhere —————

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

Stories/News from Seeking Alpha…

Tesla tumble

Tesla (TSLA) carved out a new 52-week low of $140.60 with some reports indicating the search for a new CEO at Twitter could be drawn out and keep the Elon Musk distraction angle a factor for weeks or months in how the stock is viewed.

Musk, who’s currently CEO of both Tesla and privately held Twitter (along with other private companies like SpaceX), confirmed late Tuesday that he will step down as Twitter’s chief executive.

The billionaire made the move after polling his Twitter followers over the weekend on whether he should give up the helm at the social media giant, which Musk recently bought and took private.

However, the entrepreneur said he would only relinquish his Twitter CEO title “as soon as I find someone foolish enough to take the job,” potentially meaning he’ll remain tied up with the social firm’s business for some time.

Shares of Tesla closed down 8.05% earlier Tuesday and ended up trading at a 25-month low. The stock has given back more than half of the pandemic gain and is down more than 65% during 2022.

Is Tesla a value pick yet? On a quant basis, the electric vehicle stock is still rated D- although bulls maintain the growth and margin upside warrants a premium valuation similar to a tech megacap superstar. Over the last week, Tesla has fallen more than EV peers like Fisker (FSR), Rivian Automotive (RIVN), Lucid Group (LCID), and Nio (NIO).

What to watch: Perhaps lost in all the drama over Tesla’s share price slide and the Twitter headlines, the electric vehicle giant is only two weeks away from reporting on Q4 deliveries. Tesla is seen having a chance to hit 450K to 465K deliveries for the quarter with Giga Berlin and Giga Austin contributing. If Tesla could hit 475K deliveries, the company could re-charge the bull argument by achieving its broad target of 50% production growth. (338 comments)

Zelenskyy goes to Washington

Ukraine President Volodymyr Zelenskyy travels to Washington Wednesday in his first trip outside his country since the Russian invasion.

Zelenskyy will have an extended meeting with President Joe Biden, who is planning to announce a $2B defense aid package for Ukraine that will include the Patriot missile system, according to published reports. Ukraine has faced an escalation of Russian missile and drone attacks. Zelenskyy will also hold other meetings and address a joint session of Congress and push for continued aid from the U.S. The House of Representatives is expected to be much more reluctant to aid Ukraine when Republicans take control in January.

“On my way to the US to strengthen resilience and defense capabilities of (Ukraine),” Zelenskyy tweeted. “In particular, @POTUS and I will discuss cooperation between (Ukraine and the USA) I will also have a speech at the Congress and a number of bilateral meetings.”

“The visit will underscore the United States’ steadfast commitment to supporting Ukraine for as long as it takes, including through the provision of economic, humanitarian, and military assistance,” White House Press Secretary Karine Jean-Pierre said. Zelenskyy is expected to arrive at the White House at 2 p.m. ET. (2 comments)

Nike rally

Nike (NKE) rallied after sliding past consensus marks with its FQ2 earnings report. A drop in revenue in Greater China (-3%) was more than offset by gains in Asia Pacific & Latin America (+19%), North America (+30%) and Europe, Middle East, & Africa (+11%).

Footwear sales were up 25% to $8.50B, while apparel sales rose 4% to $3.8B. Nike Direct sales were up 16% to $5.4B on a reported basis and were up 25% on a currency-neutral basis. Converse sales growth lagged during the quarter with only a 5% increase. Gross margin fell 300 basis points to 42.9% of sales vs. 42.1% consensus. The margin drop was primarily due to higher markdowns to liquidate inventory, particularly in North America, as well as continued unfavorable swings in foreign currency exchange rates and elevated freight/logistics costs. Strategic pricing actions during the quarter helped to offset some costs.

Net income for the apparel giant was flat compared to a year ago at $1.3B. Nike ended the quarter with inventory up 43% year-over-year to $9.3B. The comparable to last year when supply chain disruptions hit accounted in part for the big runup.

Nike’s cash position at the end of the quarter was $10.6B vs. $15.1B a year ago as strong free cash flow was offset by share repurchases and cash dividends. Nike management said the company is on track to deliver on operational and financial goals. The athletic apparel giant is expected to issue guidance on its upcoming conference call. (14 comments)

Storm stocks

According to weather reports, a white Christmas is due this year across much of the country. However, as opposed to a light dusting, a potential bomb cyclone over the Midwest and a blizzard in the Northwest are expected. Meanwhile, heavy rain across New England and high winds across the East coast are set to hit in tandem ahead of the Christmas holiday weekend.

Per AccuWeather reports, stormy weather across the Pacific Northwest began to set in on Monday evening, dropping snow across Washington. That winter weather is expected to gain steam on Wednesday and into the end of the week, hitting cities like Minneapolis and Denver hardest and progressing toward Chicago, St. Louis, and upstate New York. While avoiding snow, inclement weather is expected to hit across the East coast as well. Adding to expectations of difficult weather conditions across the country, The Weather Channel reported that a storm it has termed Winter Storm Elliott could become a bomb cyclone and ravage the region around the Great Lakes. Meanwhile, temperatures across the country are set to hit the lowest levels for the Christmas holiday in 39 years.

The most obvious sector to bear the brunt of the impact into the busy travel weekend is the airline industry. In accordance with the expectation of unsafe weather for flight, major carriers including United Airlines (UAL), American Airlines (AAL), and Southwest Airlines (LUV) have already begun to issue weather-related waivers. Regional carrier Sun Country (SNCY) as well as Spirit Airlines (SAVE) and JetBlue Airways (JBLU) have offered fare changes.

By contrast, a cold snap across regions not seeing quite the same snowfall may aid holiday shopping, according to Wells Fargo. A team of analysts led by Ike Boruchow noted that near-record low temperatures across the nation is likely to result in a boost for women’s outerwear and boots, men’s outerwear, and jeans sales. As such, Canada Goose (GOOS), Burlington Stores (BURL), and G-III Apparel (GIII) are expected to benefit as the bank’s “top names to play” as last-minute shoppers hunt deals.

“While retailers have already been heavily discounting this season, consumers and retailers are likely holding out for some special offers to land on the biggest promotional day of the year,” Steve Sadove, senior advisor for Mastercard (MA), forecast ahead of the holiday shopping season. (35 comments)

Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Current Account
10:00 Consumer Confidence
10:00 Existing Home Sales
10:30 EIA Petroleum Inventories
1:00 PM Results of $12B, 20-Year Bond Auction

What else is happening…

Elon Musk confirms he will resign as Twitter (TWTR) CEO once he finds replacement.

FedEx (FDX) beats bottom line estimates, offers weak guide into 2023.

Google’s (GOOG, GOOGL) YouTube said in talks for rights to NFL Sunday Ticket.

U.S. Senate seen voting on $1.7T spending bill to avert shutdown.

Bill Gross buys Annaly Capital (NLY), AGNC (AGNC) stocks even as recession looms.

Walmart (WMT) says $3.1B payout to settle opioid lawsuits cleared by all 50 states.

Six Flags (SIX) gains after report activist takes stake, pushes for sale of real estate.

BlackBerry (BB) Non-GAAP EPS of -$0.05 beats by $0.02.

Workday (WDAY) paves way for tech veteran Eschenbach to become CEO in 2024.

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Good morning. Happy Tuesday.

The Asian/Pacific markets were mostly very weak. Japan, China, Hong Kong, South Korea, Taiwan and Australia dropped more than 1%. Europe, Africa and the Middle East are currently mixed and little changed. Spain, Turkey and Saudi Arabia are up; Russia and Hungary are down. Futures in the States point towards a down open for the cash market.

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

Stories/News from Seeking Alpha…

Tweaking Twitter rules

Elon Musk has not directly addressed the results of a Twitter (TWTR) leadership poll that ended with users saying he should step down. But Musk did cast some doubt on the results indirectly and said Twitter would narrow who could vote in future polls.

A Twitter user posted on Monday that “Blue subscribers should be the only ones that can vote in policy related polls. We actually have skin in the game.” In response, the Tesla (TSLA) CEO and Twitter chief said: “Good point. Twitter will make that change.” Musk also replied with “interesting” to a tweet that suggested bots had dominated the poll yesterday where Musk asked if he should remain at the top spot of Twitter.

More than 10M users, or 57.5%, voted that he should step down. Musk had said he would abide by the results of the poll. He had also said that Twitter would put major policy changes at the social media company up to a vote by users in the future.

Several analysts have called Monday’s developments a positive for Tesla’s (TSLA) stock, including Wedbush Securities analyst Dan Ives. The removal of the “major overhang” on Tesla’s stock is seen helping slow down or end any brand deterioration related to Musk. (20 comments)

Japan yield cap

Longer rates rose after the Bank of Japan unexpectedly widened its yield curve control, prompting a government debt selloff. The 10-year Treasury yield (US10Y) rose 8 basis points to 3.66% and the 30-year yield (US30Y) rose 10 basis points to 3.72%.

The BoJ boosted the leeway on the 10-year JGB yield to 0.5% from its target of 0%, up from the previous cap of 0.25%. The yen (FXY) surged 3.5% against the greenback.

Japan is changing policy because of inflation worries, strategist Jim Bianco tweeted, adding: “remind me why the Fed would be pivoting anytime in 2023?”. “The answer is they will not,” he said. “You can forget a pivot.”

Japan’s move is “widely seen as the beginning of a potential end to their ultra loose monetary policy,” Deutsche Bank’s Jim Reid said. “That policy has made them a big outlier compared to other central banks this year, having maintained rates at the zero lower bound whilst others embarked on their biggest tightening cycle in a generation.”

“Indeed, it’s important not to underestimate the impact this could have, because tighter BoJ policy would remove one of the last global anchors that’s helped to keep borrowing costs at low levels more broadly,” Reid added. (2 comments)

Bankman-Fried extradition

Sam Bankman-Fried, the co-founder of the crypto exchange of FTX and its ex-CEO, voluntarily agreed to his extradition to the U.S., where he’s charged with defrauding investors and clients, The Washington Post reported Monday, citing a person familiar with the matter.

The morning’s session in a Bahamian court had been a confusing one, as SBF’s local lawyer was unaware that his client was going to court that morning. Jerome Roberts, the lawyer, had been on his way to prison to speak with Bankman-Fried when he found out that his client was in court.

Magistrate Shaka Serville allowed Bankman-Fried to speak with his lawyers via phone and under supervision and continued his remand to Fox Hill prison, the Post said. SBF’s legal team is preparing legal documents and he is expected to return to court this week. Earlier in the day, Roberts told reporters that his client had agreed to the extradition despite “the strongest possible legal advice.” (8 comments)

Jan. 6

Trump SPAC Digital World Acquisition (DWAC), which is taking Trump’s social media company and Truth Social app public, dropped 11% on Monday as a House committee recommended that the former President be prosecuted for his role in the Jan. 6 assault on the U.S. Capitol.

The committee voted unanimously Monday to refer the ex-president for prosecution related to multiple offenses including insurrection, according to media reports, including Bloomberg. The committee recommendation doesn’t require the Department of Justice to prosecute Trump and it has no formal legal impact.

The news comes after Digital World (DWAC) disclosed on Friday the SPAC’s chief financial officer and two board members have resigned in recent weeks. DWAC shares have plunged 82% since hitting highs in early March. (147 comments)

Today’s Economic Calendar
8:30 Housing Starts and Permits

What else is happening…

Amazon (AMZN) is called a ‘Buffett Buy’ at Evercore due to long-term potential.

Anheuser-Busch InBev (BUD) turns World Cup beer fiasco into big win with Messi mention.

Supreme Court schedules arguments for Biden’s student debt forgiveness plan.

Mondelez (MDLZ) sells Trident, Dentyne and more gum brands in $1.35B deal.

Lucid Group (LCID) stock surges after completing stock sale.

Wells Fargo sees central banks moving to support growth by end of 2023.

Microsoft (MSFT) added as an awardee for $900M ceiling Air Force contract.

Amazon Web Services (AMZN) secures $723.88M Navy BPA contract.

—————

Good morning. Happy Monday.

The Asian/Pacific markets were mostly weak. Japan, China, Hong Kong, Taiwan and the Philippines led to the downside. India did well. Europe, Africa and the Middle East are currently doing well. The UK, France, Germany, Turkey, Finland or Portugal are leading. Futures in the States point towards a flat open for the cash market.

Elon gone?

Elon Musk lost a poll on whether he should remain head of Twitter (TWTR) Monday. “Should I step down as the head of Twitter?” Musk asked hundreds of millions of Twitter users, noting, “I will abide by the results of this poll.”

“As the saying goes, be careful what you wish, as you might get it,” Musk tweeted after posting the poll. As the poll closed, more than 17.5M had responded, with 57.5% saying “Yes.”

It is unclear whether Musk has succession planning in mind for Twitter if users vote him out. In October, Musk, the world’s richest man until recently, completed his $44B acquisition of Twitter, leading to the immediate resignations of its then Chief Executive Parag Agrawal and Chief Financial Officer Ned Segal.

Musk also said in a follow-up tweet that “there will be a vote for major policy changes” at the company in the future. “My apologies. Won’t happen again,” he added amid uproar over Twitter’s decision to suspend some journalists from the social media platform. However, Elon Musk later reinstated the accounts of several journalists, including those from the New York Times, CNN, and the Washington Post.

The poll comes days after Tesla (TSLA) shares reached a 52-week low amid investor concerns over Musk’s Twitter distraction. On Friday, media reports indicated that Musk reached out to one of the automaker’s investors, seeking additional funds for the deal.

Meanwhile, in a significant policy shift, Twitter announced Sunday it would no longer allow users to promote their accounts on at least seven other major social media sites, including Facebook and Instagram of Meta Platforms (META).

“We recognize that many of our users are active on other social media platforms. However, we will no longer allow free promotion of certain social media platforms on Twitter,” Twitter Support said. “Specifically, we will remove accounts created solely for the purpose of promoting other social platforms and content that contains links or usernames for the following platforms: Facebook, Instagram, Mastodon, Truth Social, Tribel, Nostr, and Post.” (14 comments)

Avatar box office

To the great relief of movie-theater chains, Avatar: The Way of Water (DIS) has grossed $134M in its North American opening – one of the year’s top debuts, and set to launch a multi-week recovery from some box-office doldrums. That $134M tied with The Batman (WBD) for fifth-best opening domestically of 2022 (and Sunday night receipts will move the new Avatar up there). It also added $301M overseas for a global first-weekend total of $435M and counting, the third-biggest opening of the COVID-19 pandemic era.

While giving some breathing room for movies, the new Avatar’s opening take did come in a bit behind expectations for at least $150M – though some long legs will really determine its importance in the coming few months. And it will be counting on a long successful run. It cost hundreds of millions of dollars just to make it, let alone market it – and director James Cameron says it will need to be one of the top three grossers of all-time just to break even.

Some 62% of Avatar 2’s ticket sales came from premium formats, including IMAX (IMAX), which claimed its second-biggest weekend ever and best December opening with $48.8M. (33 comments)

JanSport on the block?

VF Corp. (VFC) is considering the potential sale of its JanSport backpack business. A transaction may value JanSport at about $500M, according to a Bloomberg report from late Friday, which cited people familiar. VF hasn’t made a final determination if it will sell the unit or may decide to keep it.

Shares of VF, the owner of North Face, Vans and Timberland brands, have dropped 64% this year. Shares rose 1% in premarket trading Monday. The potential sale comes after VF Corp. fell 11% on Dec. 5 after the apparel and footwear manufacturer announced the retirement of its CEO and trimmed its 2023 outlook. (47 comments)

Scrooge over Santa

Consumers are looking more miserly than expected into the year-end, according to Wall Street channel checks. Nearly across the board, analysts are voicing concerns on consumer belt-tightening, coupled with a shift away from goods consumption. While e-commerce spending was noted as on the rise nominally, as reflected in Adobe Black Friday sales data, inflation dampens enthusiasm on that front. Meanwhile, retail sales data overall indicates brick-and-mortar spending is slowing substantially as well.

“Inflation is pinching consumers at a record level, credit is harder to find, while job strength is the only thing better than a year ago,” Evercore ISI told clients in a downbeat note on holiday sales. “To save money, consumers are going Scrooge by trading down (cheaper items), trading out (fewer gifts), and waiting until the last minute for markdowns and deals.” The firm added that consumers are spending more on staple categories at retailers like Walmart (WMT), Costco Wholesale Corporation (COST), and Kroger (KR) and cutting spending on products in the electronics, sporting goods, and apparel categories. Best Buy (BBY) and Target (TGT) were cited as prominent retailers on the “naughty list.”

Bank of America data reflected a similar dynamic, with a particular focus on the hit to apparel sales ahead of Christmas. According to the bank data, retail spending on clothing slumped over 9% year over year in November despite Black Friday sales. Increasing spend on experiences versus goods as well as inflationary impacts were cited as factors driving the trend in addition to the overall pull-back pinpointed by Evercore. (34 comments)

Today’s Economic Calendar
10:00 NAHB Housing Market Index

What else is happening…

Apple (AAPL) tops Wedbush’s 2023 tech picks; Microsoft (MSFT), Salesforce (CRM) also shine.

L3Harris (LHX) confirms deal to acquire Aerojet Rocketdyne (AJRD) for $4.7B.

mRNA (MRNA)-based cancer vaccines have limits, pioneer of the technology says.

Citi lists the contrarian bull and bear stock calls for 2023.

Credit card metrics climb closer to prepandemic levels in November.

It’s almost 2023, but here are the drugs the FDA could approve before the end of the year.

S&P 500 (SP500) ends lower for second straight week as recession fears spur selloff.

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