Before the Open (May 8-12)

Good morning. Happy Friday.

The Asian/Pacific markets leaned down. Japan did well, but China, Hong Kong, South Korea, Indonesia and the Philippines were weak. Europe, Africa and the Middle East are doing well. Denmark, Poland, France, Germany, South Africa, Norway, Hungary, Spain, the Netherlands and Italy are posting solid gains; Russia and the Czech Republic are down. Futures in the States point towards a positive open for the cash market.

————— VIDEO: Weekly Bar Charts Smooth Everything Out —————

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

Stories/News from Seeking Alpha…

Obesity review

The healthcare industry may be turning a corner with regard to weight loss and chronic obesity as a new generation of highly-effective drugs continues to make headlines. These GLP-1 agonists, like Novo Nordisk’s (NVO) Wegovy, as well as Eli Lilly’s (NYSE:LLY) dual-action Mounjaro, can help people lose anywhere from 10%-20% of their initial body weight. The medications are injected on a weekly basis, and make people feel satiated for longer by slowing hunger signals to the brain and the rate at which a person’s stomach empties.

Fine print: “The kind of communication that has been done around these drugs – ‘We’ve found a solution’ – that’s wrong,” said Francesco Branca, director of nutrition and food safety at the World Health Organization. “This is not a silver bullet,” he added, but must be “part of a comprehensive approach” that includes diet and exercise. It comes as the WHO conducts its first review of obesity management guidelines since 2000, which will evaluate the use of weight-loss drugs in children and adolescents, and will later update recommendations for adults.

In terms of statistics, the worldwide prevalence of obesity has nearly tripled between 1975 and 2016. In the U.S., one out of three U.S. adults is now obese (two out of three are overweight), and if the trends continue, estimates predict that roughly half of all men and women will be obese by 2030. This highlights the importance of Wegovy, which is approved for weight loss in the U.S. and Europe, and Mounjaro, which is expected to receive American approval later this year (it’s currently only authorized to treat Type 2 diabetes).

Outlook: Investors have cheered the potential of the drugmakers, sending shares of Novo Nordisk (NVO) and Eli Lilly (LLY) up 63% and 52%, respectively, over the past year. While there are supply concerns and prohibitive price tags on the consumer side, further profits may be in store with Medicare coverage and upgraded guidance, especially with the long-term need to stay on the shots for life. “The company now appears able to meet the high demand for its diabetes and weight loss products,” SA analyst Clinically Sound Investor writes in a new article entitled, Novo Nordisk Has Some Room To Run. (4 comments)

Three weeks away

The U.S. debt-limit gathering initially set for today between President Biden and congressional leaders, including House Speaker Kevin McCarthy, has been pushed to next week as staff keep negotiating. There was little progress after the group’s meeting on Tuesday, meaning the partisan standoff remains as the so-called X-date approaches as early as June 1. At the G7 finance ministers meeting this week in Niigata, Japan, Treasury Secretary Janet Yellen said she doubted whether the 14th Amendment would be an effective solution, saying “it’s legally questionable whether or not that’s a viable strategy.” JPMorgan (JPM) CEO Jamie Dimon also weighed on what would happen to stocks and Treasuries, adding that a default would be “potentially catastrophic” and the closer you get to it, the markets will “panic.” (15 comments)

Handguns for under 21s

U.S. District Judge Robert Payne of Richmond, Virginia, has ruled that banning licensed firearms dealers from selling guns to adults under the age of 21 is unconstitutional. “The Government simply has not met its burden… Founding-era militia laws provide circumstantial evidence that 18-to-20-year-olds could purchase, own, and use arms… Because the statutes and regulations in question are not consistent with our Nation’s history and tradition, they, therefore, cannot stand,” he wrote in the 71-page filing. The ruling, which the DOJ is likely to challenge, will not take effect until a final order is issued in the coming weeks. It may also put some focus on these gun stocks, but won’t impact the 19 states which have their own laws barring handgun sales to anyone younger than 21. (25 comments)

Is it over?

There are renewed concerns about regional banks following a heavy selloff on Thursday. PacWest (PACW) continued to plunge after pledging more collateral to allow for additional borrowing under the Fed’s discount window, while disclosing that it lost 9.5% of its total deposits last week. “These recent events, and the ongoing news coverage of these events, has increased certain risks and uncertainties related to our business and future prospects,” PacWest wrote in a filing. While some have expressed optimism that the worst of the banking crisis is over, others have been contemplating the risks that remain, and if stress in the sector will spill over into the broader economy. If you’d like to keep track of Wall Street’s biggest winners and losers throughout any market session, head over to Seeking Alpha’s On The Move section. (234 comments)

Today’s Economic Calendar
8:30 Import/Export Prices
10:00 Consumer Sentiment
1:00 PM Baker Hughes Rig Count
2:20 PM Fed’s Daly Speech
7:45 PM Fed’s Bullard: U.S. Economy and Monetary Policy

What else is happening…

Producer price inflation comes in cooler than expected in April.

Peloton (PTON) spins lower after recalling 2.2M exercise bikes.

Sell alert: 5 REITs that likely will cut their dividends.

Walgreens (WBA) offloads some shares of AmerisourceBergen (ABC).

Linda Yaccarino? Musk says he’s found a woman to lead Twitter.

Petrobras (PBR) to pay $5B in dividends but eyes potential changes. (JD) earnings give boost to Chinese tech stocks.

Pilots with Southwest Airlines (LUV) approve strike authorization.

10 best high-yield monthly paying ETFs you’ve never heard of.

J&J (JNJ) talc victim group seeks $30B in fraudulent conveyance complaint.


Good morning. Happy Thursday.

The Asian/Pacific markets leaned down. South Korea, Taiwan, New Zealand and Indonesia were weakest. Europe, Africa and the Middle East lean to the upside. Turkey is up 8%. Denmark, Russia, the Netherlands, Israel, Sweden and Saudi Arabia are doing well; Italy, Portugal, Austria and the Czech Republic are down. Futures in the States point towards a flat open for the S&P and positive open for the Nas.

————— VIDEO: Weekly Bar Charts Smooth Everything Out —————

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

Stories/News from Seeking Alpha…

Down to the border

It has been called a humanitarian crisis, an economic crisis and a national security crisis, as the border policy known as Title 42 comes to an end today. President Biden has even warned that the border will probably be “chaotic for a while,” and has sent an additional 1,500 active-duty troops there to help with the fallout. A significant surge in migration and illegal border crossings is expected, while lengthier processing times may result in dangerous overcrowding inside Border Patrol stations.

Backdrop: Title 42 is part of the Public Health Service Act, which was enacted by FDR in 1942. The measure was intended to suspend entries and imports from designated places to prevent the spread of communicable diseases, like tuberculosis, which was a big health concern at the time. It was later invoked in 2020 during the coronavirus pandemic, and essentially suspended immigration at U.S. land borders, by expelling many migrants who crossed the border illegally with the intention to ask for asylum or without proper documentation.

Publicly-traded operators of illegal immigration detention centers, CoreCivic (NYSE:CXW) and GEO Group (NYSE:GEO), are in the spotlight on the news, climbing 2.5% and 1%, respectively, in the premarket session. The Title 42 reversal is expected to result in more migrants entering the U.S. to claim asylum and could result in additional people being detained by Immigration and Customs Enforcement. Others point to the stocks’ flagging performance over past years, or political risk and lawsuits, while some even distinguish between the two companies, like analyst Double S Capital in SA article Short CoreCivic Against GEO: Both An Alpha Source And A Natural Hedge.

Go deeper: Going into effect will be tougher deportation consequences under Title 8 immigration law, a parole program with rigorous background checks, as well as higher standards for asylum seekers like forcing them to request protection in third countries on their way to the border. There are also plans to open dozens of regional processing facilities in Latin America, and push people to use the notably backlogged CBP One app for streamlining appointments at ports of entry. “I think that there is no question that this is going to be extremely challenging,” said Homeland Security Secretary Alejandro Mayorkas. “I do not want to understate the severity of the challenge that we expect to encounter.” (2 comments)

Overnight stock trading

While Robinhood (NASDAQ:HOOD) had called for an “even larger window of available trading hours” over a year ago, the company is finally moving forward with the plans. On an earnings call, CEO Vlad Tenev announced that his firm would be the first U.S. retail brokerage to offer 24/5 trading of a list of 40 well-known stocks and ETFs, and will look to “expand from there.” Activity is typically thin during current extended trading hours – which can start as early as 4 AM ET and end at 8 PM – but the move may give a new impetus to Robinhood shares, which have only gone south since the company’s IPO in mid-2021. The stock rose 5% in AH trading following results that beat estimates and upbeat guidance, though “after-hours” and “premarket” may soon become terms of the past. (25 comments)

Inflation report

Stocks mostly gained yesterday after April’s CPI data, which showed the pace of inflation rising 4.9% Y/Y, a hair under the +5.0% expected, and slightly easing from the March increase of 5.0%. Core inflation also eased slightly, while cooling in the super-core CPI, comprised of core services excluding shelter, may have further encouraged market participants. “It was a decent report, but nothing to write home about. The recent (demand-related) decline in commodity prices helped tremendously,” said SA analyst Leo Nelissen. “Although we have passed the peak of inflation and are experiencing disinflation, the momentum of the decline is losing steam. As a result, the Fed has a justification for pausing its hikes, as investors had already predicted due to the ongoing economic weakness.” Food prices are still high – will these stocks benefit? (281 comments)

House of Mouse

Walt Disney’s (DIS) earnings report mostly came in as expected, but streaming losses showed some quicker moderation than anticipated, sending the stock down 5% in extended trading on Wednesday. The company’s direct-to-consumer business took up much of CEO Bob Iger’s commentary on the earnings call, which offered what looked like some clarity about Disney’s approach to Hulu and related that “we’ve only just begun to scratch the surface of what we can do with advertising on Disney+.” Don’t forget Mouse House’s fight with Florida Governor Ron DeSantis: “This is about one thing and one thing only, and that’s retaliating against us for taking a position about pending legislation,” Iger declared. “Does the state want us to invest more, employ more people and pay more taxes, or not?” (44 comments)

Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 Producer Price Index
10:15 Fed’s Waller Speech
10:30 EIA Natural Gas Inventory
4:30 PM Fed Balance Sheet

What else is happening…

Town hall: Trump calls for U.S. debt default without spending cuts.

Icahn Enterprises (IEP) under federal investigation, gives lengthy rebuke.

Perrigo (PRGO) OTC birth control pill endorsed by FDA committees.

Roblox (RBLX) pops as investors applaud impressive bookings.

FHFA eliminates ‘unworkable’ debt-to-income ratio fee hike.

Chevron (CVX) plans to raise Venezuela oil output to speed debt recovery.

Occidental (OXY) would limit capex to enable buybacks if needed.

Report: Microsoft (MSFT) skips raises for employees, cuts bonuses.

Google (GOOGL) puts AI at center of I/O developer conference.

Livent (LTHM) to merge with lithium miner Allkem (OTCPK:OROCF) in $10.6B deal.


Good morning. Happy Wednesday.

The Asian/Pacific markets leaned down. New Zealand, Indonesia and the Philippines did well; Japan, China, Hong Kong, South Korea and Taiwan were weak. Europe, Africa and the Middle East currently lean up. Poland, Russia, Greece, South Africa, Finland, Norway and Israel are up; Hungary and Austria are down. Futures in the States point towards a moderate gap up open for the cash market.

————— VIDEO: Weekly Charts Smooth Everything Out —————

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

Stories/News from Seeking Alpha…

Inflation update

April’s consumer price index, to be released at 8:30 AM ET, will give economists and policymakers fresh data on whether the Fed is succeeding in bringing down the rate of inflation toward its 2% goal. March’s CPI showed inflation receding for nine straight months, “after the Federal Reserve awoke to the reality of high prices and began hiking rates in March of last year,” said Bankrate Senior Economist Mark Hamrick. Also see why SA Investing Group Leader Danil Sereda expects that the consensus estimates for April CPI may be too optimistic, and could lead to the repricing of forwarding fund rates.

By the numbers: With core CPI rising 5.6% Y/Y in March, inflation has ebbed from its peak of 9.1% last summer, but remains well above the Fed’s 2% goal. The April number is expected to show little if any progress, with economists expecting the headline CPI number to rise 0.4% in April, up from the 0.1% increase in March (on a Y/Y basis, that comes to a 5.0% rate, unchanged from the prior month’s rate). Core CPI, which excludes the volatile food and energy sectors, is also expected to increase 0.4%, unchanged from the March M/M increase (with a rise of 5.5% Y/Y vs. the March print of 5.6%).

As the Fed shifts to a meeting-by-meeting approach for its rate decisions, and insists that the data will inform those choices, each economic data point could spark market volatility, wrote Mott Capital Management’s Michael Kramer. “The CPI swaps market forecasts a significant drop in inflation between now and June, with the year-over-year rate of change falling to around 3%, and remaining between 3%-3.5% until the end of 2023. This makes the April number somewhat crucial, as the swaps market has generally been repricing inflation rates higher throughout the year.”

Outlook: Another big Fed consideration is the renewed volatility hitting the banking industry. Regional bank stocks continued their whipsaw action on Tuesday as concerns about deposits continued to unnerve the financial sector. Lots of fingers have been pointed at short sellers putting regional banks under undo pressure since the collapse of SVB, and has even prompted talk about whether the SEC should halt the short selling of regional bank shares. The regulator banned short selling on more than 1,000 banking stocks in 2008, but is such a drastic move likely in this scenario? (96 comments)

Belt gets tighter

It has been a controversial investment pact ever since the deal was signed in 2019, but Italy is reportedly ready to pull out of China’s Belt and Road Initiative. The country is the only G7 nation part of what President Xi Jinping refers to as the “project of the century,” or what critics call a “debt trap” designed to create political goodwill and cement Chinese influence on the world stage. Like much of Europe, especially after Russia’s invasion of Ukraine, Italy has found itself caught in escalating tensions between the U.S. and China – with regard to trade, investment, infrastructure and sensitive technologies. The potential move would have profound effects on some of Italy’s largest companies, as well as other investment decisions, like using executive power to limit the influence of a major Chinese shareholder Sinochem on tire maker Pirelli (OTC:PRLLY). (2 comments)

Going after everything

Industry rivals are watching as Twitter continues to take steps toward becoming an “everything app.” Elon Musk has revealed that new features like “voice and video chat” will be coming to the service, as well as encrypted direct messages, bringing the platform in line with other social media offerings like Instagram, WhatsApp and Facebook (NASDAQ:META). In a quest towards becoming a super app, Twitter recently inked a partnership with eToro that’ll let users trade stocks and crypto, though the bigger fish range from payments and shopping to financial services and entertainment. Speaking of the latter, ousted Fox News (NASDAQ:FOX) host Tucker Carlson just announced he would relaunch his show on Twitter, which will help boost the platform’s content creator community via subscription revenue and advertising. (7 comments)

Sohn Investment Conference

While he’s not predicting one, hedge fund investor Stan Druckenmiller sees the potential for a 2008-like recession or worse. A hard landing likely includes a 20%+ decline in corporate profits, unemployment going to above 5%, and increases in bankruptcies, he explained at the 2023 Sohn Investment Conference. “It’s naive not to be open-minded to something really, really bad happening. Again, it is not my forecast, but as a risk manager it has been part of my matrix and my equation thinking about it.” Regarding stock picks at the conference, Greenlight Capital’s David Einhorn pitched German auto part supplier Vitesco Technologies (OTCPK:VTSCY), while more recognizable names included Sony (SONY), Mirati Therapeutics (MRTX) and others. (74 comments)

Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Consumer Price Index
10:00 Atlanta Fed’s Business Inflation Expectations
10:30 EIA Petroleum Inventories
1:00 PM Results of $35B, 10-Year Note Auction
2:00 PM Treasury Statement

What else is happening…

Biden says debt meeting ‘productive,’ McCarthy doesn’t see ‘movement.’

Survey results on whether emergency procedures may resolve debt crisis.

Paramount (PARA) to cut 25% of workforce across entertainment units.

IBM (IBM) unveils Watsonx, a new generative AI platform.

Airbnb (ABNB) slides 12% after Q2 outlook disappoints.

Sale of Manchester United (MANU) gets closer to conclusion.

Rivian (RIVN) on track to produce 50K vehicles in 2023.

Twilio (TWLO) plunges as sales forecast falls short of expectations.

Free shipping? AMZN, FDX and UPS continue to tighten delivery options.

Retire comfortably: Leo Nelissen flags two 7% yielding dividend gems.


Good morning. Happy Tuesday.

The Asian/Pacific markets were mixed. Japan and Hong Kong did well; China was weak. Europe, Africa and the Middle East are currently suffering big losses. Denmark, France, Russia, South Africa, Finland, Switzerland, Norway, Hungary, Spain, the Netherlands, Italy, Portugal, Israel, Austria and Sweden are down. Futures in the States point towards a moderate gap down open for the cash market.

————— VIDEO: State of the Market —————

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

Stories/News from Seeking Alpha…

The bull bellows

The Nasdaq Composite (COMP.IND) has officially exited a bear market as investors continue to pile back into tech stocks that have been shunned for much of the past year. A slight gain of 0.2% on Monday saw the popular index end the session at 12,256.92, up 20% from its closing low of 10,213.29 on Dec. 28. It took just 89 trading days for the index to record the new milestone, and follows a similar path of the related Nasdaq 100 Index (NDX), which surged into a new bull market back in March.

Bigger picture: Investors are taking note as the Nasdaq Composite (COMP.IND) is the first major market benchmark to regain its bull stature. Elsewhere, the S&P 500 (SP500) is up 16% since its last lows seen in October 2022, while the Dow Jones Industrial Average (DJI) is up 17% since this past September. Only another 3%-4% move will see the two indices restore their bull market status, but some are debating the technicals and what the near future may hold.

“After this powerful earnings season and a more favorable environment from the Fed, the Nasdaq looks poised for a breakout,” writes SA Investing Group leader Bill Gunderson, after calling a bottom back in January. Others, like contributor Fountainhead, are more cautious, citing a need to conserve cash as creeping complacency calls for a correction. Recall that the Nasdaq last exited a bear market in August 2022, and only two months later, it entered a bear market again, slumping 20% from its high by October. It’s taken seven months since then for the Nasdaq to become a bull, which could make the rally more durable, or possibly lend credence to those calling the recent bullish trends a trap.

Nas…what? When analysts, journalists and reporters refer to the Nasdaq, they mean the Nasdaq Composite (COMP.IND), and not the Nasdaq 100 (NDX). The difference between the two is that the Nasdaq Composite measures the change in more than 2,500 stocks listed on Nasdaq Stock Exchange (NDAQ), while the Nasdaq 100 is a market cap-weighted index made up of the 100 largest non-financial companies traded on the exchange. However, both track domestic and international firms, compared to popular indices like the Dow Jones Industrial Average, which only measures the largest American companies. (4 comments)

Debt ceiling

President Biden today is scheduled to meet with House Speaker Kevin McCarthy and other top congressional leaders for high-stakes talks on the nation’s debt limit. While an immediate breakthrough is unlikely, it will set the tone for fiscal negotiations that’ll be the talk of financial markets in the coming weeks. Ahead of the action, Treasury Secretary Janet Yellen is reportedly lobbying for help, reaching out to U.S. business and financial leaders to explain the “catastrophic” impact a default would have on the economy. Sources told Reuters that she’s having one-on-one conversations with individual CEOs to warn them about the “dangerous consequences of the current brinkmanship,” just a day after describing what would happen if an agreement failed to materialize on Capitol Hill. (6 comments)

Critical materials

No automaker in North America currently refines its own lithium, but Tesla (NASDAQ:TSLA) is looking to change that by breaking ground on a $375M refining facility in Corpus Christi, Texas. The move will help the EV pioneer ease its supply chain and meet ambitious EV sales targets, as it expands outside its core focus of car manufacturing and into raw materials. Elon Musk, who previously likened lithium refining to “printing money,” expects the new Tesla plant to produce enough battery-grade lithium to build 1M electric vehicles by 2025. “Texas wants to be able to be self-reliant, not dependent upon any foreign hostile nation for what we need,” Texas Governor Greg Abbott added at the ceremony. “We need lithium.” (5 comments)

The pause that refreshes

Fed funds futures are pricing in a Fed pause and stocks may have to make hay while the sun shines as rates stay steady. Once the cuts start, equities tend to struggle, according to BTIG, with history showing that the S&P (SP500) (SPY) slumps when the FOMC starts loosening (see the full breakdown and chart here). On a more bullish note, Stifel boosted its price target on the S&P for year-end, with its strategists expecting inflation to “drop sharply.” Meanwhile, AI is still the big buzz in earnings calls. BofA looks at what this means for capex spending in tech, noting that Healthcare (XLV) tops all S&P sectors for both top-and-bottom-line beats this season (sell how the other 10 sectors did as well). (70 comments)

Today’s Economic Calendar
6:00 NFIB Small Business Optimism Index
12:05 PM Fed’s Williams Speech
1:00 PM Results of $40B, 3-Year Note Auction

What else is happening…

Fed’s SLOOS shows banks are continuing to tighten loan standards.

JPMorgan (JPM) alleges Staley hampered efforts to cut Epstein ties.

PayPal (PYPL) slips as guidance disappoints, while Palantir (PLTR) soars.

Disney (DIS) expands suit against DeSantis after voided land deals.

Tyson Foods (TSN) stumbles on trimmed outlook; pulls down peers.

U.S. to propose new rules for airline cancellations and delays.

Occidental Petroleum (OXY) begins buying back Buffett’s preferred stock.

Oil watch: Saudi Aramco (ARMCO) posts 20% drop in Q1 profits.

LinkedIn (MSFT) cuts employees, shuts down China-focused app.

Amazon (AMZN) is looking at offering original videos to other outlets.


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

The Asian/Pacific markets mostly did well. China, Hong Kong, South Korea, India, Australia and Thailand led; the Philippines were weak. Europe, Africa and the Middle East are currently mostly up. The UK, Denmark, Poland, Turkey, Germany, South Africa, Norway, Spain and Austria are up the most. Futures in the States point towards a flat (S&P 500) to down (Nasdaq) open for the cash market.

————— VIDEO: State of the Market —————

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

Stories/News from Seeking Alpha…

‘No good options’

The clock is ticking for a divided U.S. Congress to raise the federal government’s debt ceiling, which currently stands at $31.4T, but risks running out of cash as soon as June 1. Razor-thin margins in Congress are complicating the matter, as only a handful of rejections could derail any deal, and concessions are a lot harder to come by, with extreme flanks enveloping both sides of the debt limit debate. While President Biden has invited House Speaker Kevin McCarthy to a meeting on Tuesday, things can quickly spiral in the danger zone, and is one of three make-or-break crises now impacting the U.S., according to SA contributor ING.

Quote: “It’s simply unacceptable for Congress to threaten economic calamity for American households and the global financial system as the cost of raising the debt ceiling and getting agreement on budget priorities,” Treasury Secretary Janet Yellen told ABC’s This Week. “Even as we get very close to this date, if Congress doesn’t act, we’re likely to see financial market consequences. There is no way to protect our financial system and our economy other than Congress doing its job and raising the debt ceiling and enabling us to pay our bills.”

As the U.S. gets closer to the brink of a default, talk has even circulated about possible emergency options that could be used to circumvent a disaster. Some ideas that have surfaced include invoking the 14th Amendment, as well as the trillion-dollar coin and issuing debt with coupons above current yields. While President Biden on Friday said he’s “not gotten there yet” regarding using an option like the 14th Amendment, Janet Yellen was slightly more forthcoming about what would happen if an agreement failed to materialize on Capitol Hill.

Go deeper: “We should not get to the point that we would need to consider whether the President can go on issuing debt – this would be a constitutional crisis,” she declared. “If they fail to do it, we will have an economic and financial catastrophe that will be of our own making, and there is no action that President Biden and the U.S. Treasury can take to prevent that catastrophe.” When pressed to answer whether there is a “break glass” alternative, Yellen didn’t appear to rule anything out, but said she didn’t want to consider emergency procedures as there were “simply no good options.” (180 comments)

Woodstock for Capitalists

Thousands of Berkshire Hathaway (BRK.A, BRK.B) shareholders and other investors flocked to Omaha, Nebraska, this weekend to hear Warren Buffett and Charlie Munger speak at an event known as the “Woodstock for Capitalists.” The annual meeting came on the heels of an impressive set of earnings from the conglomerate, which owns and invests in a wide range of businesses from insurance to industrials. The discussion spanned a wide range of topics, including the economy, AI, Bitcoin, and CEO succession, while Buffett opened up about several stock positions, including his comment that Berkshire does not plan to acquire control of Occidental Petroleum (OXY). See other key takeaways from SA contributor Fishtown Capital. (52 comments)

Reparations plan

California’s reparations task force, which first convened nearly two years ago, has given the final approval to a list of recommendations on how the state may compensate and apologize to Black residents for historical discrimination. “Reparations are not only morally justifiable, but they have the potential to address long-standing racial disparities and inequalities,” Representative Barbara Lee (D-CA) declared. The proposals now go to state lawmakers to consider reparations legislation and a final sum, which some economists estimate could cost the state upwards of $800B, or almost 3x the state’s annual budget. To be initially eligible, applicants must be a descendant of Black people who were in the country by the end of the 19th century, though there are not yet details on how the payments would be funded. Age, state residence, and other factors will also play a role in determining compensation. (29 comments)

The narrative

The market has priced in a much-anticipated pause in the Fed tightening cycle, which many hope will give the green light to equities, though some caution that cuts aren’t really bullish for stocks based on historical patterns. Fed funds futures predict a 90% chance that the Fed keeps rates at 5% to 5.25% at the June meeting and more than a 70% chance that cuts begin in September. The discussion follows the strong April jobs report, which confirmed that the economy remains resilient, according to SA Investing Group Leader Dan Victor, while contributor Jeremy LaKosh cites signs of normalization but cautions that the constrained supply side of the labor market remains inflationary. With the non-farm payrolls report out of the way, investors are now paying close attention to CPI numbers due out Wednesday. (7 comments)

Today’s Economic Calendar
10:00 Wholesale Inventories (Preliminary)
12:30 PM Investor Movement Index

What else is happening…

Regional banks revived Friday after a brutal week. What’s next?

Spending on weight loss drugs to rise exponentially through 2027.

Coke (KO) vs. Pepsi (PEP): Which is the better buy for dividends?

Travel & leisure hiring may stay hot despite recessionary risks.

Activist Nelson Peltz said to be targeting Estee Lauder (EL).

Was selling overdone? AI fears hit these stocks this earnings season.

Tucker Carlson said to be prepping for war against Fox News (FOX).

U.S. pipeline regulator aims to toughen rules for detecting methane leaks.

After impressive Q4, what’s in store for Palantir’s (PLTR) earnings?

Generative AI is all the rage. Tim Cook is asking for caution.

Concerns raised over OTC use of Perrigo’s (PRGO) birth control pill.

The winners: Best investment idea for a potential recession competition.


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