Before the Open (Nov 6-10)

Good morning. Happy Friday.

The Asian/Pacific markets were weak. China, Hong Kong, South Korea, Australia, Malaysia, Indonesia, Singapore and Thailand led to the downside. Europe, Africa and the Middle East are currently mostly down. The UAE and Hungary are up; the UK, Poland, France, Germany, Greece, South Africa, Finland, the Netherlands, Sweden and Saudi Arabia are down. Futures in the States point towards a moderate gap up open for the cash market.

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

Stories/News from Seeking Alpha…

High alert

Ransomware attacks are on the rise, posing new challenges to companies, businesses and entities in an age when nearly everything is done online. New technologies, open banking and the expansion of remote transactions have all made the task of cybersecurity even more critical, and those that fail to meet the moment can risk their entire systems. Another wakeup call this week showed the extent of the potential disruptions, with a ransomware attack on the world’s largest bank interrupting settlements in the U.S. Treasury market.

What happened? Sources say that LockBit, a notorious cyber group with ties to Russia, infected the Industrial & Commercial Bank of China, one of the globe’s biggest banks by assets. While the market’s overall functioning remained intact, the cyber attack prevented swathes of Treasury transactions from clearing and prompted deals to be rerouted. Bloomberg even reported that trades “traversed Manhattan on a USB stick,” with the ICBC forced to send the “required settlement details to those parties by a messenger carrying a thumb drive to limit the damage.”

“We are aware of the cyber security issue and are in regular contact with key financial sector participants, in addition to federal regulators,” declared a spokesperson at the U.S. Treasury Department. “We continue to monitor the situation.”

Not the first time: Suspected perpetrator Lockbit has also been linked to hits on Boeing (BA), while there have been other recent attacks and ransoms paid by Clorox (CLX), Caesars (CZR) and MGM Resorts (MGM). The latest cyber incident at ICBC, an institution deemed systemically important by the Financial Stability Board, will be on the radar of the entire financial system, especially given its impact on the liquidity of U.S. Treasuries. According to cybersecurity firm Corvus Insurance, ransomware attacks have nearly doubled in the first three quarters of this year, compared with the same period in 2022.

Meta moves

Meta Platforms (META) is eyeing a return to China, 14 years after Facebook was banned in the country. The firm inked a preliminary deal with Tencent (OTCPK:TCEHY) to sell a lower-priced version of its virtual-reality headset Quest in China, with sales expected to start late next year. The deal would allow Meta to compete with TikTok-owner Bytedance (BDNCE), which makes the VR headset Pico. In other news, U.S. Amazon (AMZN) shoppers can now directly buy products from Facebook and Instagram ads, a feature that will likely boost Meta’s ad revenue, similar to Pinterest’s (PINS) Amazon Ads partnership. (2 comments)

Hawkish comments

The S&P 500’s (SP500) eight-day winning streak has come to an end following hawkish comments from Fed Chair Jerome Powell and a disappointing government debt auction. It would have been the benchmark index’s largest streak since 2004 and the 32nd such feat since 1928. Powell warned that the FOMC was “not confident” it had achieved a level of sufficiently restrictive monetary policy and it wouldn’t hesitate on further tightening if warranted. Following the speech, JPMorgan said his comments were a reminder that the Fed still has a tightening bias, while SA analyst Leo Nelissen feels that, “Powell just told the markets to calm it with the dovish expectations.” (101 comments)

Union support

Following the wins at the Detroit Three, President Biden said he fully supports efforts by the United Auto Workers to unionize other carmakers – like Tesla (TSLA), Toyota (TM) and Honda (HMC). Polls currently show that a higher percentage (65%-72%) of Americans support unions than five years ago. Toyota has said the decision to unionize is ultimately made by its team members, and while analysts largely agree that Tesla will not be unionized, it would likely have to raise wages to some degree to stay competitive. UAW President Shawn Fain expects the next labor contract negotiating round in 2028 to include 5-6 automakers, but the road to that target could be very bumpy. (28 comments)

Today’s Economic Calendar
7:30 Fed’s Logan’s Speech
9:00 Fed’s Bostic: “Economic Mobility and Challenges in the Community”
10:00 Consumer Sentiment
1:00 PM Baker Hughes Rig Count
2:00 PM Treasury Statement

What else is happening…

ChatGPT slowly dents Google’s (GOOG, GOOGL) search dominance.

Nvidia (NVDA) plans to announce 3 new chips for Chinese market.

Apple (AAPL) faces potential setback in €13B tax order case in EU.

Plug Power (PLUG) plunges as losses mount amid supply woes.

Trade Desk (TTD) slides 28% after conservative sales forecast.

Palladium prices dip below $1,000 for the first time since 2018.

BlackRock’s (BLK) plan for ethereum (ETH-USD) ETF is confirmed.

Iridium (IRDM) tumbles as Qualcomm (QCOM) kills satellite deal.

Groupon (GRPN) plummets on sales decline, 2024 revenue outlook.

Hawaiian Electric (HE) will delay quarterly filings due to Maui fire fund.


Good morning. Happy Thursday.

The Asian/Pacific markets were mixed and little changed. Only Japan (up more than 1%) moved up. Europe, Africa and the Middle East leans to the upside, with noteable movers in both directions. The UK, France, Germany, Finland, Switzerland, Norway, Spain, the Netherlands, Italy and Sweden are up; Denmark, Turkey, the UAE, Greece, Israel and Saudi Arabia are down. Futures in the States point towards a positive open for the cash market.

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

Stories/News from Seeking Alpha…

The end

A lot of headlines have been coming out of the media sector over the past 24 hours, putting a fresh spotlight on the industry. Hollywood actors have inked a tentative agreement with major studios following an unprecedented 118-day strike, in a move that can allow entertainment companies to restock their content libraries. Tense negotiations had previously centered around minimum salaries and residuals for streaming programs, as well as compensation protections against the use of artificial intelligence.

Bigger picture: The end of the actors’ strike comes after writers and studios reached an agreement in late September to end a strike between the two sides. The walkouts had supercharged other labor action across America, from strikes enveloping the United Auto Workers union and hospitality employees in Las Vegas, to ones that were averted beforehand, like UPS vs. the Teamsters. Major studios like Netflix (NFLX), NBCUniversal (CMCSA) and Paramount (PARA) were all part of the latest drama that postponed many a production, but that wasn’t all, as Hollywood took over earnings season this week.

Despite some nervousness surrounding the direction of the Mouse House, shares of Disney (DIS) climbed 4% AH on Wednesday after revealing aggressive cost-cutting and stronger-than-expected growth in streaming subscriptions. Profits were also seen at ESPN+, but a decrease in ad revenue continued to prompt speculation that Disney could finally sell its TV assets. The advertising meltdown was even more apparent at Warner Bros. Discovery (WBD) as the stock plunged 19% amid debt warnings and comments from CEO David Zaslav that the industry is going through a “generational disruption.” Even the box office blockbuster Barbie – which was released during the quarter – couldn’t come to the rescue, though fresh movie titles did help move some other stocks.

Coming soon: Shares of Nintendo (OTCPK:NTDOY) got a boost after the company revealed that a live-action adaptation of its popular Zelda franchise was in the works. The film would follow up on the success of The Super Mario Bros. Movie, which has generated more than $1B in sales. The Japanese entertainment giant even hiked its full-year forecast due to its foray into showbiz, with hopes that popular characters like Zelda on the big screen can drive more users to gaming and its console the Switch. (8 comments)

New relationship?

U.S.-China ties will be in focus as Treasury Secretary Janet Yellen hosts Chinese Vice Premier He Lifeng today and tomorrow to discuss topics including U.S. concerns about Beijing’s trade practices. Yellen has repeatedly insisted that the U.S. is seeking healthy economic competition, which requires a level playing field for American firms, while Chinese counterpart Han Zheng has recently indicated that ties were improving. Yellen’s meeting comes ahead of the much-awaited summit between President Biden and Xi Jinping next week. Will the meetings lead to decoupling, derisking, or a new U.S.-China economic relationship?

Wegovy rival

The FDA has cleared Eli Lilly’s (LLY) GLP-1 receptor agonist Zepbound (tirzepatide) as a weight loss treatment, meaning Novo Nordisk’s (NVO) Wegovy will finally get a formidable challenger in the U.S. obesity drug market. Tirzepatide was previously available as the highly successful Mounjaro to treat Type 2 diabetes. Investing Group Leader Dividend Sensei sees a big crash after Mounjaro-mania sent Lilly’s stock to the moon, with a potential downside of 60%. The popularity of weight loss drugs is growing quickly, with analysts expecting them to hit consumer industries including food and beverages, though others have downplayed these fears. (29 comments)

Self-driving recall

General Motors’ (GM) self-driving unit Cruise is recalling 950 driverless cars across the U.S. and may file additional recalls, soon after its decision to temporarily halt production of its autonomous Cruise Origin vehicle. The recalls are being done to update the collision detection subsystem of the Cruise Automated Driving Systems software, which caused a collision with a woman in San Francisco, who was then dragged for about 20 feet. The software wrongly characterized it as a lateral collision and directed the robotaxi “to attempt to pull over out of traffic, pulling the individual forward.” Soon after the incident, California suspended Cruise’s permits in the state, eventually prompting the company to pause all operations.

Today’s Economic Calendar
8:30 Initial Jobless Claims
9:30 Fed’s Bostic’s Speech
10:30 EIA Natural Gas Inventory
11:00 Fed’s Barkin: “Outlook for the U.S. Economy and Fed Policy”
12:00 PM Fed’s Kathleen: U.S. Economy and Monetary Policy
1:00 PM Results of $24B, 30-Year Bond Auction
2:00 PM Jerome Powell’s Speech
4:30 PM Fed Balance Sheet

What else is happening…

ArcelorMittal (MT) may be lead bidder for U.S. Steel (X).

Macro uncertainty: Arm (ARM) drops in first results after IPO.

Roblox (RBLX) surges on beat; will give outlook next year.

Weekly mortgage applications rise as interest rates fall.

U.S. Household Debt Defaults At ‘Millennial’ Highs.

Twilio (TWLO) soars as Q3 results, guidance top expectations.

Robinhood drops as muted trading activity weighs on results.

Amazon (AMZN) offers One Medical benefit for Prime members.

Plug Power (PLUG) Q3 preview: Eyes on near-term profitability.

Morgan Stanley (MS) wealth management unit under Fed probe.


Good morning. Happy Wednesday.

The Asian/Pacific markets leaned down. Japan, Hong Kong, South Korea, New Zealand, Indonesia and Singapore were weak. Europe, Africa and the Middle East are little changed. Denmark, France, Germany, South Africa and Finland are up; Poland is down. Futures in the States point towards a flat open for the cash market.

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

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

Stories/News from Seeking Alpha…

High in Ohio

Recreational marijuana is coming to the Buckeye State after Ohio voters approved a ballot measure to legalize adult cannabis use for non-medical purposes. It’s a big deal as it makes Ohio the 24th state to approve recreational pot, in addition to Washington, D.C., meaning nearly half of all U.S. states now embrace such a stance. The latest approval also shows how the sentiment is expanding to more parts of the country, like the Midwest, after Minnesota and Missouri approved similar measures over the past year.

Fine print: The passage of “Issue 2” means that people aged 21 and over in Ohio will be able to buy up to 2.5 ounces of weed and 15 grams of concentrates. Regarding cultivation, up to six plants will be allowed per person, or 12 plants per household, regardless of the number of adults living in the private residence. Note that the statutory question was decided through a voter-approved initiative, instead of a constitutional amendment via the state legislature, meaning lawmakers in Ohio’s General Assembly will have the ability to alter, or even repeal, its provisions. Smoking pot in America is more popular than cigarettes

Recreational legalization is expected to generate hundreds of millions of dollars in annual cannabis tax dollars for Ohio, as well as thousands of new jobs to support the new economy. Cannabis market research firm BDSA even expects legal U.S. cannabis sales to grow 14% to $36.5B by the end of 2023, though investors trying to gain exposure to the sector have not yet seen such promising returns. Multistate operators like Cresco Labs (OTCQX:CRLBF), Curaleaf (OTCPK:CURLF), Green Thumb Industries (OTCQX:GTBIF) and Trulieve Cannabis (OTCQX:TCNNF) have seen negative returns in recent years, as have cannabis-related funds like the AdvisorShares Pure Cannabis ETF (NYSEARCA:YOLO) and ETFMG Alternative Harvest ETF (NYSEARCA:MJ).

Outlook: There has been momentum for legalization at the federal level, with last year’s introduction of the Cannabis Administration and Opportunity Act in the Senate and the Marijuana Opportunity Reinvestment and Expungement Act in the House. President Biden also asked the DOJ and HHS to “review expeditiously how marijuana is scheduled under federal law,” where it remains a Schedule I drug under the Controlled Substances Act of 1970. The illegal classification on the federal level makes it complicated for companies to operate within their own state borders, as many business activities and banks are regulated by federal law, as well as taxes, trademarks, and legal processes like bankruptcy. (8 comments)

Swipe away

Americans’ credit card debt swelled $154B Y/Y to a record $1.08T in Q3, according to the Federal Reserve Bank of New York, notching the largest increase since it began tracking household debt in 1999. Interestingly, millennials saw the most credit card delinquencies. “Credit card balances experienced a large jump, consistent with strong consumer spending and real GDP growth,” said Donghoon Lee, economic research advisor at the NY Fed. Bankrate analyst Ted Rossman also noted that credit card balances have been increasing faster than any other type of debt amid high inflation and record-high credit card rates, adding that “more people are using credit cards just to get by.” (23 comments)

No smoking

The British government will introduce legislation to raise the legal age for smoking cigarettes every year, King Charles III confirmed at the state opening of the Parliament. The major crackdown, proposed by Prime Minister Rishi Sunak last month, would effectively create the first smoke-free generation in the U.K. The proposed law would ensure that children currently aged 14 or younger can never be sold cigarettes, and will restrict the sale and marketing of e-cigarettes to children. Analysts have warned that the ban could spread to other European countries, impacting leading tobacco companies like Imperial Brands (OTCQX:IMBBY), Japan Tobacco (OTCPK:JAPAF), British American Tobacco (BTI) and Philip Morris (PM). (40 comments)

Demand concerns

Energy (XLE) was at the bottom of Tuesday’s S&P sector leaderboard, ending 2.2% lower and contributing nine of the day’s 15 biggest losers on the S&P 500 (SP500). Oil tumbled to its lowest levels since late August, with Nymex crude (CL1:COM) for December delivery falling to as low as $76.51/bbl, while January Brent crude (CO1:COM) slid to an intraday low of $80.86/bbl. Demand worries have replaced Middle East geopolitical fears to weigh on crude prices, with analysts pointing to disappointing China trade data. Notable S&P 500 decliners included Schlumberger (SLB) -5.6%, Marathon Oil (MRO) -4.1%, Constellation Energy (CEG) -3.9%, and EQT Corp. (EQT) -3.8%. (42 comments)

Today’s Economic Calendar
5:15 Fed’s Cook: “Financial Stability”
7:00 MBA Mortgage Applications
9:15 Jerome Powell Speech
10:00 Wholesale Inventories (Preliminary)
10:30 EIA Petroleum Inventories
1:00 PM Results of $40B, 10-Year Note Auction
1:40 PM Fed’s Williams: “Research & Statistics at 100: A Look at the Past, Present & Future”
2:00 PM Fed’s Barr: “Community Reinvestment Act”
4:45 PM Fed’s Jefferson’s Speech

What else is happening…

Deutsche Bank: Automakers won’t make affordable EVs anytime soon.

Xi Jinping to meet U.S. execs amid efforts to calm foreign investors.

Wall Street’s top 10 growth stocks, according to SA Quant Ratings.

Amazon (AMZN) developing AI model ‘Olympus’ to rival OpenAI.

Even with earnings misses, Uber’s (UBER) demand has grown.

Rivian rallies after formally ending Amazon (AMZN) exclusivity deal.

Upstart (UPST) slumps after results, Q4 guidance disappoints.

Goldman Sachs (GS) plans to offload GM (GM) credit card program.

Nintendo (OTCPK:NTDOY) making ‘Legend of Zelda’ live-action film.

D.R. Horton (DHI) earnings beat consensus as demand holds up.


Good morning. Happy Tuesday.

The Asian/Pacific markets posted solid losses. The Philippines did well, but Japan, Hong Kong, South Korea, Indonesia and Thailand were weak. Europe, Africa and the Middle East are mostly weak. Israel is up, but Poland, France, Greece, South Africa, Norway, Italy, Portugal, Austria and Sweden are down. Futures in the States point towards a down open for the cash market.

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

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

Stories/News from Seeking Alpha…


Just four years after it was assigned a $47B valuation, office-sharing company WeWork (WE) has filed for Chapter 11 bankruptcy protection, marking a big fall from grace for a firm that attracted major investment from the likes of SoftBank (OTCPK:SFTBY) and JPMorgan (JPM). WeWork listed both assets and liabilities in a range of $10B-$50B, while entering into a restructuring support agreement with ~92% of its secured noteholders. In addition, the company will “further rationalize its commercial office lease portfolio” as it undergoes a restructuring, which only impacts its operations in the U.S. and Canada.

What went wrong? Cracks began to emerge as the spotlight fell on founder Adam Neumann’s leadership style, which emphasized breakneck growth at all costs, even at the expense of long-term profits. Along with several conflicts of interest, the financial turmoil led to his ouster and the derailment of an IPO that was scheduled for 2019. Major shareholder SoftBank finally stepped in to turn things around, doubling down on investment, upending management, and eventually taking the company public via SPAC, though it was not able to cut costs fast enough to support operations.

WeWork managed to restructure many of its leases and reduce rent, though this happened at the same time as the COVID pandemic and a new work-from-home model that kept people away from shared office spaces. Demand suffered significantly, and a high-interest rate environment ensued, giving many landlords little incentive to grant further breaks on their contracts. Profitability also continued to remain elusive for hundreds of WeWork locations across dozens of countries, and while the company reached a sweeping debt restructuring agreement in early 2023, financial troubles came back to bite again. In mid-August, WeWork announced a 1-for-40 reverse stock split to meet NYSE listing requirements, only to disclose a “substantial doubt” about its ability to stay in business.

“WeWork has a strong foundation, a dynamic business, and a bright future,” current CEO David Tolley declared. “Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet. I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the Restructuring Support Agreement. We remain committed to investing in our products, services, and world-class team of employees to support our community.”

Thought bubble: The downfall of one of the most promising startups of the 2010s is a big lesson for many investors. Among them is being aware of just how quickly a business environment can change and how to diversify risks in relation to that reality. Other downsides relate to “growth at all costs,” as well as giving a deeper analysis of financials and management. The herd mentality of venture capital firms, Wall Street and other investors saw many overlook the need for a proof of concept, and to date, WeWork has never posted a quarterly operating profit in its 14-year history. (27 comments)

Office space

As commercial real estate continues to be pressured by maturing debt, Barclays warns their prices could slide further. Prices for office buildings have dropped about 20%-30% from peak levels, and there may be “more pain to come,” with offices yet to feel the full extent of the Fed’s aggressive rate hiking cycle. Prices for “high-quality” buildings will likely fall around 40%, while distressed properties may only fetch the cost of the land. “The continued deterioration in the commercial real estate space is likely to be a key factor in the recession I see ahead in 2024,” added SA Investing Group Leader Bret Jensen.

Self-driving dreams

General Motors (GM) is suspending production of the autonomous Cruise Origin van, just two weeks after its Cruise unit paused operations nationwide. At a company meeting, Cruise CEO Kyle Vogt said hundreds of Origin vans were already made, which would be “more than enough” for the near term. As for claims that its robotaxis might not actually be driverless, Vogt confirmed that they require remote support “2%-4% of the time.” GM previously projected that Cruise could earn up to $50B in revenue per year from 2030, a target that may be at risk due to the California ban, according to Investing Group Leader JR Research.

Fundamentals matter again

As we come to the end of free money, interest rate normalization, and the return to fundamentals, opportunities in growth and value will lead the market, explained Chris Davis, chairman at Davis Advisors. The long-time Berkshire Hathaway (BRK.B) investor said the price of money was distorted and manipulated for over a decade. “We’re just in the early innings of this unwinding,” he said, noting that investors should focus on characteristics like durability and resiliency. Davis also explained that the repricing of money is a return to normalcy, forecasting a “hangover” from popping the bubble of the fixed-income markets. This was already seen during the regional bank (KRE) crisis, and it will affect private equity and venture capital, as well as certain parts of commercial real estate. (23 comments)

Today’s Economic Calendar
8:30 Goods and Services Trade
9:15 Fed’s Barr: “Financial Technology”
9:50 Fed’s Schmid: “Energy and the Economy: Reshuffling the Energy Deck”
10:00 Fed’s Waller: “Using Economic Data to Understand the Economy”
12:00 PM Fed’s Williams’ Speech
1:30 PM Fed’s Logan: “Energy and the Economy: Reshuffling the Energy Deck”
1:00 PM Results of $48B, 3-Year Note Auction
3:00 PM Consumer Credit

What else is happening…

WSB survey results: Are there times short-selling should be banned?

Mizuho’s top 7 tech stocks with even more growth opportunity.

Tesla (TSLA) may produce a €25,000 EV out of Germany.

Kinder Morgan (KMI) to buy NextEra’s (NEP) Texas pipelines.

Citigroup (C) mulls cutting 10% of staff in major businesses.

Bumble CEO to exit, ex-Salesforce (CRM) exec to succeed.

Cigna (CI) exploring potential sale of Medicare Advantage.

Lucid is latest to switch to Tesla’s (TSLA) charging standard.

Disney (DIS) taps longtime PepsiCo (PEP) exec as new CFO.

Realty Income (O) earnings beat driven by acquisition volume.


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

The Asian/Pacific markets posted huge gains. Japan, China, Hong Kong, South Korea, India, Taiwan, New Zealand, Malaysia, Indonesia, Singapore and the Philippiens all participated. Europe, Africa and the Middle East lean to the upside. Denmark, Poland, Turkey, the UAE, Russia and Greece are doing well; France and Germany are down. Futures in the States point towards a slight up open for the cash market.

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

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

Stories/News from Seeking Alpha…

Caught short?

South Korea is prohibiting stock short-selling until June 2024, in a move that triggered a big rally for equities and increased trading volumes. The benchmark KOSPI and the tech-heavy KOSDAQ soared 5.7% and 7.3%, respectively, resulting in both indexes closing out their best session since late March 2020. Short-selling is an investment strategy in which traders or hedge funds sell borrowed shares with the aim of buying them back later at a lower price. It’s a risky and costly strategy that requires a margin account and collateral, with the potential for unlimited losses as the stock’s price can rise indefinitely.

Snapshot: “The [South Korean] measure is aimed at fundamentally easing ‘the tilted playing field’ between institutional and retail investors,” Financial Services Commission Chairman Kim Joo-hyun said at a news briefing. “Amid continued uncertainty in financial markets, major foreign investment banks have been engaged as a matter of practice in unfair trades… and we determined that it would be impossible to maintain fair trading discipline.” The regulator added that it will also implement a zero-tolerance approach to illegal practices like naked short-selling, with a special investigation team to be established and “perpetrators facing criminal prosecution.” Naked Short Selling: What It Is & How It Works

To note, South Korea had already banned short-selling during the coronavirus pandemic. The ban was lifted in May 2021 for trades of companies on the KOSPI and KOSDAQ with large market caps, but the restrictions have remained in place for more than 2,000 equities. It comes as a vocal group of retail investors has continued to complain about the impact of shorting, influencing public perception ahead of general elections for the National Assembly in April. However, according to exchange data, short-selling in South Korea only accounts for a fraction of the market, about 0.6% of the KOSPI and 1.6% of the KOSDAQ.

Over in the U.S.: The SEC has issued controversial bans on the short-selling of certain stocks before, covering hundreds of financial equities during the financial crisis of 2008, and it was again discussed during the banking crisis earlier this year. Many have cited that regulatory intervention was needed, at times, to protect companies and stabilize the market, which could have real-world effects like spooking depositors or prompting bank runs. Others have argued that the restrictions were not only unnecessary, but actually harmed market quality, stability and discovery. In turn, those could impact liquidity and pricing efficiency, while short-sellers may use other instruments like futures, options and swaps to get around any bans. SEC approves new rules on short sales and securities lending disclosures

Record cash

Investors were watching Warren Buffett’s performance over the weekend as Berkshire Hathaway (BRK.B) (BRK.A) reported a 41% Y/Y jump in Q3 operating earnings. The results were driven by strong numbers in its insurance divisions, which were partially offset by profit declines in utilities, energy and railroad businesses. Berkshire’s cash pile also grew to a record $157B, prompting some acquisition speculation. SA analyst Cavenagh Research was surprised by Buffett’s decision to slow down stock buybacks, but said he “continues to favor investment in Treasuries over equities.” About 78% of Berkshire’s $318.6B of equity holdings, at fair value, were concentrated in American Express (AXP), Apple (AAPL), Bank of America (BAC), Coca-Cola (KO), and Chevron (CVX). (239 comments)


Burger King, owned by Restaurant Brands International (QSR), will not expand its plant-based offerings in the U.S. in the near term. “It’s not a big part of the current focus,” said Restaurant Brands CEO Josh Kobza, but noted that demand for such options is stable. Kobza added that plant-based options are more popular internationally, particularly in western Europe. Producers of plant-based meat substitutes have been buckling under fading popularity and weak consumer demand. Beyond Meat (BYND) previously provided a grim outlook, while Archer-Daniels-Midland (ADM) warned of demand softness and destocking in the plant-based protein market persisting into 2024. (1 comment)

Epic battle

Fortnite maker Epic Games is now taking Alphabet’s (GOOG, GOOGL) Google to court over antitrust claims related to the Play Store’s payment system. Epic, which will open arguments in a jury trial today, is not seeking financial compensation, but is calling for changes to Google’s practices. The gaming company claimed that Google has been illegally driving up fees and restricting rivals from distributing apps directly. “These claims are baseless,” responded Wilson White, VP of government affairs & public policy at Google. Epic filed a similar case against Apple (AAPL) in 2021, but it lost on most counts and both companies have asked the Supreme Court to review the ruling. Google is already facing a landmark antitrust case from the Department of Justice, one that has made Barclays increasingly concerned. (2 comments)

Today’s Economic Calendar
12:30 PM Investor Movement Index

What else is happening…

Recap: S&P 500 (SP500) caps stunning reversal from correction territory.

Elon Musk unveils ChatGPT rival Grok with real-time access to X info.

Oil prices edge up after Saudi Arabia, Russia stick to production cuts.

Rising retail theft seen threatening brick-and-mortar model’s viability.

More failures? Silicon Valley Bank (OTCPK:SIVBQ) was not a one-off.

EV stocks have lost their buzz – partnerships could be the new plan.

Ant Group gets Chinese government nod for release of AI products.

Biden admin proposes carbon storage projects in national forests.

Palo Alto (PANW) may shell out $600M-$700M for Israeli cyber startup.


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