Before the Open (Nov 13-17)

Good morning. Happy Friday.

The Asian/Pacific markets leaned down. Japan did well, but Hong Kong, South Korea and New Zealand were weak. Europe, Africa and the Middle East are currently posting solid gains. Hungary is down, but the UK, Denmark, France, Turkey, Germany, Greece, Finland, Switzerland, Norway, Spain, the Netherlands, Italy and Sweden are up. Futures in the States point towards positive open for the cash market.

————— Audio Course: Guidelines to Successful Trading – the Intangibles —————

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

Stories/News from Seeking Alpha…

New bear in town

It wasn’t too long ago that many were talking about triple-digit oil prices, but things have since been going in the opposite direction. U.S. benchmark West Texas Intermediate has now fallen into a bear market, tumbling more than 20% from its last high of $95 at the end of September. A drop of 5% on Thursday to under $73 a barrel cemented the new milestone, setting up oil for its fourth weekly loss, with a combination of factors attributing to its fall from grace.

Too much supply: Swelling inventories and rising U.S. stockpiles are changing market dynamics, with the latest estimates from the EIA far exceeding expectations. There are also growing signs of non-compliance within OPEC+ over the group’s recent production cuts, while a Western price cap meant to dent Russia’s oil revenue has largely failed.

Too little demand: The global economic outlook is weakening, especially in China, which is the world’s largest importer of crude. Refiners there have cut their daily processing rates, suggesting that more clouds and economic headwinds are on the horizon.

Too many premiums: Prices rose in the summer after additional output and export cuts by OPEC+, and were later helped out by fears of war in the Middle East. Those fears have failed to materialize as the conflict appears to be contained to Israel and Hamas, without disrupting oil supplies from nearby regions.

Too little fundamentals: Commodity traders have been laser-focused on key technicals given the speed at which oil broke below $90 and $80 support levels, as well as softness along the oil futures curve. Those pricing patterns saw both WTI and Brent front-month contracts trade in contango and were likely magnified by automated selling systems.

What to watch: The market is looking to the next OPEC+ meeting in Vienna, which will take place a week from Sunday. The group recently forecast that “global oil market fundamentals remain strong,” but that could change as they reconsider extending or deepening their production cuts. Disagreements among the cartel have led to volatile environments and several price wars over the past decade, and there will likely be some difficult discussions this time around to prevent another one from happening.

Auto disruption

Amazon (AMZN) is breaking into the auto retail sector through a partnership with Hyundai Motor (OTCPK:HYMTF). Buyers will have the option to buy the vehicles on the e-commerce giant’s website and then pick it up from their local dealer. Hyundai also named AWS as its preferred cloud provider, adding that the Alexa Built-in experience is coming to its next-generation vehicles. The partnerships will be noted in the industry, as it adds incremental competition for auto retailers such as Carvana (CVNA), CarMax (KMX), Vroom (VRM) and AutoNation (AN). (53 comments)

Bunsen burner steaks

Italy has banned the production and sale of lab-grown meat, in line with the government’s efforts to defend the country’s traditional culinary culture. “Italy is the first nation in the world to be safe from the social and economic risks of synthetic food,” said Agriculture Minister Francesco Lollobrigida. While the EU hasn’t yet cleared the sale of lab-grown meat, other countries have begun such approvals. Singapore was the first to allow such meat, followed by the U.S. in June. Separately, American producers of plant-based meat substitutes like Beyond Meat (BYND) have been buckling under fading popularity and weak consumer demand. (12 comments)

Shutdown averted

President Biden has signed a short-term government funding bill passed by Congress, avoiding a federal shutdown and pushing the debate over the federal budget into next year. The bill maintains government spending at current levels for two more months, giving lawmakers time to negotiate appropriations bills for the rest of the fiscal year. The measure also doesn’t include the $106B that the White House requested for Israel and Ukraine aid, as well as humanitarian funding for Palestinians and other supplemental requests. Congress is expected to focus on that when legislators return to the Capitol in two weeks.

Today’s Economic Calendar
8:30 Housing Starts and Permits
8:45 Fed’s Barr: “Payments”
8:45 Fed’s Collins: “Rethinking Full Employment”
9:30 Fed’s Daly’s Speech
9:45 Fed’s Goolsbee: U.S. Economy
10:00 E-Commerce Retail Sales
10:00 Quarterly Services Report
10:15 Fed’s Collins’ Speech
1:00 PM Baker Hughes Rig Count

What else is happening…

Retail watch: Warning at Walmart (WMT), Gap (GPS) keeps outlook.

UAW workers clear deal with GM (GM), Ford (F) and Stellantis (STLA).

Alibaba (BABA) plunges on revenue miss, cloud spinoff plan scrapped.

IBM (IBM) halts advertising on X after ads run next to pro-Nazi content.

Gene editing stocks in focus after world’s first CRISPR (CRSP) drug nod.

Applied Materials (AMAT) under probe for evading export controls.

ChargePoint (CHPT) plunges on CEO exit, slashed revenue outlook.

Good sign for Qualcomm? Apple (AAPL) struggles to build iPhone chip.

Mastercard (MA) exec says CBDC adoption would be difficult right now.

Starbucks’ (SBUX) Red Cup Day rolls on despite strikes at U.S. stores.


Good morning. Happy Thursday.

The Asian/Pacific markets leaned down. India did well, but China, Hong Kong, Australia and New Zealand posted moderate losses. Europe, Africa and the Middle East currently lean to the downside. Turkey, the UAE, Israel and Saudi Arabia are up; the UK, South Africa, Finland, Norway, Hungary, the Netherlands and Sweden are down. Futures in the States point towards negative open for the cash market.

————— Audio Course: Guidelines to Successful Trading – the Intangibles —————

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

Stories/News from Seeking Alpha…

Retail radar

Economic data is front and center this week following the latest releases of the Consumer Price Index and Retail Sales. The latter inched down 0.1% M/M compared to the consensus for a fall of 0.3%, further exciting investors hoping for resilience in consumer spending without attracting too much attention from the Fed. If things get too hot, hawkish rhetoric could weigh on markets again, but in the meantime, it looks like things are in a sweet spot for a soft landing.

Bigger picture: Inflationary price tags, high interest rates and the return of student loan payments were thought to prompt many Americans to hold back on opening their wallets, but that doesn’t appear to be the case. A strong labor market has helped keep spending afloat across the economy, with new revisions even showing that the blowout retail reports from the summer were even better than initially estimated. Those trends are expected to continue with Black Friday only a week away, followed by the traditional holiday spending spree.

On the sell side, some companies are handling their financials better than others, with a focus on cost controls, inventory management and margin improvements. That makes all the difference in the current environment, especially when Wall Street expects a whole lot worse. Home Depot (HD), TJX (TJX), Walmart (WMT) and Macy’s (M) all beat on the top and bottom line this week, but Target (TGT) really smashed it out of the park. TGT shares soared about 18% during the session on Wednesday following two years of disappointing results stemming from C-suite missteps and misreading consumer sentiment.

What to watch: “On the positive side, GDP, employment and overall consumer spending have been resilient, and we’re beginning to see a recovery in consumer confidence,” Target CFO Michael Fiddelke said on an earnings call. “On the other side of the ledger, while we’re happy to see inflation rates begin to moderate, that’s likely to cause some near-term pressure on dollar comps in our frequency categories. In addition, the upcoming resumption of student loan repayments will put additional pressure on the already strained budgets of tens of millions of households. Against this backdrop, we remain cautious in our planning, an approach that has served us really well so far this year.” (22 comments)

China recap

The highly-anticipated meeting between President Biden and his Chinese counterpart Xi Jinping ended with agreements to open high-level dialogue, while Xi called on Biden to lift unilateral sanctions and provide a non-discriminatory environment for Chinese companies. Other issues went unresolved and tensions were apparent. As Xi met with American business executives Wednesday evening, Biden highlighted the difference between the two economic systems during a press conference, repeating comments from earlier this year that described Xi as a “dictator. ” Despite a downward spiral in relations, SA Quant strategist Steven Cress also weighed in on Biden-Xi meeting, listing the top three Chinese stocks to buy that can offer upside amid its slowing economy. (19 comments)

Climate action

Making Big Oil a “villain” and trying to restrict fossil fuels will slow the path to net zero emissions, according to Exxon Mobil (XOM) CEO Darren Woods. “Climate change is real,” he said at the Asia Pacific Economic Cooperation CEO Summit in San Francisco, but added that oil and gas offer “unmatched” benefits, and the existing global energy system is “too vast” to replace any time soon. Woods reiterated that Exxon would not cut oil and gas production, but will invest in low-carbon technologies that complement fossil fuels. The executive previously pushed back against the IEA’s prediction that fossil fuel demand will peak by 2030, saying the shift to clean energy will require continued investment in oil and gas. (38 comments)

Starship & Starlink

The FAA has cleared SpaceX’s (SPACE) Starship, the world’s biggest rocket, for a second launch, nearly seven months after the first attempt ended in flames. Elon Musk-led SpaceX plans to conduct Starship’s second flight test tomorrow, with a two-hour launch window opening at 8 AM ET. The license authorization applies to all phases of the operation, including liftoff from Texas and the rocket’s water landing in the Pacific Ocean. Recent reports have also suggested that SpaceX’s internet satellite service called Starlink (STRLK) could IPO late next year, but Musk was quick to shoot those down, calling the rumors “false” in a reply on social media. (1 comment)

Today’s Economic Calendar
7:10 Fed’s Barr: “Bank Supervision and Regulation”
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
8:30 Import/Export Prices
8:30 Fed’s Mester: “Financial Stability in Times of Macroeconomic Uncertainty”
9:15 Industrial Production
9:25 Fed’s Williams’ Speech
10:00 Housing Market Index
10:30 Fed’s Waller: “Central Bank Digital Currency”
10:30 EIA Natural Gas Inventory
10:35 Fed’s Barr: “Financial Stability”
11:00 Kansas City Fed Mfg Survey
12:00 PM Fed’s Mester: “Financial Stability in Times of Macroeconomic Uncertainty”
12:00 PM Fed’s Cook: “Global Linkages and Spillovers”
4:00 PM Treasury International Capital
4:30 PM Fed Balance Sheet

What else is happening…

Microsoft (MSFT) unveils new AI chips at Ignite conference.

Orders slow: Cisco (CSCO) plunges after cutting revenue guidance.

Report: Activist investor ValueAct takes stake in Walt Disney (DIS).

UBS lists 14 high-conviction stock ideas, including Apple (AAPL).

Palo Alto Networks (PANW) tumbles on new 2024 billings forecast.

Eli Lilly (LLY) eyes billion-dollar German plant amid GLP-1 shortage.

PepsiCo (PEP) sued by New York over single-use plastic packaging.

Walgreens (WBA) said to be close to £5B pension risk transfer deal.

Goldman Sachs channels Taylor Swift for 2024 stock market outlook.


Good morning. Happy Wednesday.

The Asian/Pacific markets posted big gains. Japan, China, Hong Kong, South Korea, India, Taiwan, Australia, New Zealand, Malaysia, Indonesia, Singapore, Thailand and the Philippines all rallied at least 1%. Europe, Africa and the Middle East currently lean to the upside. The UK, France, Germany, South Africa, the Netherlands, Austria, Sweden, Saudi Arabia and the Czech Republic are leading; Denmark, Poland and Portugal are down. Futures in the States point towards positive open for the cash market.

————— Audio Course: Guidelines to Successful Trading – the Intangibles —————

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

Stories/News from Seeking Alpha…


Investors are bringing out their champagne glasses to celebrate the latest CPI report, which was “clearly a shock to the consensus” as the rate of inflation fell more than expected in October. Stocks soared and Treasury yields tumbled after headline inflation flatlined month-on-month, an impressive feat that has so far excluded the start of a recession. Core inflation numbers were also striking, with the figure climbing by a lower-than-expected 4% Y/Y to mark the lowest reading since September 2021.

SA commentary: “I have been preaching for the past year that the rate of inflation would fall as fast as it rose, and this report supports that assertion,” Investing Group Leader Lawrence Fuller, author of The Portfolio Architect, wrote to the applause of many subscribers. “Today’s report ends the discussion of rate hikes and should also end the discussion about rates staying higher for longer… It looks like the little guy was one step ahead of Wall Street this time around. The professional money management community has been extraordinarily bearish as of late, which means there is plenty of fuel left for our year-end rally.”

That couldn’t be seen any clearer than in the latest 13F filing from famed “Big Short” investor Michael Burry. While the quarterly filings don’t signal exactly when he exited his Q2 stake, or outline precisely what hedge funds are up to, Burry’s Scion Asset Management said it no longer held 2M puts on the SPDR S&P 500 ETF (SPY) and 2M puts on the Invesco QQQ Trust (QQQ), which totaled about $1.6B. The bearish bets follow many forecasts by Burry in recent years that predicted “the mother of all crashes,” and rhetoric that referred to the current market environment as the “greatest speculative bubble of all time by two orders of magnitude,” and “as I said about 2008, it is like watching a plane crash.”

What to watch: The market’s celebration saw the Nasdaq (COMP.IND) exit correction territory on Tuesday, with the “Magnificent Seven” adding more than $200B to their market caps. But it wasn’t just the elite group of tech stocks. Small-caps, which have lagged their large-cap peers in 2023, also played some major catch-up over the session, with the Russell 2000 (IWM) closing up 5.4% and lifting the index into positive territory for the year. Following the enthusiasm, Lawrence Fuller had one more insight to add when sizing up Fedspeak ahead of the last FOMC meeting of the year. “Powell has to keep the hawkish bent for fear that what is happening today continues… a melt up in stocks and collapse in market rates – that can be inflationary.” (2 comments)

Kicking the can?

U.S. House lawmakers have passed a temporary spending bill, in a win for the newly-elected Speaker Mike Johnson. The bill will now go to the Senate for a vote, where it is widely expected to pass. Senate Majority Leader Chuck Schumer lauded the measure “that excludes hard-right partisan cuts and poison pills with a strong bipartisan vote,” while hardline Republican Representative Mike Garcia said it wasn’t ideal, “but a shutdown is a far worse world to be in.” The two-part stopgap bill would fund some government operations through Jan. 19 and the rest through Feb. 2, meaning there could be another shutdown deadline on Groundhog Day. (8 comments)

Back to business

All eyes are on California, where President Biden and his Chinese counterpart Xi Jinping will meet on the sidelines of the APEC summit today to help cool escalating tensions between the countries. “It would be naive to expect this meeting to result in breakthrough developments, but I am optimistic this meeting will steer the two countries in the right direction to manage geopolitical risks better,” said Investing Group Leader Dilantha De Silva. Catering to multinationals that might boost the Chinese economy, Xi will also meet with a group of high-profile CEOs to shore up investor confidence. Meetings are expected with Tesla’s (TSLA) Elon Musk, Microsoft’s (MSFT) Satya Nadella, Exxon Mobil’s (XOM) Darren Woods, and Citigroup’s (C) Jane Fraser, among other executives. (1 comment)

Wall Street South

Noting that Florida has an environment that encourages growth, Ken Griffin, founder of hedge fund Citadel, believes Miami could eventually replace New York as the world’s financial center. Major Wall Street firms have been shifting to the Sun Belt in recent years on account of lower taxes, cheaper real estate and labor, and warmer weather compared to New York. Citadel already moved its global headquarters to Miami from Chicago in 2022, close on the heels of hedge funds owned by Carl Icahn and Paul Singer relocating to Florida from New York. The exodus of big money can also have other big implications, like the billions in tax revenues paid to states. (2 comments)

Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Producer Price Index
8:30 Retail Sales
8:30 Empire State Mfg Survey
9:30 Fed’s Barr: “Oversight of Prudential Regulators”
10:00 Business Inventories
10:00 Atlanta Fed’s Business Inflation Expectations
10:30 EIA Petroleum Inventories
3:30 PM Fed’s Barkin: “The Housing Challenge”

What else is happening…

Home Depot (HD) beats even as customers opt for smaller projects.

YouTube will require creators to disclose AI-generated videos.

Amazon (AMZN) to run in-app shopping ads on Snapchat (SNAP).

Warren Buffett’s Berkshire (BRK.B) exits GM (GM), Activision bets.

Ray Dalio’s Bridgewater boosts stake in 3M, exits Apple (AAPL).

Bill Ackman’s Pershing Square ups stake in Alphabet (GOOG).

The best-selling sedan in America has gone all-hybrid.

Boeing (BA) trails Airbus (OTCPK:EADSF) in October jet deliveries.

Pfizer’s (PFE) Paxlovid linked to far higher rate of COVID rebound.

Adobe (ADBE) may face EU antitrust warning on $20B Figma deal.


Good morning. Happy Tuesday.

The Asian/Pacific mostly posted small-to-moderate gains. Japan, China, South Korea and Australia did the best. Europe, Africa and the Middle East are currently mostly up. Denmark, Poland, Germany, Greece, South Africa, Finland, Spain, Italy, Sweden and Saudi Arabia are up; Russia is down. Futures in the States point towards a flat-to-up open for the cash market.

————— Audio Course: Guidelines to Successful Trading – the Intangibles —————

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

Stories/News from Seeking Alpha…

Inflation watch

The latest indicator on inflation will be published today at 8:30 AM as the Labor Department releases its report on the Consumer Price Index for October. Investors are hoping that there will be signs that inflation continues to dissipate, but if those signs aren’t there or there are surprises, it could risk the chance of another interest rate hike in December. Another item to be aware of is new changes to the calculation methodology of health insurance costs. That could result in the category becoming a net contributor to inflation, and will be noted by market watchers and the Federal Reserve.

By the numbers: October’s CPI is expected to rise only 0.1% M/M, compared with a 0.4% increase in September. On a Y/Y basis, it’s expected to rise by 3.3%, down from 3.7% in the previous month. Core CPI, which excludes food and energy, is anticipated to increase by 0.3% M/M, the same rate of increase as in September. Y/Y, economists, on average, project a 4.1% rise in October, also unchanged from the September rate of inflation.

A downside surprise on CPI “could spark another drop in yields and boost risk asset prices in a way that reignites the year-end rally,” according to SA Investing Group Leader Lawrence Fuller. Others, like Mott Capital Management, see a bigger chance that it will surprise to the upside, especially due to the rise in health insurance. “The data and forecasts seem to indicate that healthcare costs will be rising starting with this October report, and if that is the case, the case for inflation sticking around for some time only seems to strengthen.”

Half full or half empty? There are many ways in which progress has been seen with regard to price pressures, while the economy and labor market remain on solid footing. Headline inflation is down significantly from the 7% seen at the beginning of the year, and it will take additional time to go from the current 3% clip to the Fed’s desired 2% target. Others see things as more entrenched, especially when looking at core inflation. The elimination of the pandemic and supply chain disruptions were the low-hanging fruit, and underlying price pressures are proving stickier by showing some recent signs of stalling out.

Shutdown risk

U.S. House Speaker Mike Johnson’s two-part stopgap federal funding plan is set to face a vote in the House, with the plan widely expected to get blocked and raising the risks of a partial government shutdown. Some hardline House Republicans are already against the plan as it doesn’t include spending cuts, while the White House also denounced the proposal, with President Biden likely to veto the measure. The burgeoning deficit and political polarization in the U.S. are the main reasons why Moody’s recently cut its credit-rating outlook. SA analyst Damir Tokic expects Moody’s to eventually downgrade U.S. debt too, as fiscal stability remains threatened by current political dynamics. (26 comments)

New sportsbook

Competing with FanDuel (OTCPK:PDYPY) and DraftKings (DKNG) for online sports betting market share, ESPN BET will go live today in 17 U.S. states ahead of the busy slate of college and pro games during Thanksgiving week. Significant integration is expected between ESPN BET, the rebranded version of Penn Entertainment’s (PENN) sportsbook, and ESPN’s media content. The launch comes at a time when Disney (DIS) is looking to sell a minority stake in ESPN, with companies like Amazon (AMZN) and Apple (AAPL) speculated as potential buyers. SA analyst Juxtaposed Ideas is now cautiously bullish on Penn, given the potential reversal in its prospects due to ESPN BET. (33 comments)

Turkey Day tickets

Thanksgiving air travel is expected to reach record levels this year as demand remains strong despite high inflation weighing on consumer confidence. Airlines for America – a trade group representing major passenger airlines like United (UAL) and Delta (DAL) – said U.S. carriers expect an all-time high of nearly 30M travelers during Nov. 17-27. It also anticipated Nov. 26 to be the busiest day of the holiday period, a forecast echoed by the TSA. Roads will be busy as well, with AAA expecting 55.4M travelers to head 50 miles or more from home over the Thanksgiving holiday period, up 2.3% Y/Y. (1 comment)

Today’s Economic Calendar
5:30 Fed’s Jefferson’s Speech
6:00 NFIB Small Business Optimism Index
8:30 Consumer Price Index
10:00 Fed’s Barr: “Oversight of Financial Regulators”
11:00 Fed’s Mester: “Conversations on Central Banking: The Unequal Burden of Inflation”
12:45 PM Fed’s Goolsbee: U.S. Economy and Monetary Policy

What else is happening…

WSB survey results: U.S. should derisk and diversify in China relationship.

OPEC ups global oil demand forecast, says weak sentiment exaggerated.

Exxon (XOM) to drill first Arkansas lithium well, aims to be top EV supplier.

Fisker (FSR) slides as revenue misses expectations, 10-Q filing delayed.

Teck Resources (TECK) nears deal to sell coal business to Glencore.

McDonald’s (MCD) leveraging Grimace popularity with Crocs shoe collab.

Anthem, Cigna’s (CI) Express Scripts settle last claim in $14.8B lawsuit.

Alphabet (GOOG, GOOGL) ditches Robinhood (HOOD) stake, filing shows.

Mega plane order and possible China thaw send Boeing’s (BA) stock flying.

Marc Lore’s Wonder Group officially swallows up Blue Apron (APRN).

Bank of America lists top 10 most and least shorted stocks by hedge funds.


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

The Asian/Pacific leaned down. Hong Kong and Taiwan did well, while India, Australia, New Zealand and the Philippines were weak. Europe, Africa and the Middle East are currently mostly up. The UK, Denmark, Poland, South Africa, Norway, Spain, the Netherlands, Italy or Portugal are up; Turkey and Israel are down. Futures in the States point towards a down open for the cash market.

————— Audio Course: Guidelines to Successful Trading – the Intangibles —————

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

Stories/News from Seeking Alpha…

Next steps

Following increased outreach from the Biden administration, the leaders of the world’s two largest economies are set to meet this week on the sidelines of the Asia-Pacific Economic Cooperation summit in San Francisco. On the agenda are issues tied to regional stability amid rising geopolitical tensions, as well as “fair” trade and economic relations. The last time President Biden met with Xi Jinping was at the G20 summit in Indonesia a year ago, and tensions have only escalated since then with tech export controls, the Chinese spy balloon incident, and increased displays of U.S. support for Taiwan.

Quote: “The Chinese have basically severed those [U.S.-China military] communication links,” U.S. National Security Advisor Jake Sullivan told CNN’s State of the Union. “We need those lines of communication so that there aren’t mistakes or miscalculations or miscommunication. President Biden would like to reestablish them and he will look to this summit as an opportunity to try to advance the ball on that.”

The economic side appears to be just as big of an equation, with mixed ideas of how to structure that relationship with the potential for serious repercussions. How much subsidies should be granted stateside to prop up industries like semiconductors and electric vehicles? Artificial intelligence and quantum computing? Should Trump-era tariffs still be retained to encourage reshoring or manufacturing in more hospitable countries? Or what about new trade alliances and the remapping of critical supply chains?

Go deeper: Laying the groundwork for the San Francisco summit was Treasury Secretary Janet Yellen, who met with Chinese Vice Premier He Lifeng last week to “strengthen communication and dialogue at all levels.” Following two days of meetings, she had the following to say on what things might look like going forward. “We do not seek to decouple our economy from China’s. This would be damaging to both the U.S. and China and destabilizing to the world, but a healthy economic relationship requires American workers and firms to be treated fairly.” Take the WSB survey.

Ballooning costs

Earlier this year, Microsoft (NASDAQ:MSFT) invested in OpenAI to the reported tune of $10B, but the latter is seeking even more cash from the tech giant as it looks to create sophisticated models of artificial general intelligence. “Training expenses are just huge,” OpenAI CEO Sam Altman declared. “You have this research lab, you have this API, you have the partnership with Microsoft, you have this ChatGPT thing, now there is a GPT store. But those aren’t really our products. Those are channels into our one single product, which is intelligence – magic intelligence in the sky.” Artificial intelligence is seen as a catalyst that recently catapulted MSFT shares to all-time highs, as well as the company’s recent quarterly results. (9 comments)

Credit watch

Citing heavier downside risks to the country’s fiscal strength, Moody’s late on Friday dropped its credit-rating outlook on the United States to negative from stable. “The sharp rise in U.S. Treasury bond yields this year has increased pre-existing pressure on U.S. debt affordability. In the absence of policy action, Moody’s expects [United States] debt affordability to decline further, steadily and significantly, to very weak levels compared to other highly rated sovereigns.” Deputy Treasury Secretary Wally Adeyemo disagreed with the stance, ahead of another potential government shutdown at the end of this week. “The American economy remains strong, and Treasury securities are the world’s preeminent safe and liquid asset,” he said in a statement mailed to media outlets. (235 comments)

Oil reassessment

It was only a month ago that many analysts predicted triple-digit oil prices, but many of those forecasts have changed in recent weeks with WTI crude (CL1:COM) now trading under $80 a barrel. Demand worries were raised last week as Chinese refiners asked for less supply for December, which helped counteract the fear of production outages related to war in the Middle East. However, some maintain that analysts are still not looking in the right places and need to reevaluate the supply side of the equation. “Smugglers, dark fleet operators, thieves and black market dealers are working overtime washing and gushing oil produced or stolen from Russia, Iran, Kurdistan, and Nigeria,” noted Manish Raj, managing director at Velandera Energy Partners. (160 comments)

Today’s Economic Calendar
11:00 Fed’s Cook Speech
12:30 PM Investor Movement Index

What else is happening…

U.S. banking system less vulnerable than pre-2008 GFC – NY Fed.

This company topped Tesla to become most shorted S&P 500 stock.

New weight loss drug: Eli Lilly (LLY) expected to add $4.1B in U.S. sales.

South Carolina Senator Tim Scott abruptly ends 2024 presidential bid.

Air Force said to begin test flights of Northrop’s (NOC) B-21 bomber.

UBS sees pickup in mergers and acquisitions next year.

Nike (NKE), Target (TGT) lead retailers among biggest Q3 decliners.

How to monetize? Apple (AAPL) is working on generative AI.

Wynn Resorts (WYNN) inks labor deal with Las Vegas culinary workers.

Foreign investor appetite for U.S. debt could abate when Fed starts easing.


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