Before the Open (Jan 22-26)

Good morning. Happy Friday.

The Asian/Pacific markets were mostly weak. South Korea did well, but Japan, Hong Kong, Indonesia and Thailand were weak. Europe, Africa and the Middle East are currently mostly up. The UK, France, Turkey, South Africa and Switzerland are up more than 1%, and Denmark, Finland, Norway, the Netherlands and Italy are also doing well. Futures in the States point to a down open for the cash market.

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

Stories/News from Seeking Alpha…

The Roaring Twenties?

Economic reports are continuing to pour in with a stellar GDP print on Thursday that energized the markets. The benchmark S&P 500 (SP500) notched its fifth consecutive record following the reading, while the Dow Jones Industrial Average (DJI) reached another all-time high. The Nasdaq (COMP.IND) also tacked on gains, but some tech sentiment was hurt after-hours on weak guidance from Intel (INTC) (see more below).

Quote: “People are getting ahead,” Treasury Secretary Janet Yellen said in remarks at the Economic Club of Chicago. “Instead of contracting, the economy has continued to grow. They’re seeing their fortunes improve, and I believe that if inflation stays low, they’ll begin to regain their confidence in the economy. It’s a good thing, reflective of strong, healthy spending and productivity improvements, and most likely not creating an inflationary challenge.”

Speaking of inflation, the Fed’s favorite inflation gauge, known as the core personal consumption expenditures price index, will be published Friday at 8:30 AM ET. The measure is expected to have risen 0.2% in December from November, representing an increase of 3.0% Y/Y. That would mark another success for the central bank, which continues to get closer to its 2% goal despite fears of last-mile challenges. Any incoming data will also help guide monetary policymaking, with things looking bright for the economy on the horizon.

Know your onions: Ed Yardeni, founder of Yardeni Research, sees a “Roaring 2020s” scenario as a base case, drawing parallels between the Spanish flu pandemic and COVID-19, while projecting the S&P 500 will reach 5,400 in 2024. “Our basic premise is that a chronic shortage of labor is forcing companies to use technological innovations to boost their productivity growth, which started to improve last year, according to the government’s quarterly data. As a result, inflation remains subdued, while real GDP growth, real wage growth, and profit margins all get boosted. The Fed is likely to ease, but won’t have to cut the federal funds rate by much. Stock investors do very well.”

Bleak outlook

Intel’s (INTC) significantly weaker-than-expected guidance overshadowed a continued rebound in PCs, dragging its stock down 11% in extended trade on Thursday. The company expects Q1 revenue to be $12.2B-$13.2B, well below the $14.3B analysts were anticipating, and guided for adjusted EPS of $0.13, compared to a consensus of $0.42. “While we expect a slightly sub-seasonal Q1 from our core product businesses, we see material inventory corrections in Mobileye and PSG,” CFO David Zinsner said on an earnings call. Investing Group Leader Quad 7 Capital called the guidance “painful,” saying it stemmed from pressures in data center and AI. “While this segment is the source of massive future growth, the market may have gotten ahead of itself bidding shares up.” (78 comments)

Houthi hostilities

Chinese officials have reportedly called on their Iranian counterparts to help end Houthi attacks on ships in the Red Sea or risk harming business ties between the two countries. Note that China is the biggest trading partner of Iran, which has been the biggest backer of the Houthis and the so-called “Axis of Resistance.” U.S. and U.K. retaliatory military strikes on Houthi targets in Yemen have so far failed to deter the group from targeting commercial ships in the Red Sea, which have been ongoing since mid-November. The Houthis had originally said they would target Israeli-linked ships to show solidarity with Hamas, but that extended to all ships en route to Israel, and then widened to other vessels regardless of its destination. (1 comment)

Digital dilemmas

The Florida House of Representatives this week passed bipartisan legislation that bans minors under the age of 16 from creating social media accounts, and requires platforms to terminate minors’ existing profiles and verify account holders’ ages. “Social media use correlates with increasing mental health challenges among children,” declared Florida House Speaker Paul Renner, adding that the bill would “prevent this from happening to another generation.” Note that the legislation would not apply to websites used for email, messaging, and online shopping, likely causing confusion over which companies need to comply with the law. Other U.S. states have tried to limit social media access for minors, but their efforts have been blocked by lawsuits. (30 comments)

Today’s Economic Calendar
8:30 Personal Income and Outlays
10:00 Pending Home Sales
1:00 PM Baker Hughes Rig Count

What else is happening…

Tesla (TSLA) spins lower after earnings – now down 27% in 2024.

Apple (AAPL) unveils biggest changes to iOS, App Store since launch.

Microsoft (MSFT) to lay off 1,900 Activision Blizzard, Xbox employees.

Payment volume at Visa (V) misses, expense guidance increases.

Jamie Dimon shakes up top JPMorgan (JPM) executive leadership.

Boeing’s (BA) situation ‘not tenable,’ Bank of America says in downgrade.

GM’s (GM) Cruise takes the blame for response to October accident.

Levi Strauss (LEVI) to cut workforce by up to 15%, posts mixed results.

Paramount (PARA) records strong gain as layoffs, merger talk make news.


Good morning. Happy Thursday.

The Asian/Pacific markets leaned to the upside. China, Hong Kong, Taiwan, Australia and Malaysia did well; India, Indonesia and Thailand were weak. Europe, Africa and the Middle East currently lean down. Turkey, Finland and Hungary are up; France, Greece, Germany, Sweden, Spain, Italy, Portugal and Israel are down. Futures in the States point to a positive open for the cash market.

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

Stories/News from Seeking Alpha…

In need of a charge

Is Elon Musk spending too much time shoring up the growth of X and not enough on Tesla (TSLA)? Investors might be thinking that in the aftermath of its latest earnings, with TSLA shares sliding 6% in AH trading on Wednesday to fall under $200. In fact, Tesla is the only Magnificent 7 member to not make significant strides back to the all-time highs seen in November 2021, when the electric carmaker hit nearly $410/share and had a market capitalization of $1.3T (it’s now valued at $660B).

Snapshot: Check out the latest earnings, production figures, cash flow and margins here, but there are even bigger concerns about what those numbers might look like in the near future. Tesla warned that vehicle volume growth may be notably lower this year as the company is between two major growth waves – one that began with the global expansion of Model 3 and Y, and the next, which will happen in the second half of 2025 following the launch of the next-generation vehicle platform. Other worrying statements were also made by Elon Musk on the post-earnings conference call, especially after the rounds of price cuts aimed at boosting sales volumes.

Automotive gross margin ex-regulatory credits: We have lots of people who want to buy our car but simply cannot afford it. If the interest rates come down quickly, I think margins will be good. And if they don’t come down quickly, they won’t be that good.

Full Self-Driving agreements: I really think lots of car companies should be asking for FSD licenses. And we’ve had some tentative conversations, but I think they don’t believe it’s real quite yet.

Cybertruck: It’s important to emphasize that this is very much a production-constrained situation, not a demand-constrained situation. And obviously, we could dramatically raise the price, but that doesn’t feel right to us to sort of gouge people for early delivery.

Competition from China: Frankly, I think if there are no trade barriers established, they will pretty much demolish most other car companies in the world. So they’re extremely good.

Push into robotics: I think we’ve got a good chance of shipping some number of Optimus units next year, but like I said, this is a brand new product. When there’s a lot of uncertainty in your uncharted territory, it’s obviously impossible to make a precise prediction.

25% voting control: I see a path to creating an artificial intelligence and robotics juggernaut of truly immense capability and power, but if I have so little influence over the company at that stage… I could sort of be voted out by some sort of random shareholder advisory firm. I want to have enough to be influential. Like, if we could do a dual-class stock, that would be ideal.

SA commentary: “Tesla is too expensive,” writes Jonathan Weber, analyst at SA Investing Group Cash Flow Club. “Apart from that, we have a strong brand and a profitable EV business — but growth is weak (or non-existent in real terms), profits are declining, and Tesla trades at roughly 150x free cash flow. Tesla has potential in autonomous vehicle tech, but I believe that this is a risky bet and would not buy Tesla stock based solely on this reason.” (122 comments)

Another setback

In the latest blow to Boeing (BA), the FAA will not allow the aerospace giant to expand production of its 737 MAX aircraft. The agency’s decision comes in the wake of a Jan. 5 incident in which the door plug of an Alaska Airlines (ALK) MAX 9 blew off the fuselage in midair, leading to all MAX 9s in the U.S. being grounded. “We will not agree to any request from Boeing for an expansion in production or approve additional production lines for the 737 MAX until we are satisfied that the quality control issues uncovered are resolved,” said FAA Administrator Mike Whitaker. Meanwhile, Alaska Airlines said it anticipates it will resume MAX 9 flights on Jan. 26, while United (UAL) said its MAX 9s will take to the skies again on Jan. 28. (25 comments)

Up, up and away

Propelled by optimism over its artificial intelligence progress, Microsoft’s (MSFT) market cap struck the $3T mark on Wednesday, six days before its next quarterly earnings report. Microsoft is now the second tech giant in the last year to surpass the $3T milestone, with Apple (AAPL) doing so last June to become the world’s most valuable company. Many analysts are impressed by Microsoft, noting the upside to growth offered by its AI products, and expect “a solid beat and raise” when the tech firm reports results on Jan. 30. Investing Group Leader Daniel Jones also feels Microsoft is “one of the true growth prospects that can achieve enough growth on the bottom line to justify the lofty price that the market is demanding.” (13 comments)

Defying recession

While U.S. economic growth is expected to have moderated towards the end of last year, strong consumer spending and hiring are likely to keep quelling any fears of a recession. Economists forecast that GDP grew 2.0% in Q4 sequentially, moderating from Q3’s 4.9% pace. The latest report from the Department of Commerce will come today at 8:30 AM ET, but if GDP growth comes in stronger than expected, analysts believe it could further cool hopes for a March rate cut. Note that consumers remain resilient, with better-than-expected retail sales in December and consumer sentiment now at its highest level since mid-2021. (2 comments)

Today’s Economic Calendar
8:30 Durable Goods
8:30 GDP
8:30 International Trade in Goods (Advance)
8:30 Initial Jobless Claims
8:30 Chicago Fed National Activity Index
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
10:00 New Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $41B, 7-Year Note Auction
4:30 PM Fed Balance Sheet

What else is happening…

IBM (IBM) gains on earnings beat, strong cash flow outlook.

Biden delays decision on largest U.S. LNG export terminal.

AT&T (T) slides on weak profit forecast, increased spending.

HPE (HPE) reports cyber attack carried out by Midnight Blizzard.

Spirit tumbles; Citi says JetBlue (JBLU) deal seems unlikely.

Intel (INTC) opens chip manufacturing factory in New Mexico.

Paramount gains as David Ellison makes bid for parent firm.

Citi places PayPal (PYPL) on 30-day negative catalyst watch.

Kimberly-Clark (KMB) profit hit by hyperinflationary markets.

CSX (CSX) profit declines on lower coal prices, fuel surcharges.


Good morning. Happy Wednesday.

The Asian/Pacific markets mostly did well. China, Hong Kong, India, Malaysia, Singapore, Thailand and the Philippine led, while Japan and Indonesia were weak. Europe, Africa and the Middle East are currently doing great. Poland, France, Turkey, Germany, the UAE, Saudi Arabia, Finland, Hungary Spain, the Netherlands, Italy, Austria and South Africa are leading. Futures in the States point to a moderate gap up open for the cash market.

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

Stories/News from Seeking Alpha…

Streaming success

Tech is flexing its muscles again as Netflix (NFLX) reported a solid batch of earnings and Q4 results. Shares soared 8.7% AH on Tuesday to $534.80, building on a 1.3% gain seen during the regular session after the company revealed it would ramp up its investments in live programming. A $5B-plus deal with combat sports leader TKO Group (TKO) will grant exclusive rights to Raw – the No. 1 show on USA Network (CMCSA) – as well as other programming from World Wrestling Entertainment, and bring star Dwayne “The Rock” Johnson to the TKO board.

By the numbers: Netflix’s global streaming paid memberships hit 13.1M in Q4, marking the strongest-ever final quarter for net additions, while the company ended the year with 260.3M subscribers, marking a record for the streamer. Revenue, meanwhile, returned to double-digit growth, rising 12.5% to $8.83B, beating consensus for $8.71B. Elsewhere, operating income dipped to $1.5B, but despite a Q4 operating margin of 16.9%, the fiscal 2023 operating margin hit 21% – up from 18% in 2022 and ahead of the company’s 20% margin target. Free cash flow also remained strong, at $1.6B, and net cash from operations was $1.7B; both figures were down sequentially but up heavily from year-ago totals of $332M and $444M respectively.

“Despite a moderated pace of growth from its heydays, Netflix has proven a competitive advantage in expanding margins and bolstering cash flows needed to maintain its moat amid increasing competition,” wrote SA Investing Group Leader Livy Investment Research. “Looking ahead, Netflix is expected to stay resilient in 2024, with tailwinds including ARM expansion, cyclical ad spend from the Summer Olympics and U.S. elections, and the advent of AI.”

What to watch: Netflix (NFLX) is shining bright in an increasingly crowded streaming space, with rivals struggling to reach profitability and cutting down on their content spend. In contrast, the company behind the streaming revolution is looking forward to a strong content slate made possible by its successful ad-supported service plan and paid sharing (a.k.a. the password-sharing crackdown). “We believe there is plenty of room for growth ahead as streaming expands, and our north star remains the same: to thrill members with our entertainment,” Netflix wrote in a shareholder letter, adding to expect consolidation among its competitors, especially players with large and declining linear networks. (28 comments)


Various media reports suggest that Apple (AAPL) has pulled back on its car project once again, with a new release date in 2028. The project is also said to be in a make-or-break position, while the level of autonomy has downshifted dramatically to Level 2+ from Level 4. Apple’s Project Titan has been around since 2014, spurring debate on whether the company could match the margins it generates on its tech products with a vehicle. While Alphabet’s (GOOG) Waymo, Huawei, Baidu (BIDU), and Xiaomi (OTCPK:XIACY) have all introduced electric vehicles, Apple’s biggest splash in the automobile sector to date was its CarPlay software, as it has not yet shown off a prototype. (49 comments)

NATO expansion

Turkey’s parliament has finally approved Sweden’s entry into the North Atlantic Treaty Organization after months of deliberations, leaving Hungary as the only holdout to the alliance’s expansion in response to Russia’s invasion of Ukraine. Turkish President Recep Tayyip Erdogan’s final signoff is expected in the coming days. Lawmakers attributed the ratification to Sweden’s tougher stance on Kurdish militants, while Erdogan previously signaled that the country’s desire to buy Lockheed Martin (LMT) F-16 fighter jets was also a factor. Once Sweden joins the alliance, Russia will become the only non-NATO country bordering the Baltic Sea and its warships may be forced to pass near NATO-controlled shores en route to the Atlantic.

Focus on AI

SAP (SAP) rose 6% to near record highs in premarket trading after announcing a company-wide restructuring program that will emphasize artificial intelligence growth. The German software giant plans to spend around €2B on the shakeup that’ll cover 8,000 positions, but expects to end this year with a headcount similar to current levels. The move is part of SAP’s aim to “fully capitalize on the opportunity” of the next wave of technology, CFO Dominik Asam declared, adding that it means “we need to reskill our workforce, really focus on that.” SAP also reported solid Q4 results overnight, as well as a strong outlook for the year.

Today’s Economic Calendar
7:00 MBA Mortgage Applications
9:45 PMI Composite Final
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
11:30 Results of $28B, 2-Year FRN Auction
1:00 PM Results of $61B, 5-Year Note Auction

What else is happening…

DWAC watch: Haley vows to fight on after Trump scores NH victory.

Alibaba (BABA) surges after Jack Ma, Tsai buy $200M in stock.

Berkshire utility to pay Oregon homeowners for 2020 wildfires.

Procter & Gamble (PG) nears all-time high on higher pricing strength.

More earnings: General Electric (GE) heads south on weak outlook.

Artificial intelligence is set to change news forever. But how?

J&J may pay $700M to settle probe into talcum powder marketing.

Verizon (VZ) hits best level in over a year as wireless growth aids telco.

3M (MMM) stock plunges on disappointing 2024 earnings guidance.

Boeing (BA) may lose United (UAL) as Max customer after grounding.


Good morning. Happy Tuesday.

The Asian/Pacific markets leaned to the upside. China, Hong Kong, South Korea, Austrailia and the Philippines led the way; India and Thailand posted losses. Europe, Africa and the Middle East currently lean down. South Africa and Finland are up; Denmark, Poland, Switzerland, Hungary, Spain and Israel are down. Futures in the States point to a positive open for the cash market.

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

Stories/News from Seeking Alpha…

Live free or die

With Florida Gov. Ron DeSantis dropping out of the presidential race, a one-on-one matchup in New Hampshire today will help determine the Republican nominee for 2024. Donald Trump is hoping for a replay of his performance in 2016, when his first win in the Granite State ultimately paved his path to the White House. Facing a double-digit lead, Nikki Haley will have to score an upset victory or a strong finish to stay relevant in the presidential race, giving her momentum before the next primary in her home state of South Carolina, where she served as governor from 2011 to 2017.

On the economy: Fiscal discipline has been a big talking point as the U.S. began the new year with the national debt surpassing $34T for the first time. The discussion to balance the budget has roped in tax policy and tax cuts, trade practices with China, how to handle tariffs, and subjects that involve the word “security.” Both GOP candidates agree on closing the southern border and defunding sanctuary cities, though there has been disagreement over how to structure social security benefits, especially with interest rates at their current high levels.

Voters in New Hampshire are also known for their independent streak. Topics like the economy are definitely on the top of the ballot, but it may be challenging to see exact policy differences without a formal Trump-Haley debate, and things could boil down to posture, rhetoric and personality. Foreign policy and funding also make up a big part of their platforms, with Trump advocating for a more isolationist view in place of “endless spending and wars,” while Haley’s stance reiterates that the U.S. disengaging from the world would result in power vacuums quickly filled by adversaries like China and Russia.

How to trade? Digital World Acquisition Corp. (DWAC), the SPAC seeking to merge with Trump’s media company, has been trading as a barometer of sorts, bringing back memories of the meme stock heyday seen in 2021. Shares jumped 29% last Tuesday after the former president’s win in the Iowa caucuses, and have continued to advance since then, skyrocketing another 88% to $49.69 yesterday after DeSantis quit the primary race. “DWAC stock trading performance is influenced by Donald Trump’s political moves in 2024, making it a key catalyst for short to medium-term movements,” SA analyst Bernard Zambonin wrote back in early December. “I believe it’s not suitable for long-term ownership but rather for trading as a sort of ‘gambling’ component of an investor’s portfolio.” (370 comments)

Rally on

Major Wall Street indices have notched new record highs, with gains lifting the blue-chip Dow Jones Industrial Average (DJI) above 38K for the first time ever, while the S&P 500 (SP500) ended at an all-time high for the second day in a row. Investing Group Leader Victor Dergunov expects this uptrend to continue, predicting that the S&P500 could reach 5,200-5,500 and the Nasdaq around 18,000-20,000 before year-end. While the Federal Reserve takes a backseat as it enters a blackout period ahead of its first meeting of 2024, earnings will dominate headlines this week, with results from Netflix (NFLX) and Baker Hughes (BKR) due out today. (5 comments)

Fresh strikes

U.S. and U.K. military forces, with support from four other countries, have conducted a fresh round of strikes in Yemen, targeting eight Houthi sites in response to the militant group’s growing attacks on vessels traveling through the Red Sea. The disruptions to global shipping are already more damaging to the supply chain than the early COVID-19 pandemic, according to maritime advisory firm Sea-Intelligence, which could affect energy markets and product tanker rates. The longer transit around the Cape of Good Hope is also having a significant impact on vessels available to pick up containers, but unlike during the pandemic, there is excess vessel capacity now unused that could be put back into service. (62 comments)

Behind the hack

Remember the hack on the SEC’s X account in early January? The one that said the agency had approved spot bitcoin ETFs before they did, triggering a brief spike in bitcoin’s (BTC-USD) price? Well, it turns out that a hacker obtained control of a staffer’s phone number in a SIM swap attack, allowing the fake post to be published on the platform formerly called Twitter. The SEC also noted that multi-factor authentication of its X account was disabled last July, but was re-enabled after it was compromised. The regulator subsequently greenlit 11 spot bitcoin ETFs on the day following the hack, allowing them to start trading on U.S. exchanges. (6 comments)

Today’s Economic Calendar
10:00 Richmond Fed Mfg. Index
1:00 PM Results of $60B, 2-Year Note Auction
1:00 PM Money Supply

What else is happening…

WSB survey results: 2024 not seen as a great year to buy a home.

United rallies on strong outlook; CEO irked by Boeing (BA) lapses.

Exxon sues ESG investors to keep climate bids off shareholder ballot.

Oatly (OTLY) gets boost from non-dairy partnership with Carvel.

Netflix’s (NFLX) film chief steps down, seeks to build own company.

Choice (CHH) nominates new board amid hostile bid for Wyndham.

ADM (ADM) hits three-year low on probe news, analyst downgrades.

Vroom (VRM) to wind-down ecommerce used vehicle operations.

B. Riley (RILY) falls as Franchise Group CEO Kahn steps down.

Canadian Natural Resources’ (CNQ) Alberta output hits record.

This stock just replaced Nvidia (NVDA) as Morgan Stanley’s Top Pick.


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

The Asian/Pacific markets were split. Japan, Taiwan, Australia and the Philippines did well; China, Hong Kong and Thailand were weak. Europe, Africa and the Middle East are currently mostly up. France, Turkey, Germany, Russia, Greece, Sweden, Hungary, Spain, the Netherlands, Austria, Sweden and Saudi Arabia are up; South Africa and Italy are down. Futures in the States point to a moderate gap up open for the cash market.

————— Online Course: Jason Leavitt’s Masterclass in Trading —————

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

Stories/News from Seeking Alpha…

Full throttle

Buckle up for the next chapter of earnings season. Tech will take some of the spotlight this week as investors get quarterly results from Magnificent 7 member Tesla (TSLA) and Netflix (NFLX), as well as a snapshot into the semiconductor industry with figures from ASML (ASML) and Intel (INTC). More sectors will also be on display with industry heavyweights disclosing their performance: Defense – Lockheed Martin (LMT) and RTX (RTX); Telecom – AT&T (T) and Verizon (VZ); Financials – Visa (V) and American Express (AXP); Consumer Goods – P&G (PG); Healthcare – Johnson & Johnson (JNJ); Travel – American Airlines (AAL) and United (UAL); Real Estate – D.R. Horton (DHI); Industrial – 3M (MMM), Caterpillar (CAT) and General Electric (GE). See Seeking Alpha’s earnings calendar.

Snapshot: Earnings for S&P 500 companies are expected to rise 4.4% Y/Y in the fourth quarter, according to data from LSEG, which should provide additional optimism for the market. The S&P 500 (SPX) even hit a new all-time record high on Friday, with things looking good for the economy. Solid profits and margins are being driven by strong spending, AI is boosting valuations, unemployment is low, rates are starting to come down, and many geopolitical tensions on the world stage have so far not directly impacted the American consumer.

“At the end of the day, it appears that if corporate earnings keep up with expectations in 2024, the market could continue to rally, or at worst, trade sideways,” wrote SA analyst Andrew Prochnow, cautioning that risks could materialize if “earnings guidance starts to waver.” Remember, it’s hard to trade earnings, and sentiment can disappoint. Beats and misses may not be as indicative as guidance, while knee-jerk reactions can quickly reverse. It’s better to dive deeper into the financials or the extended commentary on conference calls to get a broader take on any given company.

Macro front: Investors have been hanging on to every word from central bank policymakers as the traditional blackout period goes into effect before the Fed’s upcoming policy meeting on Jan. 30-31. There will also be two noteworthy pieces of economic data this week that could help set the tone for the future path of interest rates. GDP growth for Q4 will be published on Thursday and is expected to expand by 2.0% (vs. 4.9% in Q3), while the Fed’s favorite inflation gauge, the core PCE price index, will be released on Friday.

Going hostile?

It’s no secret that legacy department stores are struggling, but Macy’s (M) just rejected a $21/share takeover offer from Arkhouse Management and Brigade Capital, citing valuation concerns and the ability of the buyers to finance the deal. Not taking “no” for an answer, the private equity firms threatened to go directly to shareholders with their $5.8B buyout offer. “We see the potential for a meaningful increase to our original proposal if we are granted access to the necessary due diligence and have offered to sign a mutual non-disclosure agreement,” said Arkhouse. Last week, Macy’s announced it would cut around 13% of its staff and close five underperforming stores. (26 comments)

New world order

Russia and North Korea will work towards establishing a “new multi-polarized international order” to defend their interests, amid efforts to build a united front against the United States. The deepening of ties follows North Korea Foreign Minister Choe Son Hui’s meetings with her Russian counterpart Sergey Lavrov and Vladimir Putin in Moscow, and follows similar efforts by China and Russia. Tensions have been escalating in the Korean Peninsula, with Kim Jong Un ramping up weapons tests, and the U.S., South Korea and Japan responding by strengthening their combined military exercises. The moves also come a week after U.K. Defense Secretary Grant Shapps declared the end of the era of the peace dividend. (4 comments)

Crypto casualty

The cryptoverse is witnessing yet another failure, with Terraform Labs – the company behind the collapsed cryptocurrencies TerraUSD (UST-USD) and Luna (LUNA-USD) – filing for Chapter 11 bankruptcy in the U.S. TerraUSD, along with its sister token Luna, failed in 2022 after the stablecoin lost its peg to the dollar, wiping out an estimated $40B in market value. Terraform Labs, which is already facing fraud charges brought on by the U.S. SEC, is also expected to face a class-action lawsuit in Singapore. While the company has repeatedly asserted that TerraUSD and other tokens it issues are not securities, the SEC, as well as a judge in a recent ruling disagree. (3 comments)

Today’s Economic Calendar
10:00 Leading Indicators

What else is happening…

DeSantis drops out of 2024 presidential race, endorses Trump.

Red Sea crisis more damaging for shipping than early pandemic.

New ADHD drugs could pay off for pharmaceutical companies.

Warren Buffett wants Citigroup (C) CEO to keep overhauling bank.

SolarEdge (SEDG) to cut 16% of workforce as revenues slide.

SEC probing B. Riley deals with client linked to defunct hedge fund.

Sony (SONY) shelves $10B deal with Zee, legal action to follow.

Cruise sector navigates out of rough seas more popular than ever.

Beverage buzz: McDonald’s CosMc’s concept starts off strong.

U.S. election is another major wildcard for the automobile sector.


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