Good morning. Happy Friday.
The Asian/Pacific markets were mixed. China, Hong Kong and Taiwan did well; Japan, India and Malaysia were weak. Europe, Africa and the Middle East lean to the upside. Norway, Hungary, Austria and Sweden are up; Turkey and Greece are down. Index futures in the States point to a gap up open for the cash market.
————— Free Online Course: Mini Masterclass in Trading —————
The dollar is down slightly. Oil is up; copper is down. Gold and silver are down. Bonds are down small amounts.
Stories/News from Seeking Alpha…
Growing alliance
The West has attempted to isolate Moscow from the global economy over the Ukraine war. But this week’s BRICS summit in Russia may have proved the nation’s significant diplomatic role as emerging economies look to challenge Western dominance.
Leaders convene: The BRICS concluded its 16th annual summit in Kazan, Russia on Thursday, which was the first since the bloc’s expansion and saw participation from more than 20 countries – including those hoping to join the alliance. The Kazan declaration issued at the summit included support for interbank cooperation, cross-border payments, a grain trading platform, and the New Development Bank within the bloc. Creating an international precious metals exchange was also discussed, and a symbolic BRICS banknote was unveiled.
Geopolitics in focus: Leaders called for de-escalation of regional wars, although no specific action was discussed. UN Secretary General Antonio Guterres, whose attendance at the summit was criticized by Kyiv, called for peace in Gaza, Lebanon, Sudan and Ukraine. Notably, when asked about Donald Trump’s promise to end the Ukraine war if elected as president, Vladimir Putin said the statement seemed sincere. “We certainly welcome statements of this kind, no matter who makes them,” he added.
Bigger picture: As for challenging U.S. dollar dominance, Putin said the goal was not to reject the currency, but instead find alternatives if access is restricted. ING believes BRICS has the most potential to forward its de-dollarization agenda in FX reserves. But how successful would BRICS be in providing alternatives to Western dominated institutions? “In some ways, it is repeating the experience of the EU,” Seeking Alpha analyst Marc Chandler recently noted. “The more countries join, the wider range of interests, the more difficult to arrive at timely decisions.”
What else is happening…
Not in the bag: $8.5B Capri (CPRI)-Tapestry (TPR) merger blocked.
Steel union boss trying to persuade workers to oppose Nippon deal.
Spirit Airlines (SAVE) to sell Airbus planes, cut jobs to boost liquidity.
Gold miners drop as Newmont’s (NEM) weak results fuel cost concerns.
Palladium prices surge as U.S. weighs sanctions on Russian exports.
BlackRock (BLK) warns of risks from FDIC proposal on bank stakes.
Tesla adds more to market cap than combined valuations of GM, FORD.
E. coli outbreak: Suppliers, fast-food chains pull onions; lawsuit filed.
DigitalBridge (DBRG) weighs sale of Brazilian data center firm Scala.
BofA lists companies that stand to benefit from nuclear energy trend.
Today’s Economic Calendar
08:30 AM Durable Goods
10:00 AM Consumer Sentiment
11:00 AM Fed’s Collins Speech
01:00 PM Baker Hughes Rig Count
—————
Good morning. Happy Thursday.
The Asian/Pacific markets were mostly weak. China, Hong Kong, South Korea, Taiwan, Malaysia, Indonesia, Thailand and the Philippines posted the biggest losses. Europe, Africa and the Middle East are currently doing well. The UK, France, Turkey, Germany, South Africa, Norway, the Netherlands and Italy are leading. Index futures in the States point to a moderate gap up open for the cash market.
————— Free Online Course: Mini Masterclass in Trading —————
The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Margins impress
Tesla (TSLA) shares are rallying this morning, up over 11% before the bell, after the electric vehicle maker impressed investors with its strong Q3 earnings and upbeat production outlook. The results helped Tesla break a streak of missing EPS estimates in the last four quarters, with margins improving a lot more than expected.
Dig deeper: On the earnings call, CEO Elon Musk took a victory lap over what he said was a record quarter. Record low costs of making a car helped boost margins, while the Cybertruck achieved a positive gross margin for the first time. Tesla’s earnings were also buoyed by increased sales of regulatory credits and its energy storage business – which Musk said is “growing like wildfire.”
Bright outlook: Musk affirmed that Tesla will produce more affordable models in the first half of 2025, and expects overall production to increase by 20%-30% next year. Cybercab production is anticipated to be scaled up aggressively in 2026, while FSD is projected to exceed human-level driving safety by Q2 of 2025 as miles-per-intervention metrics continue to improve. Ride-hailing is expected to be live in Texas and California next year.
SA commentary: On the bullish side, SA analyst Hunter Wolf Research expects Tesla to sustain 25% revenue growth due to progress in Cybertruck production, AI-based FSD software, and energy transformation. But SA analyst Bill Maurer is a bit more cautious, noting that while the results were mostly good, Tesla’s valuation is still too high. Investing Group Leader Jonathan Weber remains bearish due to Tesla’s elevated valuation, minimal free cash flow yield, and significant EV and robotaxi competition. (118 comments)
What else is happening…
Boeing (BA) warns of cash burn; striking workers reject contract.
Huang: Blackwell flaw ‘100% Nvidia’s (NVDA) fault,’ issue fixed.
Apple iOS 18.1 rolls out next week, iOS 18.2 Beta now available.
Amazon (AMZN) Prime members can now pay less for gas.
E. coli outbreak: McDonald’s (MCD) supplier recalls yellow onions.
WW, Hims & Hers (HIMS) fall as Novo seeks to bar semaglutide copies.
More states mulling Medicaid coverage of GLP-1 weight-loss drugs.
Frontier shareholder hires adviser to evaluate sale to Verizon (VZ).
DOJ warns Elon Musk PAC on $1M giveaway to registered voters.
The U.S. debt: How annual deficits pile up to a $35T-plus total.
Today’s Economic Calendar
08:30 AM Initial Jobless Claims
08:30 AM Chicago Fed National Activity Index
08:45 AM Fed’s Hammack Speech
09:45 AM PMI Composite Flash
10:00 AM New Home Sales
10:30 AM EIA Natural Gas Inventory
11:00 AM Kansas City Fed Mfg Survey
01:00 PM Results of $24B, 5-Year TIPS Auction
04:30 PM Fed Balance Sheet
—————
Good morning. Happy Wednesday.
The Asian/Pacific markets were mixed. China, Hong Kong and South Korea did well; Japan, Taiwan and the Philippines were weak. Europe, Africa and the Middle East currently lean down. The UK, Poland, France, the Netherlands and Portugal are down the most. Index futures in the States point to a moderate down open for the cash market.
————— BLOG: Nuclear Energy is Leading the Market —————
The dollar is up. Oil and copper are down. Gold is flat; silver is down. Bonds are down.
Stories/News from Seeking Alpha…
Hold the onions
McDonald’s (MCD) shares are losing ground, sliding 6% before the bell on Wednesday, after the Centers for Disease Control issued a warning about an E. coli outbreak in Colorado and Nebraska linked to the hamburger chain’s Quarter Pounder. Ten people have been hospitalized and one person has died, who was described by Colorado health officials as being “older” and with underlying conditions.
What happened: While the specific ingredient linked to the outbreak has not been officially identified, McDonald’s said initial findings indicate a subset of illnesses may be linked to slivered onions used in the Quarter Pounder and sourced by a single supplier that serves three distribution centers. In line with McDonald’s safety protocols, all local restaurants were instructed to remove the product from their supply, and distribution of all slivered onions in the impacted area has been paused. The company also temporarily removed the Quarter Pounder from restaurants in impacted states.
Bigger picture: TD Cowen analyst Andrew Charles said quick franchisee checks suggested the issue seems largely contained, although a short-term impact on sales can be expected. Based on food contamination incidents at Chipotle (CMG) in 2015 and Jack in the Box (JACK) in 1993, Charles estimates that every 1% annualized change in U.S. same-store sales will lead to a $0.09 EPS impact, with the worst-case scenario being a $0.37 hit to Q4 EPS.
Price hikes: Separately, Democratic lawmakers, including Elizabeth Warren (D-MA), have called on McDonald’s CEO Chris Kempczinski to explain recent hikes in menu prices, which they claim have outpaced inflation. The senators in a letter pointed to McDonald’s income growth and stock buybacks, saying corporate profits shouldn’t come at the expense of people’s ability to put food on the table. McDonald’s responded by saying the letter “contains contortions of facts and many inaccuracies.” (194 comments)
What else is happening…
Tesla (TSLA) dips ahead of earnings as investors eye margin outlook.
Starbucks (SBUX) falls after suspending guidance amid sales slump.
Legal feud: Arm (ARM) to axe Qualcomm (QCOM) chip design license.
Spirit (SAVE) jumps on report of renewed merger talks with Frontier.
Lithium stocks surge as study reveals massive reserves in Arkansas.
Trump or Harris? Paul Tudor Jones sees Treasury selloff in either case.
Report: JPMorgan’s (JPM) Dimon open to Harris administration role.
Flying air taxis are on the radar after U.S. regulator finalizes key rules.
BlackRock (BLK) launches ETFs focused on AI, growth opportunities.
Polls show support for legalizing recreational marijuana in red states.
Today’s Economic Calendar
07:00 AM MBA Mortgage Applications
09:00 AM Fed’s Bowman Speech
10:00 AM Existing Home Sales
10:00 AM Atlanta Fed’s Business Inflation Expectations
10:30 AM EIA Petroleum Inventories
11:00 AM Treasury Buyback Announcement
12:00 PM Fed’s Barkin Speech
01:00 PM Results of $13B, 20-Year Bond Auction
02:00 PM Fed’s Beige Book
02:00 PM Treasury Buyback Results
—————
Good morning. Happy Tuesday.
The Asian/Pacific markets posted relatively big losses. China did well, but Japan, South Korea, India, Australia, New Zealand, Singapore and Thailand were weak. Europe, Africa and the Middle East are currently mostly down big. The UK, Denmark, Poland, Greece, South Africa, Finland, Switzerland, Spain, Italy, Portugal, Israel, Austria and Sweden are down. Index futures in the States point to a moderate down open for the cash market.
————— Free Online Course: Mini Masterclass in Trading —————
The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Up and up
Spot gold (XAUUSD:CUR) is getting shinier by the day. The price of the precious metal touched another record, maintaining its streak of successive all-time highs. Since the start of 2024, gold’s value has risen by a third, hovering over the $2,700 per ounce mark in October. The simmering tensions in the Middle East and the uncertainty over the upcoming presidential elections in the U.S. have increased the demand for the safe haven asset.
Golden opportunity: 2024 gains have come to fruition after years of lackluster performance over the past decade. The price of the bullion touched about $1,900 in 2011 and had been trading at around the same price for much of 2023. After being subdued for so long, gold prices shot up, delivering a 70% jump in the past two years. What’s more is that big banks see this rally continuing into 2025. Analysts at Citi raised their three-month forecast for gold prices to $2,800/oz and set a $3,000 forecast for the next 6–12 months. J.P. Morgan, too, has noted that gold’s fundamental price drivers still appear to have upside.
Uncertainty fueling the rally? While the current geopolitical situation and U.S. elections are influencing gold prices, Citi’s latest estimates note a possible further U.S. labor market deterioration and interest rate cuts by the Federal Reserve raising bullion prices. On the demand side, central banks in emerging Asian economies have stepped up their purchases in recent years. Investors are also investing in gold, eyeing the growing government debt level in Western countries, as well as sanctions making nations wary of the U.S. dollar.
Boost to miners: Investor fervor into gold has also spilled into equities, with precious metal stocks hitting 52-week highs. This included Agnico Eagle Mines (AEM), Alamos Gold (AGI), ASA Gold (ASA), Barrick Gold (GOLD), DRDGold (DRD), Eldorado Gold (EGO), Endeavour Silver (EXK), among others. “Mining stocks typically outperform gold during bull markets, providing additional leverage and profit potential for investors in precious metals,” said SA analyst Jon Wolfenbarger. “Rising costs for mining companies have been a key driver of why mining stocks have underperformed,” commented SA analyst Jason Hamlin.
What else is happening…
Short interest shifts point to a post-earnings rally for General Motors (GM).
Cheesecake Factory (CAKE) gains after report activist pushing for breakup.
Biden, Harris propose free OTC contraception under Affordable Care Act.
Kansas City Fed’s Schmid says he opposes aggressive rate cuts.
Disney (DIS) names Morgan Stanley’s James Gorman as next chairman.
Top small-cap stock picks following the group’s upgrade to neutral.
BHP, Vale (VALE) near $30B settlement in Brazil tailings dam disaster.
Nike (NKE) signs long-term extension with the NBA and WNBA.
US Steel (X) gains as local union voices support for Nippon Steel deal.
FOMO is making investors not take market risk into account.
Today’s Economic Calendar
10:00 AM Fed’s Harker Speech
10:00 AM Richmond Fed Mfg. Index
11:00 AM Treasury Buyback Announcement (Preliminary)
01:00 PM Money Supply
—————
Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets leaned to the upside. China, South Korea, Australia and New Zealand did the best; Hong Kong, India and Singapore were weak. Europe, Africa and the Middle East are currently mostly down. Norway and Saudi Arabia are up; Poland, France, Germany, Greece, Switzerland, Spain, Italy, Portugal, Austria and Sweden are down. Index futures in the States point to a moderate down open for the cash market.
————— Free Online Course: Mini Masterclass in Trading —————
The dollar is up. Oil and copper are up. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Dodging turbulence
“If it ain’t Boeing, I ain’t going.” This phrase came up in the ’70s or ’80s, popularizing the engineering prowess of plane maker Boeing (BA), which played a pivotal role in bringing the world into the jet age of commercial aviation. However, come 2024, no one has the same opinion about the Arlington, Virginia-based company. Certainly not the investors; since the start of the year, Boeing’s shares have dropped about 40.5% as the company faces quality issues, FAA scrutiny, curbed production, cash woes, and more recently, worker strikes.
New hope: Over the weekend, Boeing (BA) and a union representing about 30,000 striking West Coast workers announced a tentative agreement that includes a 35% pay hike over four years, among others, that could end more than a month-long strike that has disrupted production at the aircraft maker. Additionally, in a bid to raise cash, Boeing on Sunday said it has sold off its surveillance equipment subsidiary. The company has also filed with the SEC to raise $25B over the next three years and has signed a new $10B credit line.
Q3 expectations: Earlier this month, Boeing said it would recognize a $5B charge on earnings and reported preliminary Q3 revenues of $17.8B that missed the Wall Street consensus of $18.5B. CEO Kelly Ortberg said the company will delay the launch of its 777X, whose test fleet is already grounded, to 2026 instead of 2025. The company also decided to discontinue its 767 cargo plane. On top of this, Boeing also slashed its global workforce by about 17,000 jobs. The 108-year-old plane-maker will release its third quarter report on Wednesday. On the same day, the members of the striking union are expected to vote on Boeing’s latest proposal.
SA commentary: “Despite the long-term potential, Boeing’s near-term struggles with production stability and cash flow due to prolonged strikes lead to a hold rating,” said Investing Group Leader Dhierin Bechai in Boeing In Crisis Mode: Year-Over-Year Decline In Orders, Deliveries. “Boeing is trading at a significant discount, presenting a unique investment opportunity with potential for substantial upside as operational issues are resolved,” countered Curonian Research in Boeing: The Brand Strength Is Unrivalled.
What else is happening…
Which Magnificent 7 stocks could react negatively to earnings?
A 100% recession call that never came to be.
Texas Instruments (TXN) is set to kick off chip earnings season.
Southwest Airlines (LUV), Elliott in talks to avoid proxy fight.
AI search startup Perplexity aims for $8B valuation in new round.
Sudan prepares to resume oil exports after key pipeline repairs.
Goldman predicts paltry 3% annual return for S&P over next decade.
Three events that shook health insurers last week.
TGI Friday’s in talks for financing as it prepares for bankruptcy.
UBS sees these 29 companies as industry leaders for 2030.
Today’s Economic Calendar
6:40 AM Fed’s Daly Speech
8:55 AM Fed’s Logan Speech
10:00 AM Leading Indicators
1:00 PM Fed’s Kashkari Speech
5:05 PM Fed’s Schmid: U.S. Economic and Monetary Policy
—————