Good morning. Happy Friday.
The Asian/Pacific markets leaned down. Taiwan, Australia, New Zealand and Singapore did well; China, Hong Kong, India, Thailand and the Philippines were weak. Europe, Africa and the Middle East currently lean down. Denmark, Turkey, Switzerland and Portugal are down; the UK, Poland, France, Germany, South Africa, Finland, Hungary and Sweden are down. Index futures in the States point to a slight down open for the cash market.
————— Podcast with StockMarket TV: Learning to Grind —————
The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
New design
Corporate America, or rather those that primarily source their supply chain outside of America, are preparing for some significant changes coming down the pipeline. President-elect Donald Trump is expected to go through with his campaign promise to hike tariffs as high as 60% to 100% on goods from China, and 10% to 20% on all other imports. Some companies have already made contingency plans, but others are now scrambling to adjust their business models to that new reality.
Snapshot: On an earnings call on Thursday, Steve Madden (SHOO) announced it was “planning for a potential scenario in which we would have to move goods out of China more quickly.” The footwear maker has been developing factories in other countries like Cambodia, Vietnam, Mexico and Brazil, but imports to the U.S. still account for about two-thirds of its business. Should it diversify, or move production closer to home, it can help secure the firm’s supply chain and leave it less exposed to risks and uncertainty under the coming administration.
“Our goal over the next year is to reduce that percentage of goods that we sourced from China by approximately 40% to 45%,” Steve Madden CEO Edward Rosenfeld declared. “If we’re able to achieve that – and we think we have the plan to do it – a year from today, we would be looking at just over a quarter of our business that would be subject to potential tariffs on Chinese goods.” Investors seemed to like the restructured model and raised guidance, sending Steve Madden (SHOO) shares up 3.1% to $45.60.
What it means: Economists and analysts have intensely debated what a new tariff regime will mean for the broader economy, with topics surrounding the supply chain, inflation, consumer costs and domestic manufacturing. The one thing that seems pretty clear, though, is that it is set to happen and companies must prepare for it. “To me, the most beautiful word in the dictionary is ‘tariff,'” Trump recently said at the Economic Club of Chicago. “It is for the protection of the companies that we have here. The higher the tariff, the more likely it is for a company to come into the United States and build a factory in the United States.”
What else is happening…
SA analysts and experts weigh in on Fed’s latest rate cut.
Powell won’t resign if President-elect Trump asked him to.
Best tech stock? AppLovin (APP) surges after stellar earnings.
China unveils $1.4T stimulus package to ease heavy debt burden.
Coming soon: Baidu AI smart glasses to rival Meta (META) Ray-Bans.
Rivian (RIVN) edges up after reaffirming deliveries guidance.
Boeing (BA) to repay furloughed workers, layoffs on track.
FDA proposes removing popular decongestant from OTC meds.
Pfizer, GSK, Moderna struggle in a shrinking RSV vaccine market.
Fitch warns Trump tax cuts may worsen budget deficit strain.
Today’s Economic Calendar
10:00 AM Consumer Sentiment
11:00 AM Fed’s Bowman Speech
01:00 PM Baker Hughes Rig Count
02:30 PM Fed’s Musalem Speech
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Good morning. Happy Thursday.
The Asian/Pacific markets were mixed. Japan, China, Hong Kong, Taiwan and Singapore did well; India, Malaysia, Indonesia and the Philippines were weak. Europe, Africa and the Middle East are currently doing great. Denmark, Poland, France, Germany, the UAE, Finland, Switzerland, Norway, Hungary, Spain, the Netherlands, Portugal, Austria, Sweden and the Czech Republic are all participating. Index futures in the States point to a moderate gap up open for the cash market.
————— Podcast with StockMarket TV: Learning to Grind —————
The dollar is down. Oil is down; copper is up. Gold and silver are up. Bonds are mixed.
Stories/News from Seeking Alpha…
Decision day
The Federal Reserve is widely expected to continue its easing cycle today, following up on September’s 50-basis-point rate cut with a further reduction of 25 bps. The spectacularly weak October jobs report isn’t expected to persuade policymakers to make a bigger cut, as they’re likely to look through the particularly noisy October data marred by the Boeing (BA) strike and two destructive hurricanes. Also don’t anticipate any color on how a second Trump administration may affect the central bank, with Chair Jay Powell likely to say the Fed doesn’t take politics into account when deciding policy.
SA commentary: Michael Kramer of Mott Capital Management, Investing Group Leader for Reading The Markets, thinks a 25-bps cut this afternoon will be the central bank’s second blunder as the Labor Department keeps revising jobs numbers (the first was its 50-bps cut in September.) “The inconsistent job data alone should give the Fed reason to pause and not cut rates in November, or at least until the Fed gets a better handle on the trend of the jobs data.” Read more in The Fed Is About To Make A Massive Mistake
Interestingly, the yield on the benchmark 10-year Treasury (US10Y) has been rising since mid-September, tacking on three-quarters of a percentage point to hit 4.47% on Wednesday. It’s primarily because the Fed only controls short-term rates, with longer-term borrowing costs more associated with the longer-term monetary and fiscal landscape, as well as economic conditions like growth and inflation. Fears of rising debt levels are at the forefront of investors’ minds, as it will be challenging for any incoming president to deal with budget sustainability amid bloated discretionary spending and the growing burden from entitlement programs.
Risk premiums: “We aren’t [yet] calling for the 10-year Treasury yield to reach 5%, but the ‘Bond Vigilantes’ seem to be threatening to take it there,” said veteran market strategist Ed Yardeni, who coined the term back in the 1980s. “Investors often hear ‘Don’t fight the Fed,’ but perhaps it’s the Fed that shouldn’t be fighting the ‘Bond Vigilantes.’ The bond market could easily nullify the impacts of another rate cut. That’s because the bond market believes the Fed is cutting rates by too much, too soon, and is therefore raising long-term inflation expectations. These expectations are heightened by concerns about more fiscal excesses from the next administration.” (5 comments)
What else is happening…
Dow, S&P and Nasdaq at new highs after Trump wins the White House.
Incumbent party loses three straight for the first time since the 1800s.
Election buzz: Tesla (TSLA) soars as robotaxi bet expected to pay off.
Moving fast: These chipmakers are set to receive final CHIPS Act awards.
Qualcomm (QCOM) posted Q4 results. Here’s why its stock is soaring.
Apple (AAPL) CEO Tim Cook among tech leaders congratulating Trump.
Cuba hit by another power blackout after Hurricane Rafael landfall.
Australia mulls bringing law to ban social media for children under 16.
Lyft (LYFT) revs its engine as upbeat results lead to raised guidance.
Energy Transfer (ET) CEO: Trump win a ‘breath of fresh air’ to oil industry.
Today’s Economic Calendar
08:30 AM Initial Jobless Claims
08:30 AM Productivity and Costs
10:00 AM Wholesale Inventories (Preliminary)
10:30 AM EIA Natural Gas Inventory
02:00 PM FOMC Announcement
02:30 PM Chairman Press Conference
03:00 PM Consumer Credit
04:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday.
The Asian/Pacific markets were split, with big movers in both directions. Japan, India, Taiwan, Australia, Malaysia and Singapore did great; China, Hong Kong, South Korea, Indonesia, Thailand and the Philippines were weak. Europe, Africa and the Middle East currently lean to the upside. Denmark, Poland, France, Turkey, Greece, Switzerland, Hungary, Israel and Saudi Arabia are up; South Africa, Finland, Norway, Spain and Portugal are down. Index futures in the States point to a huge gap up open for the cash market.
————— Podcast with StockMarket TV: Learning to Grind —————
The dollar is up an enormous amount. Oil and copper are down big. Gold and silver are down big. Bonds are down big. Bitcoin is up big.
Stories/News from Seeking Alpha…
Agenda 47
Following a long campaign cycle and day at the ballot box, Donald J. Trump has been elected the 47th President of the United States. Things seemed pretty clear after he won the swing state of Pennsylvania, but a key victory in Wisconsin officially pushed him over the 270 electoral vote threshold. Republicans have also taken control of the Senate and could even secure a majority in the House as well.
The philosophy: “We made history for a reason tonight,” he told supporters during a victory speech at the West Palm Beach Convention Center. “This will truly be the golden age of America. This is a magnificent victory for the American people that will allow us to ‘Make America Great Again’ for all Americans. Success will bring us together. We are going to start by all putting ‘America First.’ We have to fix it. I will not let you down. America’s future will be bigger, better, bolder, richer, safer and stronger than it has ever been before.”
Trade comes first in Trump’s economic playbook, which will introduce a series of broader and higher tariffs to spur a wave of reshoring and economic growth. The goal here is to protect and boost domestic manufacturing and use the accompanying tax revenues (or tariff revenue) to reduce the deficit. “Efficiency” measures will also target wasteful government spending, while Trump has campaigned on a series of targeted tax breaks for corporations and individuals. Cuts to energy costs that underpin the economy will additionally be pursued via the “drill, baby, drill” and “liquid gold” mantras, as well as efforts to assure lower interest rates and that the dollar remains the world’s reserve currency.
Time horizon: As pointed out in yesterday’s Wall Street Breakfast, investing in election odds and policies can be somewhat of gamble, though there are plenty of short-term gains and losses being seen in the markets. The so-called “Trump Trade” is boosting sectors like industrial and manufacturing, banking, defense and energy, and it has also propelled related stocks like Tesla (TSLA) and Trump Media (DJT). Equity futures are soaring following the results, with contracts linked to the Dow Jones Industrial Average (DJI) up by more than 1,200 points, while Bitcoin (BTC-USD) inked a new all-time high above $75,000. (20 comments)
What else is happening…
Cannabis stocks fall as Florida rejects recreational pot legalization.
Nvidia retakes world’s most valuable company title from Apple (AAPL).
Netflix (NFLX) offices in Paris, Amsterdam raided in tax fraud probe.
AI boost: Palantir surges as Wall Street praises ‘eye-popping quarter.’
Earnings snapshot: Super Micro (SMCI) outlook misses, no 10-K date.
Trump Media (DJT) posts Q3 results in surprise Election Day filing.
Cash crunch: Boeing supplier Spirit Aero (SPR) flags going concern risk.
Saudi Aramco (ARMCO) lowers oil prices to Asia after OPEC+ delay.
Novo (NVO) reports results; aware of deaths from Ozempic copies.
Amazon’s (AMZN) new delivery drone cleared by FAA for takeoff.
Today’s Economic Calendar
FOMC meeting begins
07:00 AM MBA Mortgage Applications
09:45 AM PMI Composite Final
10:30 AM EIA Petroleum Inventories
11:00 AM Treasury Buyback Announcement
01:00 PM Results of $25B, 30-Year Bond Auction
02:00 PM Treasury Buyback Results
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Good morning. Happy Tuesday. Happy Election Day.
The Asian/Pacific markets did well. Japan, China, Hong Kong, India, Taiwan, New Zealand, Thailand and the Philippines led. Europe, Africa and the Middle East are currently mixed and minimally changed. Greece, Hungary and the Czech Republic are up; Denmark, Poland and Turkey are down. Index futures in the States point to a positive open for the cash market.
————— Podcast with StockMarket TV: Learning to Grind —————
The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
The registered portfolio
It has finally arrived. Americans are heading to the polls today to vote in the 2024 election, which will not only decide who takes the White House, but also control of Congress. Swing states will play an outsized role at the ballot box, especially places like Michigan, Wisconsin and Pennsylvania. While half of all likely voters have already cast their votes via mail or early in-person voting, many of those 81M ballots can only be tabulated by election officials on Election Day or after the polls close tonight.
Election investing: Simply turning to sectors, or individual stocks, that may benefit from one party’s platform, may be more akin to gambling and not always reflect the reality of how returns actually play out. A recent example is “oil and gas” vs. “green energy” under the Trump and Biden administrations. The S&P Global Clean Energy Index (SPGTCLEN) soared under Trump and the S&P 500 Energy Sector Index (SP500-10) languished (even before the COVID pandemic), while the exact opposite happened during Biden’s term in office despite his policies. Check out the chart below.
Besides diversification, a better approach may be to zoom out to the overall market, especially given the outsized returns of the major equity indices under both recent administrations. The S&P 500 (SP500) hit its 47th record high of the year a couple of weeks ago, keeping the current bull market going. It might also be just as important to look past the election hype and into areas that will be in high demand regardless of who is sitting in Washington, such as artificial intelligence and military hardware.
Need stock picks? If the election itch is too much, it might be wise to increase exposure to investments that are likely to perform well under any administration. Seeking Alpha’s Vice President of Quant Strategy Steven Cress outlined six stocks to consider whether Trump or Harris is victorious, including Argan (AGX), Powell Industries (POWL) and Zeta Global (ZETA). See the rest here. “These stocks have great fundamentals, and they’re positioned to do quite well probably if either candidate wins,” Cress said during Seeking Alpha’s Election 2024 Investing Forum.
What else is happening…
WSB survey results: Here is the top economic issue for U.S. voters.
Boeing (BA) rises as strike ends after workers accept latest contract.
Popular AI tools lead Palantir (PLTR) to crush estimates.
Nvidia (NVDA) moves Super Micro (SMCI) orders to other suppliers.
OpenAI in early talks with regulators to become for-profit business.
Apple (AAPL) eyes smart glasses market, begins internal study.
Hims & Hers (HIMS) up 7% on raised guidance, earnings beat.
Dollar Tree (DLTR) CEO Rick Dreiling resigns over health issues.
FERC rejects Talen (TLN)-Amazon (AMZN) nuclear power deal.
Canada sets rules for oil and gas producers to cut carbon emissions.
Today’s Economic Calendar
8:30 AM International Trade in Goods and Services
10:00 AM ISM Service Index
1:00 PM Results of $42B, 10-Year Note Auction
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets did well. China, South Korea, Taiwan and Malaysia led while India was weak. Europe, Africa and the Middle East are currently mixed and minimally changed. The UK, Poland, Hungary and Sweden are up; Denmark, Turkey and the UAE are down. Index futures in the States point to a positive open for the cash market.
————— Podcast with StockMarket TV: Learning to Grind —————
The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Raising cash
Investors this weekend shifted their focus to big moves disclosed by Berkshire Hathaway (BRK.A)(BRK.B). The conglomerate led by Warren Buffett cut its notable stake in iPhone-maker Apple (AAPL) by 25% – after slashing it by almost half in Q2 – while holdings in heavyweight lender Bank of America (BAC) were also reduced by more than 20%. It’s the latest in an unwinding being revealed by Warren Buffett and his team at Berkshire, whose cash pile inflated to a record $325B as of Sept. 30, from $277B only a quarter ago.
Bigger picture: Many are debating what the growing cash hoard means and its relation to the current market environment. Does the Oracle of Omaha see a tough economic downturn on the horizon, or is keeping to his maxim of “being fearful when others are greedy”? Maybe it’s a lack of value and attractive stock opportunities, combined with an expensive market as assessed by his indicators? While some of those factors might be contributing to his decision-making, pay close attention to what he had to say at Berkshire’s last annual meeting in May.
“I don’t mind at all, under current conditions, building the cash position,” Buffett declared at the event known as Woodstock for Capitalists. “I think when I look at the alternative of what’s available in the equity markets and I look at the composition of what’s going on in the world, we find it quite attractive.”
“One thing that may surprise you… Almost everybody I know pays a lot more attention to not paying taxes than I think they should. We don’t mind paying taxes at Berkshire, and we are paying a federal 21% rate on the gains we’re taking. That rate was 35% not that long ago, it’s been 52% in the past… and the [federal government] can change that percentage any year. I would say that with present fiscal policies, I think that something has to give, and higher taxes are quite likely… if they don’t want the fiscal deficit to be this large because that has some important consequences.”
Outlook: Berkshire Hathaway, which recently entered the $1T market cap club, also froze stock buybacks this weekend, which can further contribute to its immense cash load. Remember that the pile of greenbacks has been making easy money in the current rate environment, with profits of $3.5B tied to Berkshire’s cash and Treasury position over the past quarter. Should he need it, Buffett can easily access many of those funds to put to work in a downturn, or even on mergers and acquisitions if the value is warranted. See a list of Berkshire’s top portfolio holdings.
What else is happening…
Oil on the rise after OPEC+ delays increase of 2.2M barrels-per-day.
TGI Friday’s latest chain to file for Chapter 11 bankruptcy protection.
House Speaker: Republicans will ‘probably’ try to repeal CHIPS Act.
Legalizing psychedelics: Massachusetts voters to decide tomorrow.
Nvidia (NVDA) set to replace Intel (INTC) in the Dow Jones (DJI).
The harder they fall: SMCI stock in peril, just ask MicroStrategy (MSTR).
Barclays: Tariff policy is key unknown in potential ‘Trump 2’ presidency.
Newsom signs order seeking fix for California’s soaring electricity bills.
Nissan, Mitsubishi to form joint venture for robotaxi and EV services.
Goldman Sachs: Corporate bond issuance on track to hit $1.5T in 2025.
Today’s Economic Calendar
10:00 AM Factory Orders
1:00 PM Results of $58B, 3-Year Note Auction
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