Good morning. Happy Friday.
The Asian/Pacific were split. South Korea, India, New Zealand and Malaysia did well while Japan, China, Hong Kong, Indonesia and Thailand were weak. Europe, Africa and the Middle East are mixed and little changed. South Africa and the Czech Republic are up; Denmark and Finland are down. Index futures in the States point to a moderate up open for the cash market.
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The dollar is down. Oil is up; copper is down. Gold and silver are down. Bonds are down. Bitcoin is flat.
Stories/News from Seeking Alpha…
Cutting red tape
As Wall Street expects less regulation under president-elect Donald Trump, his transition team is reportedly exploring ways to shrink, consolidate or even eliminate top banking regulators. Elimination of any agency would require congressional approval, and it may not be easy to find support for such a drastic step in slashing government oversight.
What’s on the table: In interviews with candidates to lead bank regulatory agencies, Trump advisers asked whether the Federal Deposit Insurance Corp. could be abolished, people familiar with the matter told the Wall Street Journal. The advisers, which include officials in the newly-formed Department of Government Efficiency (DOGE), also asked the candidates if the deposit insurance could be absorbed into the Treasury Department once the FDIC is dismantled.
The interviews with the candidates – who were under consideration for the FDIC and Office of the Comptroller of the Currency – also involved discussions about potentially consolidating or restructuring the FDIC, OCC and the Federal Reserve. Another plan that was floated involves only one agency – the FDIC, OCC or parts of the Fed – regulating banks. Elon Musk, who co-leads the DOGE, last month called for the elimination of the Consumer Financial Protection Bureau, which just hit banks with a cap on overdraft fees.
Deregulation hopes: At a recent event, JPMorgan (JPM) CEO Jamie Dimon said the banking industry is hopeful for less red tape under Trump “because they’ve had successive years of regulations, a lot of which stymied credit.” SA analyst MacroGirl sees these hopes further lifting bank stocks, echoing the post-2016 election rally that was “driven by expectations of higher earnings and deregulation rather than actual change.” Investing Group Leader Jonathan Weber in a recent analysis recalled deregulation during Trump’s first term, adding that he could move in a similar direction in his second term.
What else is happening…
Wholesale inflation accelerates, jobless claims unexpectedly rise.
Warner Bros. Discovery (WBD) sets stage for potential cable spinoff.
Improving ties? These Big Tech firms donate $1M to Trump inauguration.
Intel co-CEOs: Remain invested in Foundry, not writing off separation.
Broadcom (AVGO) surges on record FY revenue, upbeat AI outlook.
Boeing (BA) to invest $1B to expand Dreamliner 787 production.
Elon Musk discloses SEC settlement demand, Neuralink investigation.
Costco (COST) posts mixed results, rejects almost all union demands.
YouTube TV (GOOG) subscription price goes up as content costs rise.
ECB lowers interest rate by 25 bps, some policymakers backed 50-bp cut.
Today’s Economic Calendar
08:30 AM Import/Export Prices
01:00 PM Baker Hughes Rig Count
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Good morning. Happy Thursday.
The Asian/Pacific markets mostly posted big gains. Japan, China, Hong Kong, South Korea and Taiwan led while New Zealand and Indonesia were weak. Europe, Africa and the Middle East lean to the upside. Turkey, Hungary, Italy, Portugal, Austria and the Czech Republic are up; Denmark, Poland, Finland and Sweden are down. Index futures in the States point to a moderate down open for the cash market.
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The dollar is unchanged. Oil is flat; copper is down slightly. Gold and silver are down. Bonds are down. Bitcoin is flat.
Stories/News from Seeking Alpha…
All-time high
Investors are bringing out the champagne glasses after the Nasdaq (COMP:IND) closed above 20,000 points for the first time ever. Helping notch the new heights were the latest CPI numbers, which cemented expectations for another quarter-point rate cut by the Federal Reserve next week. The new milestone brings the return of the tech-concentrated Nasdaq to over 30% YTD and shows the staying power of the index’s bull market rally that commenced in May 2023.
Return of Big Tech: The biggest catalysts for the move higher have been fresh record highs at companies like Alphabet (GOOGL), Amazon (AMZN) and Meta (META). A dose of generative AI headlines has given an extra boost to the Mag7 names, such as Google’s launch of Gemini 2 and a “mind-boggling” quantum computing chip, as well as Apple’s (AAPL) long-awaited integration of Siri with ChatGPT and the reported development of in-house AI server chips with Broadcom (AVGO). Tesla (TSLA) also climbed to a fresh record after GM dropped out of the robotaxi race, continuing a monster 70% advance since President-elect Donald Trump’s victory only a month ago.
“A solid rate of economic growth to finish the year is fueling the best rate of annualized earnings growth at 11.9% since the fourth quarter of 2021. That is not a reason for stocks to move higher in the first quarter. It is the reason stocks are moving higher now!” wrote SA Investing Group Leader Lawrence Fuller. “The good news on the earnings front is that estimates are coming down for the current quarter, as they typically do, but by a smaller margin than average. This means we should receive a lot of good news during the earnings season in January, but guidance will be equally important.”
Nas…what? When analysts, journalists and reporters refer to the Nasdaq, they mean the Nasdaq Composite (COMP:IND), and not the Nasdaq 100 (NDX). The difference between the two is that the Nasdaq Composite measures the change in more than 2,500 stocks listed on Nasdaq Stock Exchange (NDAQ), while the Nasdaq 100 is a market cap-weighted index made up of the 100 largest non-financial companies traded on the exchange. However, both track domestic and international firms, compared to popular indices like the Dow Jones Industrial Average (DJI), which only measures the largest American companies.
What else is happening…
Mystery drones spotted, Pentagon doesn’t know where they’re from.
European NATO members weigh raising defense spending target.
Microsoft (MSFT) faces $800M charge for investing in GM’s Cruise.
Adobe (ADBE) slides as FY guidance falls short of expectations.
U.S. ETFs notch new record as inflows cross $1T this year.
DEI setback: Nasdaq (NDAQ) board diversity rules struck down.
Exxon (XOM) unveils low-carbon plan to power data centers.
Kroger launches $7.5B buyback, Albertsons (ACI) ends merger.
Red Bull may have won the energy drink battle this year.
Swiss National Bank delivers a jumbo 50-bp interest rate cut.
Today’s Economic Calendar
08:30 AM Initial Jobless Claims
08:30 AM Producer Price Index
10:00 AM Quarterly Services Report
10:30 AM EIA Natural Gas Inventory
01:00 PM Results of $22B, 30-Year Bond Auction
04:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday.
The Asian/Pacific markets leaned to the downside. South Korea did well, but Hong Kong, Taiwan, Australia, Singapore and the Philippines were weak. Europe, Africa and the Middle East lean down but are little changed. Italy is up; Poland, South Africa, Spain and Israel are down. Index futures in the States point to a moderate up open for the cash market, coming off the CPI data.
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The dollar is up. Oil is up; copper is down. Gold is up; silver is down. Bonds are down. Bitcoin is up.
Stories/News from Seeking Alpha…
No hands!
The long road to the robotaxi revolution has come to an end… for General Motors (GM). The company, which has been developing driverless taxis under its Cruise brand, has pulled the plug on the project due to the amount of time and resources needed to scale the business, as well as “an increasingly competitive robotaxi market.” It’s a big step back for the automaker, which has plowed more than $10B into Cruise since 2016, and also comes along with plans by GM to scale back investment in electric vehicles.
Backdrop: Cruise has been in hot water since last year. Its license to offer rides in California got suspended after one of its robotaxis dragged a pedestrian for 20 feet and it just admitted to submitting a false report to influence a federal investigation. Uber (UBER) also gave up on its ambitions following a fatal self-driving crash in 2020, with its operations being absorbed by Aurora (AUR), while Lyft (LYFT) left the driverless road in 2021 and Ford (F) shuttered Argo AI in 2022. Notable reports have also suggested that Apple’s (AAPL) Project Titan, which was aiming for an autonomous electric vehicle, got disbanded this past February.
While halting its robotaxi efforts (which requires zero human intervention), GM will focus on driver assistance technology for personal vehicles by combining its know-how from Cruise with its technical teams. The restructuring is expected to save the company $1B annually once the plan is completed, expected to occur in the first half of 2025. GM CEO Mary Barra previously said the Cruise business could generate $50B in annual revenue by 2030, but it appears that reality has now hit a dead end.
Still in the game: The clear front-runner in the robotaxi revolution is Waymo by deep-pocketed Alphabet (GOOGL), which just expanded robotaxi services in Los Angeles and Miami. Next up is Tesla (TSLA), which has staked its future on the driverless Cybercab (most recently promised for 2026). What has made things so complicated is the myriad of inputs that are needed to achieve near-100% accuracy, and the sheer costs of engineering and manufacturing to support the new technology. Other drivers in the race include Zoox by Amazon (AMZN), as well as global players like Apollo Go by Baidu (BIDU) in China.
What else is happening…
Will November’s inflation data map out a tougher path to 2%?
Trump vows quick permits for anyone investing this amount in U.S.
Microsoft (MSFT) shareholders vote no to bitcoin investment pitch.
SpaceX (SPACE) is now the world’s most valuable private startup.
Walgreens (WBA) jumps amid talks to sell itself to PE firm Sycamore.
Albertsons (ACI) falls as judges block $24.6B sale to Kroger (KR).
FTC chair pick vows to end ‘Big Tech’s vendetta against free speech.’
GameStop (GME) piles up more cash in Q3 even as sales fall off.
Dave & Buster’s Entertainment (PLAY) loss widens, CEO resigns.
US Steel (X) plunges as Biden set to block sale to Japan’s Nippon.
Today’s Economic Calendar
07:00 AM MBA Mortgage Applications
08:30 AM Consumer Price Index
10:30 AM EIA Petroleum Inventories
01:00 PM Results of $39B, 10-Year Note Auction
02:00 PM Treasury Statement
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Good morning. Happy Tuesday.
The Asian/Pacific markets were mixed. China, South Korea, Singapore and the Philippines did well; Hong Kong, Taiwan and New Zealand were weak. Europe, Africa and the Middle East are mostly weak. Denmark and the Czech Republic are up; the UK, Poland, France, Turkey, South Africa, Finland, Switzerland, Norway and Sweden are down. Index futures in the States point to a slight up open for the cash market.
————— VIDEO: State of the Market —————
The dollar is up. Oil and copper are down. Gold is up; silver is down. Bonds are down. Bitcoin is up.
Stories/News from Seeking Alpha…
New wealth unit
There’s a big restructuring coming to Vanguard, one of the largest providers of mutual funds and ETFs. The closely held company is spinning out its $900B Advice & Wealth Management division into a standalone unit as it looks to capture additional revenue sources. The business will be managed by Joanna Rotenberg, who most recently served as president of Personal Investing at Fidelity Investments and was the force behind splitting its wealth and brokerage offerings.
Quote: “Our goal is to further democratize our advice and wealth management offerings for our clients through enhanced technologies and offers,” declared Vanguard CEO Salim Ramji, who joined the firm from BlackRock (BLK) back in May.
Founded in 1975, Vanguard has long been known for popularizing passive ETFs through its many diversified and low-cost offerings. It’s done an amazing job at that, with nearly $10T in assets, and now wants to do the same with investment advice and management. It’s already stepped up its personal advisor services since 2015, appealing to a broader range of retail clients with its customer-focused services.
Wealth management has been a fast-growing area among banks and fintechs, like Goldman Sachs (GS), Morgan Stanley (MS) and new entrants like Robinhood (HOOD). Traditional asset managers that don’t adapt their models can lose a competitive edge in the current landscape, so they are looking to raise the bar with more advisers and insights. It might also be a big bet on the “Great Wealth Transfer” that will see trillions of dollars transferred from baby boomers to younger generations, who are more open to discussing money, finances and investing.
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What else is happening…
WSB survey results: Energy sector stocks are worth a look.
China opens probe over Nvidia (NVDA) monopoly concerns.
Google (GOOG) unveils ‘mind-boggling’ quantum computing chip.
UnitedHealthcare arrest: McDonald’s (MCD) review bombed on Google.
Rivian (RIVN) hits three-month high as this analyst flags bright future.
ByteDance, TikTok appeal court ruling that upheld forced sale in U.S.
AppLovin (APP) sees worst day in 2 years after failing to make the cut.
Boeing (BA) restarts 737 MAX production a month after strike ends.
Kimberly-Clark (KMB) will no longer make diapers for Costco (COST).
China signals looser monetary policy, lifting Chinese fintech and EV stocks.
Today’s Economic Calendar
06:00 AM NFIB Small Business Optimism Index
08:30 AM Productivity and Costs
11:00 AM Treasury Buyback Announcement
01:00 PM Results of $58B, 3-Year Note Auction
02:00 PM Treasury Buyback Results
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets were mixed. Japan, Hong Kong, Taiwan and Indonesia did well; China, South Korea and the Philippines were weak.Europe, Africa and the Middle East currently lean to the upside.The UK, France, Turkey, Norway, Hungary and Saudi Arabia are leading. Index futures in the States point to a slight down open for the cash market.
————— VIDEO: State of the Market —————
The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are up. Bitcoin is down.
Stories/News from Seeking Alpha…
Power plays
The 50-year reign of the Assad family in Syria has come to an end, with President Bashar al-Assad being granted asylum in Russia after a series of rebel groups overran Damascus. The rapid blitz brought an end to the bloody 13-year Syrian civil war and was enabled by new developments in the region in the aftermath of Oct. 7. Assad’s biggest backers have been weakened significantly, including Hezbollah (with Israel breaking Iran’s “Ring of Fire”) and Russia (which is bogged down in Ukraine and just allocated a third of its national budget for the war).
Backdrop: In the decade since the Arab Spring, there have been attempts to overthrow the brutal Assad dictatorship, as well as its ruling Alawite sect that are considered infidels by many Muslim factions. Looking to bring down the regime, the latest rebel advance was led by Hayat Tahrir al-Sham, or HTS, and its leader Ahmed al-Sharaa (Abu Mohammed al-Jawlani). The devoted Islamist group is an outgrowth of Al-Qaeda (Nusra Front) and has links to Islamic State, as well as being designated a terrorist organization by the U.S., Turkey and the United Nations.
HTS has attempted to moderate its jihadist image in recent years, but remember that the Taliban also promised an inclusive society when retaking control of Afghanistan in 2021, though things haven’t really worked out that way. While all the rebel groups were united in ousting Assad, in the absence of any power-sharing agreements, there will likely be a fight for control that’ll see various factions turn against each other. If that happens, there might be another exodus from Syria, which has already seen 5M of its citizens find their way to Turkey and Europe over the past decade.
Economic angle: Syria’s GDP shrank by 54% between 2010 and 2021, along with skyrocketing inflation, and many sectors were left in the control of oligarchs or the government. As a result, private consumption and investment remained weak, while black market trade flourished, with the Assad regime becoming one of the world’s largest producers of the illegal drug known as Captagon. Crude production is also only a quarter of what it once was, while there are sure to be tensions between rebel groups (including some backed by NATO member Turkey) and the Kurdish-controlled parts of Syria that command many of the country’s oil resources. Take the WSB survey.
What else is happening…
Trump won’t try to remove Powell, but would consider NATO exit.
As tariff talk increases, the EU finalizes a new free trade deal.
Google Payment sues CFPB after being placed under its supervision.
Former Intel (INTC) CEO asks people to pray and fast for employees.
Federal court upholds ban on TikTok; rival social media stocks gain.
Deal in the works to create the world’s biggest advertising giant.
Microsoft’s (MSFT) plan to win the console war: Make everything an Xbox.
Deflation concerns in China as inflation drops to five-month low.
Goldman (GS) pulls out of UN-backed climate coalition for banks.
GameStop (GME) pops, then fizzles. Is the Roaring Kitty effect over?
Today’s Economic Calendar
10:00 AM Wholesale Inventories (Preliminary)
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