Archive for October, 2016

• Lowest Initial Claims Report Since 1973
  Eddy Elfenbein, October 13th, 2016 at 9:15 am

  We finally broke it. Today’s initial claims report came in at 246,000. That’s the lowest since November 24, 1973 when the report was 233,000.

• Morning News: October 13, 2016
  Eddy Elfenbein, October 13th, 2016 at 7:07 am

  Disappointing China Trade Data Spurs Fears Recovery May Be Faltering

  China Tops US in Numbers of Billionaires

  Deutsche Bank Said to Implement Hiring Freeze as CEO Cuts Costs

  New Wells Fargo CEO Just Months Ago Denied the Bank Had a Sales Problem

  Hanjin Shipping Puts Asia-U.S. Shipping Network Up For Sale

  Ericsson’s Inefficiency Seen Leading to Further Job Reductions

  Snapchat Picks Morgan Stanley, Goldman To Lead IPO

  Kirin Bets on Future of Craft Beer With Brooklyn Brewery Stake

  Unilever Defends Brexit Price Rises After Tesco Spat

  Stanley’s Tool Deal Measures Up

  Uber Drivers Ruled Eligible for Jobless Payments in New York State

  Chevron Confirms Is In Discussions For Potential Bangladesh Sale

  SEC Said to Demand That Cooperman Agree to Hedge Fund Suspension

  Jeff Carter: What If All The Poor People Were Gone?

  Roger Nusbaum: Managing Obvious Risks

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• Stumpf Out at Wells Fargo
  Eddy Elfenbein, October 12th, 2016 at 5:04 pm

  Finally! John Stumpf is out as CEO of Wells Fargo.

  Here’s the WSJ:

  Wells Fargo & Co. Chairman and Chief Executive John Stumpf, under fire for the bank’s sales-tactics scandal and his own handling of its fallout, is stepping down from both roles, effective immediately, the bank said Wednesday.

  Mr. Stumpf will be replaced as head of the third-largest U.S. bank by assets by President and Chief Operating Officer Timothy J. Sloan, who was widely seen as his heir apparent.

  Mr. Stumpf won’t receive a severance package, the bank said. The board, at Mr. Stumpf’s own recommendation, had previously decided he should relinquish $41 million in unvested equity, one of the biggest-ever forfeitures of pay by a bank chief. He still retires with tens of millions of dollars earned during roughly 35 years at the bank.

• Fed Minutes from their September Meeting
  Eddy Elfenbein, October 12th, 2016 at 2:37 pm

  The Federal Reserve just released the minutes from their last meeting. These minutes are usually pretty dull, and this latest batch is no exception.

  Here’s a key passage and it highlights why I think rates will go up in December.

  Members continued to expect inflation to remain low in the near term, but most anticipated that, with gradual adjustments in the stance of monetary policy, it would rise gradually to the Committee’s 2 percent objective over the medium term. Many members remarked that there were few signs of emerging inflationary pressures or that progress on inflation had been slow. A couple of other members pointed to recent readings on core CPI inflation as suggesting that PCE price inflation was close to meeting the Committee’s 2 percent inflation objective. Nonetheless, in light of the current shortfall of inflation from 2 percent, members agreed that they would continue to carefully monitor actual and expected progress toward the Committee’s inflation goal.

  After assessing the outlook for economic activity, the labor market, and inflation, as well as the risks around that outlook, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent at this meeting. Members generally agreed that the case for an increase in the policy rate had strengthened. But, with some slack likely remaining in the labor market and inflation continuing to run below the Committee’s objective, a majority of members judged that the Committee should, for the time being, await further evidence of progress toward its objectives of maximum employment and 2 percent inflation before increasing the target range for the federal funds rate. It was noted that a reasonable argument could be made either for an increase at this meeting or for waiting for some additional information on the labor market and inflation. A couple of members emphasized that a cautious approach to removing accommodation was warranted given the proximity of policy rates to the effective lower bound, as the Committee had more scope to increase policy rates, if necessary, than to reduce them. Three members preferred to raise the target range for the federal funds rate by 25 basis points at this meeting. They cautioned that postponing policy firming for too long could push the unemployment rate markedly below its longer-run normal rate over the next few years. If so, the Committee might then need to tighten policy more rapidly, thereby posing risks to continued economic expansion. A couple of these members expressed concern about the potential adverse effects on the credibility of the Committee’s policy communications if the next step in the gradual removal of accommodation was further postponed.

• Morning News: October 12, 2016
  Eddy Elfenbein, October 12th, 2016 at 7:14 am

  What The Heck’s Going On With The New Global Reserve Currency, The Chinese Yuan?

  Eurozone Industrial Production Picks Up in August

  China Car Sales Rise Sharply in September

  Central Banks Consider Bitcoin’s Technology, If Not Bitcoin

  Comcast Paying $2.3 Million to Settle FCC Probe

  Ericsson Shares Plummet After It Warns on Profit and Outlook

  Toyota Motor, Suzuki in Talks on Business Partnership

  GM Buys Stake in Chinese Car-Sharing Company

  Theranos Accused of Duping Investors in Tests, Performance

  Amazon to Expand Grocery Business With New Convenience Stores

  Alcoa Stock Tumbles as Profit, Revenue Miss Expectations

  Google Bought A Company That Helps Brands Get Product Placements in YouTube Videos

  The World’s Best IPO Has Gained 6,000%, But Analysts Say Stay Away

  Jeff Carter: Make Bets Where Decision Making Is Intuitive, and Market is Inefficient

  Cullen Roche: How the GOP Lost A Slam Dunk Election

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• An Ultra-Rare Market Event Raises Questions
  Eddy Elfenbein, October 11th, 2016 at 9:16 am

• Morning News: October 11, 2016
  Eddy Elfenbein, October 11th, 2016 at 7:14 am

  Troubled China Credit Could Cost Banks $1.7 Trillion, S&P Says

  Snooping in the Bathroom to Assess Credit Risk in China

  Oil Drops From 15-Month High on Uncertainty Over Russian Stance

  Egypt Stocks Fall on Signs of Deepening Rift With Saudi Arabia

  Donald Trump Tried To Call Out Warren Buffett – He Probably Didn’t Expect This Response

  Verizon CEO Says Evaluating Whether Yahoo Hack Had ‘Material Impact’

  Why Twitter Shouldn’t Sell

  Wells Fargo’s Cross-Selling Drama Weighs on Wall Street Earnings

  What Walmart Must Do to Fight Back at Amazon

  Samsung to Kill Off Note 7 After Second Round of Battery Fires

  Tyson Foods, a Meat Leader, Invests in Protein Alternatives

  The Small Business Health Insurance Roller Coaster – What Is Next?

  Duke Energy Leaving Latin America Through $1.6 Billion in Deals

  Howard Lindzon: The Hard Raise…I Know It Well

  Josh Brown: The Obvious Follow-Up Question

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• What Happened to Fearing the Fed?
  Eddy Elfenbein, October 10th, 2016 at 4:37 pm

• Last Week’s Strategy Call
  Eddy Elfenbein, October 10th, 2016 at 1:57 pm

  Here’s the audio from last week’s Strategy Call with John Schindler and me.

  My line was a bit quiet so I started yelling by the end.

• So I Guess Twitter’s Not Getting Bought Out?
  Eddy Elfenbein, October 10th, 2016 at 10:15 am