Archive for September, 2024

• Morning News: September 30, 2024
  Eddy Elfenbein, September 30th, 2024 at 7:04 am

  Libya Assembly Paves Way to Oil Restart With Central Banker Vote

  The Disconnect in Metals Markets Cannot Go On

  U.S. Ramps Up Hunt for Uranium to End Reliance on Russia

  U.S. Approves Billions in Aid to Restart Michigan Nuclear Plant

  How the US Lost the Solar Power Race to China

  China Has Broken the ‘Critical Minerals’ Market

  Xi Has Finally Realized What’s Ailing China

  China Removes Curbs on Home Buyers, Sparking Stock Market Surge

  FOMO Grips China Stock Buyers on ‘Epic’ Trading Day Before Break

  88-Year-Old Japanese Ex-Pet-Shop Owner Built a $14 Million Fortune Buying Stocks

  Japan Industrial Output Fell More Than Expected in August

  New Swiss Central Bank Chief Takes Charge in Shadow of Credit Suisse Trauma

  US Economy Gets Another Big Revision and This Time It’s Good

  JPMorgan’s ‘Jamie Premium’ To Be Tested as CEO Succession Looms

  Biden’s Antitrust Cop Got a Big Win. Will It Be His Last?

  DirecTV and Dish to Merge to Create Largest US Pay-TV Provider

  Qualcomm’s Chips Are the Stars of the New Windows AI PCs

  Military Veterans Help Plug Worker Shortages at EV, Battery Plants Sprouting Up in the US

  Dockworkers Strike Could Begin Tuesday, With Talks at an Impasse

  The Great €3 Billion Shipping Container Heist

  Jeep Maker Stellantis Warns on Profit as Automakers Face Perfect Storm

  Harvard’s Not-So-Smart Money: Two Decades of Poor Returns and Rich Pay

  CNN Wades Back Into the Documentary Business

  Wall Street Bets on $8.5 Billion Fashion Deal’s Fate in Trial

  Vintage Shopping Is Booming. Banana Republic and Others Get In on the Action

  The $1,000 ‘Micro’ Handbags Luxury Brands Are Pinning Their Hopes On

  Aperol Sales Pop in Summer. Its Owner Wants That to Happen All Year

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• Morning News: September 27, 2024
  Eddy Elfenbein, September 27th, 2024 at 7:02 am

  ‘Asian NATO’ Backer Ishiba to Become Japan PM as Race Jolts Yen

  China’s Market Marred by Glitches as Frenzy Grips Stocks

  Thailand’s Pension Fund Earmarks $11.6 Billion for Global Investment Overhaul

  Ghana Cuts Rate by Most in Six Years With Inflation Seen Easing

  Lower Interest Rates Don’t Guarantee a Soft Landing

  Biden’s Economic Record Beats Trump’s, With Some Caveats

  Why a President Cannot Whip Inflation

  The Tech Bro Style in American Politics

  5 Days With Elon Musk on X: Deepfakes, Falsehoods and Lots of Memes

  Russia’s Crypto Mining Tycoon Builds Fortune From Putin’s U-Turn

  Sports Betting Apps Are Even More Toxic Than You Thought

  Arm Is Rebuffed by Intel After Inquiring About Buying Product Unit

  Amazon’s $4 Billion Anthropic Deal Cleared by UK Watchdog

  Europe Can’t Seem to Kick Its Russian Energy Habit

  EU Aims to Block Chinese Hydrogen Tech in New Auction Guidelines

  Brazil’s Oil Capital Gets a Paradoxical Vote of Confidence

  The Carbon Market’s Last Hurdle

  Nuclear Power Is the New A.I. Trade. What Could Possibly Go Wrong?

  The Energy Boss Overhauling the Grid for AI and Net Zero

  A High-Profile Clean-Energy Startup Is Running Short on Cash

  The Race to Save America One Seed at a Time

  Port Operators Ask Regulator to Force Dockworkers to Negotiate

  U.S. Safety Officials Urge Boeing, FAA to Address 737 Rudder System

  Stellantis Keeps Slashing in Spite of Signs It Has Cut Too Deep

  Forvia Cuts Sales, Margin Outlook on Market Uncertainty

  LVMH Expands Industry Influence With Investment in Moncler

  H&M to Miss Margin Target as Higher Costs Hurt Earnings

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• Morning News: September 26, 2024
  Eddy Elfenbein, September 26th, 2024 at 7:06 am

  China’s Politburo Supercharges Stimulus With Housing, Rates Vows

  China Weighs $142 Billion Capital Injection Into Top Banks

  World Bank Seeks LGBTQ Compromise to End Loan Freeze in Uganda

  Swiss Central Bank Delivers Third Straight Rate Cut

  Yellen to Call for More Financial Stability Work, Thoughtful Regulation

  Fed’s Rate Cut Is Jolting Small Businesses to Spend Again

  When Will Money-Market Funds Lose Their Allure?

  Knowing the Future Won’t Make You Money

  Top Bankers Chase a Big Payday by Defecting to Private Credit

  Commerzbank to Begin Talks with UniCredit As It Woos Investors with Profit Goals

  Trump and Harris Want More Crypto Innovation. Yikes.

  Why Do People Like Elon Musk Love Donald Trump? It’s Not Just About Money.

  NYC Mayor Eric Adams Indicted After Federal Corruption Probe

  Newsmax Defamation Case Over 2020 Election Is Set to Begin

  A Green Jobs Program Touted High Wages. Some Trainees Feel Misled

  Why Moves by Amazon and Comments by Jamie Dimon Don’t Threaten an End to Remote Work Benefits

  Powering AI Leapfrogs Climate Concerns

  OpenAI Discusses Giving Altman 7% Stake in For-Profit Shift

  Mark Zuckerberg’s AI Vision Makes Metaverse a Slightly Easier Sell

  Ubisoft Analysts Vent After Warning Sends Shares to Decade-Low

  BASF Slashes Dividend, Plans Portfolio Shake-Up in Strategy Shift

  Southwest Airlines Sets $2.5 Billion Buyback in Turnaround Plan

  Starbucks Removes Howard Schultz’s Beloved Italian Pastry Brand From Many Stores

  Diageo Warns of Continued Challenges as Consumers Remain Cautious

  What Does Baseball Lose When the A’s Leave Oakland?

  H&M to Miss Margin Target as Higher Costs Hurt Earnings

  The Addiction to Discounting at Michael Kors Is Exposed in Court

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• Morning News: September 25, 2024
  Eddy Elfenbein, September 25th, 2024 at 7:07 am

  Milei’s Austerity Ravages a Factory Hub at the End of the World

  The Net Zero Overhaul

  Bankers Say What They Really Think About Net Zero at Climate Week

  The High-Stakes Spat Over How Much Oil the World Really Needs

  A Coal Windfall Lays Bare China’s Steel Pain

  China and EU Seek Deal to Avert EV Tariffs

  China Cuts One-Year Policy Rate by Most Ever in Stimulus Drive

  Xi’s Economic Adrenaline Shot Is Only Buying China a Little Time

  Global Economy Moves Beyond Inflation Crisis to Stable Growth

  France Prepares to Raise Taxes on Businesses and the Rich

  Trump’s Low-Tax, High-Tariff Strategy Could Clash With Economic Realities

  Inside Harris’s Big Economic Pitch

  Mark Zuckerberg Is Done With Politics

  US Investigating SAP, Carahsoft for Potential Price-Fixing

  US Accuses Visa of Monopolizing Debit Card Swipes

  Visa, Google, JetBlue: A Guide to a New Era of Antitrust Action

  We Asked a Nobel Prize-Winning Economist How to Fix Fintech

  How Americans’ Trust in Big Business Went From Bad to Worse

  A College Taps Wall Street Playbook to Rival Ivies on Admissions

  Micron’s Results May Reveal an AI Winner Trading at a Discount

  Inside Activision and Blizzard’s Corporate Warcraft

  US Firms Reaching Out as Biosecure Act Closes in, Piramal Says

  Southwest Air’s Lackluster Profit Fuels Pressure to Revamp Business Model

  Billionaire’s China Supermarket Deal Causes Swift Wealth Wipeout

  Waiting for the Miracle of Church-to-Housing Development

  Shein Faces Italian Antitrust Scrutiny Over Environmental Claims

  How Hello Kitty Took Over the World

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• CWS Market Review – September 24, 2024
  Eddy Elfenbein, September 24th, 2024 at 5:52 pm

  (This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

  The Federal Reserve Cuts By 0.5%

  Last week, the Federal Reserve voted to lower interest rates by 0.5%, although I think it’s more accurate to say that the Fed undid some of the historically aggressive rate hikes it deployed in 2022 and 2023.

  Over a 16-month period, the Fed hiked short-term interest rates a total of 525 basis points. The aggressive rate hikes were intended to combat a nasty bout of inflation. At one point, inflation was running at more than 9%.

  Now, more than a year after the last Fed hike, and with inflation trending below 3%, the central bank decided to slash rates by 0.5%.

  I admit I didn’t think the Fed would go through with a rate cut that large. So far, Wall Street seems quite pleased with the move. Today the S&P 500 closed at another all-time high, its 41st of the year. The Nasdaq was up as well but it’s still below its high from more than two months ago.

  

  Overall, this has been a good year for the stock market. The S&P 500 Total Return Index, which includes dividends, is up 21% this year. We’re about to close out Q3, and the S&P 500 is on track for its fourth quarterly gain in a row.

  It looks like this will only be the first in a long series of rate cuts. For the November meeting, traders are evenly split on whether the Fed will cut by 0.25% or by 0.50%. That meeting will be shortly after the election.

  While the exact plans are in doubt, the overall strategy is clear: the Fed is leaning towards cutting rates. Over the next four meetings, traders expect the Fed to cut interest rates by a total of 1.5%. That makes sense if you believe that inflation has been whipped.

  Still, this is an unusual rate cut because it’s happening while unemployment is still low (but rising) and the stock market is strong. I have my doubts that we can easily settle back into the economic environment we had before the last bout of inflation.

  It’s also unusual that the financial markets are seemingly unbothered even though there’s more evidence that Americans are apprehensive about the future. A good example is that earlier today, shares of Lowe’s (LOW) and Home Depot (HD) both reached new all-time highs. I highlight the home improvement duo because they’re a good indicator of what the economy is doing at the ground level.

  Other industrial stocks like 3M (MMM), Caterpillar (CAT), Sherwin-Williams (SHW) and Carrier Global (CARR) also hit new highs.

  What’s Next for the Fed?

  In last week’s Fed decision, the only dissenting vote came from Michelle Bowman. What makes her dissent noteworthy is that Bowman is a Fed Governor, not a regional bank president. Typically, Fed Governors vote in line with the Fed chair. Bowman’s dissent is the first for a Fed governor in nearly 20 years. She believes that the Fed should be cutting by only 0.25%.

  Earlier today, Bowman spoke before a group of bankers in Kentucky where she had a chance to explain her decision. She said that the Fed’s big cut “could be interpreted as a premature declaration of victory on our price-stability mandate.”

  There’s also a basic thought that inflation, however you want to measure it, is still not at the Fed’s target rate of 2%. The rate cut assumed that inflation will safely glide itself into port. Bowman also believes that a cut of 0.5% would signal to the market that the economy is in greater peril than it truly is.

  The two-year Treasury yield has a decent track record of running just ahead of the Fed on interest rates. Right now, there’s a big divergence between the two. Even after the rate cut, the Fed funds rate is still 1.2% above the 2-year yield. That’s a good sign that more cuts are coming.

  Indeed, there are still worrying signs about the economy. Earlier today, the Conference Board said that its measure of consumer confidence dropped from 105.6 in August to 98.7 for September.

  That was the biggest drop since August 2021, and it was below Wall Street’s expectations for 104. For context, before Covid, consumer confidence reached 132.6 in February 2020. Of the economic subgroups, the largest drop in confidence came among those making less than $50,000. Stocks are happy while consumers are tapped out.

  Another good example of this was today’s Case-Shiller report which showed that home values hit another new high, but housing affordability, which adjusts for mortgages costs, is near the lowest on record.

  Another troubling sign is that the price of gold has been rallying strongly. Typically, this is a crisis asset that investors flock to during turbulent times. Reuters reports that most banks expect gold’s run to last into next year. On Tuesday, the Midas metal got as high as $2,639.95 per ounce. Gold is having a great year.

  

  On Thursday, the government will offer its second revision to the Q2 GDP report. The last report said the economy grew at a real, annualized rate of 3% during the second three months of the year. I’m curious how well the economy did during Q3. For now, Wall Street is sounding optimistic. The Atlanta Fed’s GDPNow model estimates the economy grew at a 2.9% rate for Q3. Goldman Sachs said it expects growth of 3.0%.

  Typically, as the economy gets weaker and the Fed lowers rates, we can expect that defensive stocks will do well. Over the summer, many defensive stocks started to perk up and outgained the rest of the stock market.

  Here’s a chart of the S&P 500 Consumer Staples ETF (XLP) and the S&P 500 Healthcare ETF (XLV) divided by the S&P 500 ETF (SPY).

  

  You can see how the market changed its mind. At one point, no one wanted anything to do with defensive stocks, but this summer, they got hot again (although they’ve been slipping back down lately).

  I think this trend has more room to run. Defensive stocks offer more stability and often higher dividends than the rest of the market. Also, many defensive areas of the market have fallen to favorable valuation metrics.

  On our Buy List, this means stocks like Hershey (HSY) or Stryker (SYK). For income investors, that means utilities like American Water Works (AWK).

  That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

  – Eddy

• Morning News: September 24, 2024
  Eddy Elfenbein, September 24th, 2024 at 7:00 am

  Climate Change is So Bad, Even the Arctic is On Fire

  Europe’s Refinery Cutbacks Show a Fading Industry

  The U.S. Is Mining for Uranium

  If There’s a Nuclear Renaissance, Here are the Stocks to Watch, Says UBS

  China Is Striking Deals to Cement Its Role as Asia’s Trade Hub

  China Unleashes Stimulus Package to Revive Economy, Markets

  BOJ Governor’s Cautious Comments Damp Speculation of October Hike

  German Recession Angst Mounts as Companies Grow More Pessimistic

  UBS Ahead of Schedule on Cost Savings, CEO Says

  World Bank’s IFC Investments Hit Record $56 Billion in FY 2024, Managing Director Says

  World Leaders to Kick Off Money Fight With Renewable Goal Update

  Bond Anomaly That Twisted Yields From US to Germany Is No More

  Trump Dangles So Many Tax Breaks Even Some Advisers Are Confused

  How Amateur Investors Can Maximize Their Returns

  The Commercial-Property Market Is Coming Back to Life

  A Looming East Coast Port Strike Could Shake the Economy

  A Private-Equity Executive Pushes for Workers’ Stake in U.S. Companies

  Boeing Union Balks at Sweetened Pay Offer to Workers

  Rethinking ‘Checks and Balances’ for the A.I. Age

  Don’t Count on a Megadeal to Save Intel

  Intel Doesn’t Need a Takeover. It Needs a Turnaround.

  Huawei’s 3-in-1 Smartphone Hits Limits of Foldable Engineering

  Regional Airlines Are Doing Terribly. They Need a Recession.

  After Years of Warnings, Telegram Founder Cedes to Police Requests About Users

  Spurned by Social Media, Publishers Chase Readers on WhatsApp

  TikTok to Shut Down its Music Streaming Business in November

  Illegal Streaming of Live Sports Has Gone Mainstream. Can Anything Be Done?

  Restaurant Portions Are About to Get Smaller. Are Americans Ready?

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• Morning News: September 23, 2024
  Eddy Elfenbein, September 23rd, 2024 at 7:06 am

  The Game Isn’t Over for China But It Is ‘Garbage Time’

  China Stimulus Hopes Rise as PBOC Cuts Rate, Plans Briefing

  Argentina Dollar Deposits Spike by $8 Billion Under Milei

  Eurozone Faces Contraction as Soft-Landing Doubts Mount

  Euro Zone’s Teetering Economy Fuels Bets on Faster ECB Rate Cuts

  European Banks Are Factoring Climate Risks Into Loans, ECB Says

  The UK Is Nearly Done Burning Coal. Is Gas Next?

  London’s Ultra-Rich Flee the Threat of Rising Taxes

  Rightmove to Consider REA’s Sweetened $8 Billion Bid

  America’s Ambitious Climate Plan Is Faltering

  America’s Fiscal Exceptionalism Is All Too Real

  How Trump Could Upend Taxation in America

  Here’s What Happens to Markets When Interest Rates Fall, in Charts

  UniCredit Boosts Commerzbank Stake Despite Berlin Opposition

  BNP Paribas Signs Deal to Buy HSBC Private Banking Unit in Germany

  Palantir’s CEO and Wall Street Annoy Each Other Straight to the Bank

  Apollo to Offer Multibillion-Dollar Investment in Intel

  3 Reasons Why There is ZERO Chance of a Qualcomm, Intel Merger

  Siemens to Carve Out eMobility Electric Vehicle Charging Unit

  EVs Are Cleaner Than Gas Cars, But a Growing Share of Americans Don’t Believe It

  AstraZeneca and Daiichi Suffer New Setback With Mixed Breast Cancer Drug Results

  Ozempic and Wegovy Sales Will Soon Pay for $68 Billion of Novo R&D

  Boar’s Head Shutdown Deals a Hard Blow to a Battered Corner of Virginia

  Tempur Sealy to Sell Sleep Outfitters, Mattress Firm Stores

  They’ve Got a Plan to Fight Global Warming. It Could Alter the Oceans

  Tourism’s Next Battlefront: Water

  Meet the Birkin Bag of the Book World: Collectible, Covetable and Priced to Match

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• Morning News: September 20, 2024
  Eddy Elfenbein, September 20th, 2024 at 7:01 am

  Africa Floods Spread Misery Where 55 Million Already Face Hunger

  Brazil’s Online Gambling Craze May Be Hitting Consumer Spending

  China Budget Spending Slide Deepens in Worrying Sign for Economy

  China Leaves Benchmark Lending Rates Unchanged, Defying Expectations

  China Says It Will ‘Gradually’ Resume Imports of Japanese Seafood

  Japan Gears Up for More Than $3 Billion of IPOs in October

  China Weight Removing Major Homebuying Curbs to Boost Demand

  Sanctions on Russia’s Oil Tankers Lack Bite

  EU Plans New €35 Billion Loan for Ukraine Under G-7 Plan

  Pope Francis Tells Catholic Cardinals He Wants ‘Zero Deficit’ Agenda

  The UK May Be Your Best Bet For the Next Decade

  Treasury Yields Move Lower as Investors Digest Unemployment Data After Fed Cut

  Now That Rates Are Falling, Let’s Turn to Other Matters

  The Fed Risks a Political Backlash by Spurring Economy Close to Election

  Americans Are Desperate for Relief. The Rate Cut Is a Glimmer of Hope.

  Jerome Powell Says the Fed Can Cut Rates But It Can’t Fix the Housing Crisis

  Biden Awards $3 Billion to Boost Domestic Battery Production

  Microsoft’s AI Power Needs Prompt Revival of Three Mile Island Nuclear Plant

  Amazon Is Trying to Kill the Meeting Before the Meeting

  Amazon Fire TV Stick Sales in Germany at Risk After Court Ruling

  Boeing Girds for Long Strike as Gig Economy Gives Workers Clout

  What Happened to 23andMe?

  Nike Has Gone and Done It

  Nike Replaces CEO With Veteran Executive Hill in Revival Bid

  Tupperware (the Brand) May Fail. Tupperware (the Word) Will Survive.

  Is Your Bag Luxurious Enough for a Government Lawsuit?

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• Morning News: September 19, 2024
  Eddy Elfenbein, September 19th, 2024 at 7:05 am

  The Indian Apartment Behind Russian Efforts to Break US Gas Sanctions

  A Record Gold Price Offers Miners a Shot at Investor Redemption

  Chinese Automakers’ Answer to E.U. Tariffs: Build in Europe

  Spain Hails China as Strategic Partner Ahead of EV Tariffs Vote

  Avoiding Apocalyptic Satellite Crashes Comes Down to China Checking Its Email

  Xi Unleashes a Crisis for Millions of China’s Best-Paid Workers

  Taiwan Central Bank Leaves Key Interest Rates Unchanged

  Bank of England Holds Off on Rate Cut After Fed Goes Big

  BOE to Slash Bond Portfolio by £100 Billion Over Next Year

  Markets Got Powell’s Message — Smaller for Longer

  Nasdaq Futures Jump 2% as Big Fed Cut Spurs Rally

  The Fed Has Significantly Improved the Odds of a Soft Landing

  America’s Inflation Fight Is Ending, but It’s Leaving a Legacy

  In a Major Shift, the U.S. Government Explores Giving Renters Cash, Not Vouchers

  US Bank Stocks Rise as Jumbo Rate Cut Eases Default Risk, Cost Concerns

  UniCredit’s Orcel Takes Aim at Europe’s Banking Borders with Commerzbank Bet

  Apple Gets EU Warning to Open Up iPhone Operating System

  Salesforce Is a Dark Horse in the AI Race

  Startup Founded by Ex-Google Exec to Use AI to Forecast Weather

  Lazard Follows Goldman in Setting Up Mideast HQ in Saudi Arabia

  Company Says It Is Investigating Radios Targeted in Lebanon Blasts

  Saudi Arabia Agrees to Build Golf Venues With Topgolf Callaway

  Axel Springer Strikes Deal With KKR to Split Up Publishing Giant

  Amazon’s New ‘Shark Tank’-Style Show Gives Winners Top Billing in Its Store

  Darden Strikes Uber Deal to Deliver Olive Garden Breadsticks and Pasta

  Tucker Carlson, Taking Aim at Zyn, Plans New Nicotine-Pouch Brand

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• Morning News: September 18, 2024
  Eddy Elfenbein, September 18th, 2024 at 7:06 am

  UK Gas Plants Are Hardly Running as Renewable Power Floods Grid

  Gold-Rich Sudan Talks Mining With Russia as War Alliances Shift

  US Decision on Nippon Bid for US Steel Pushed Back to After Nov Election

  Cleaning Up Grids in the Developing World Is a Daunting Task

  ECB Must Remain Patient to Fully Reach 2% Price Goal, Nagel Says

  Brazil’s Tinkering to Meet Fiscal Target Threatens to Dent Credibility

  Bank of Japan Expected to Stand Pat; All Eyes for Clues on Timing of Next Hike

  Indonesia’s Central Bank Kicks Off Easing Cycle

  Why Uncertainty Still Hangs Over the Fed’s Big Decision

  The Fed Is a Poor Guide for Stock Investors

  Traders Lock In Fed Bets as Rate-Cut Size Debate to Finally End

  A Fed Rate Cut Would Cap a Winning Streak for Biden and Harris on Prices

  Hedge Fund Titans Breed a $14 Billion Pack of Startup Cubs

  Dalio Sees ‘Real Issues’ in China, Keeps Small Exposure

  JPMorgan CEO Jamie Dimon to Visit Africa in Growth Push

  US Faces a Deficit of 6 Million Workers in Less Than a Decade

  The Unemployment Measure You’ve Never Heard is Flashing a Recession Warning

  Amazon’s Andy Jassy Ordered a Full-Time Return to the Office—but Research Says He’ll Backtrack Next Year

  Foldables Are Becoming Good Enough to Be Your Next Smartphone

  G.M. Electric Vehicles Gain Access to Tesla Chargers

  UAW Clashes With Jeep Maker Stellantis, Threatening Strike

  How $90,000 Jeeps Made a Fool Out of Me

  Craigslist Founder Pledges $100 Million to Boost U.S. Cybersecurity

  Tupperware Files for Bankruptcy as Turnaround Effort Fails

  How a Tariff Rule Aimed at China Could Affect U.S. Ad Spending

  Messi Fuels a Wealth Boom in US Soccer That Risks Unraveling Once He’s Gone

  South Korean Role Model’s Reputation at Stake in Kakao Trial

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