Morning News: September 20, 2024
Posted by Eddy Elfenbein on 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
Posted by Eddy Elfenbein on 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
Posted by Eddy Elfenbein on 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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Morning News: September 17, 2024
Posted by Eddy Elfenbein on September 17th, 2024 at 7:05 am

Japan Halts Removal of Melted Fuel at Fukushima on Camera Outage

Biden Struggles to Refill Oil Reserve on the Cheap

US Allies Struggle to Break China’s Dominance of Rare Earths

China’s ‘Silver Economy’ Is Thriving as Birthrate Plunges

German Economic Expectations Darken Further

DP World Teams With Nedbank to Finance More Africa Trade

Workforce Dropouts Make UK ‘Sick Man of Europe,’ Report Says

Banking’s New Era of Capital Puts Watchdogs on the Spot

Bank Mergers May Get Tougher to Do

Banking Deal Oversight Expected to Get a Major Revamp

Hong Kong’s Biggest Listing in Years Lures Back Global Investors

Bets Are In, But the Fed’s Still Running the Casino

Markets Hinge on Powell Emulating Greenspan’s Soft Landing

Will Lower Rates Unleash a Business Boom? It’s Complicated.

What Fed Rate Cuts Will Mean for Five Areas of Your Financial Life

Trump’s Banker Brawls With Whistleblowers, Marxists and Shorts

Business Schools Are Undergoing Unusual Change

A Decade After ‘Lean In,’ Progress for Women Isn’t Trickling Down

Biggest Question from Kroger-Albertsons Trials: What’s a Grocery Store?

Kroger Antitrust Case Could Open Up New Bag of M&A Possibilities

Microsoft Plans New $60 Billion Buyback, Raises Dividend 10%

Amazon’s Five-Day Office Mandate Isn’t as Strict as it Sounds

Meta Plans to Bar the Russian TV Network RT From Its Apps

Instagram, Facing Pressure Over Child Safety Online, Unveils Sweeping Changes

Instagram’s New ‘Teen Accounts’: What Parents and Kids Need to Know

Sony Is Rethinking the Console Business Model With PS5 Pro

Universal Music Banks on Subscriptions, Partnerships to Drive Revenue Growth Through 2028

PGA Tour’s Saudi Deal Drags On With Players Arguing Over Pay

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Morning News: September 16, 2024
Posted by Eddy Elfenbein on September 16th, 2024 at 7:03 am

UK Targets London Outpost of Iran Oil Kingpin ‘Hector’

Why Washington and Big Oil Are Investing Billions in Ammonia

The Power Grid Has Withstood the Heat, but Electric Supplies Are Tight

Big Energy Issue in Pennsylvania Is Low Natural Gas Prices. Not Fracking

Saipem Shares Rise on $4 Billion Contract From QatarEnergy

Nigeria Set to Pause Rates as Inflation Slows to Six-Month Low

Why Europe Is Embracing the New American Growth Model

Fed Ready to Unshackle US Economy With Soft Landing at Stake

Fed Enters Tricky Terrain: Rate Cuts in a Decent Economy

The Fed Is Still Banking on a Labor Market Miracle

Bill Dudley: The Fed Should Go Big Now. I Think It Will

S&P 500 Is Surviving Big Tech’s Slide as ‘Other 493’ Catch Up

Ten Money Managers Exit Eisler as Hedge Fund’s Gains Stall

Hedge Funds Switch to Buying Banks, Insurance and Trading Firms, Says Goldman Sachs

UniCredit, Commerzbank Merger Could Add Shareholder Value, Orcel Tells Paper

Private Equity’s Insurance Bets Raise Risks, BIS Researchers Say

A $33,000-a-Year Child Care Burden Vexes Harris, Trump Campaigns

TikTok Fights US ‘Sale-or-Ban’ Law in Key Appeals Court Faceoff

China Claims Chipmaking Gear Advance Despite Tightening US Curbs

AI Boom Is Driving a Surprise Resurgence of US Gas-Fired Power

Waymo Sets Its Sights on ‘Premium’ Robotaxi Passengers

After Layoffs, Tesla’s Supercharger Expansion Slows

‘Buy America’ Feud Risks 200 Mile-an-Hour Rail From Vegas to LA

Tencent’s Pony Ma Reclaims Title of China’s Richest Person

These Millionaires Can Afford Their Dream Home. They’re Renting Instead

Rupert Murdoch is Set to Face His Kids in Court, with Fox News’ Fate in the Balance

The Customized Drink Is Out of Control

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Morning News: September 13, 2024
Posted by Eddy Elfenbein on September 13th, 2024 at 7:02 am

UK’s Approval of First Coal Mine in Three Decades Unlawful, Court Rules

The Hague Is World’s First City to Ban Oil and Air Travel Ads

Truck Maker Volvo Delays Construction of Battery Plant in Sweden

Stoppage at China Lithium Mine Won’t Be Enough to Ease Supply Glut

China Internal Passport Revamp Could Fuel New China Growth

U.S. Moves to Block a Popular Tariff-Free Path for Chinese Goods

Dejected Social Media Users Call ‘Garbage Time’ Over China’s Ailing Economy

China Is Risking a Deflationary Spiral

Russia Hikes Key Rate, Might Do So Again as War Fuels Price Rises

Fed to Pursue Three Quarter-Point Cuts This Year, Economists Say

The Fed Has No Choice But to Assume the Worst

Behind the Trump Crypto Project Is a Self-Described ‘Dirtbag of the Internet’

HSBC Said in Talks to Sell South African Unit to FirstRand

US Driving and Congestion Rates Are Higher Than Ever

US Housing Market Awaits Boost After Worst Key Season in Years

China Fines PwC $62 Million for Botching Its Work for Evergrande

China’s First Retirement Age Hike Since 1978 Triggers Discontent

Stranded in the CrowdStrike Meltdown: ‘No Hotel, No Food, No Assistance’

Boeing’s Seattle Workers Walk Out in First Strike Since 2008

United Airlines Taps Elon Musk’s Starlink for In-Flight Wi-Fi

Inside Elon Musk’s Mushrooming Security Apparatus

Intel Needs to Rethink What Leadership Means in New Chip World

Future of Murdoch Empire Comes Down to a Court in Nevada

AstraZeneca’s CEO Isn’t Distracted by the Race to Tackle Obesity

Luxury Brands’ New Snag? Handbag Arbitrage

A Stake in the Miami Dolphins Is Back on the Block

College Football Players Learn an Ugly Truth About Getting Paid

The Vegas Sphere’s First Live Sporting Event Will Be an Expensive One

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Morning News: September 12, 2024
Posted by Eddy Elfenbein on September 12th, 2024 at 7:07 am

Pakistan Cuts Rates To Revive Economy as Inflation Cools

Hawkish BOJ Board Member Says Rates Should Be Raised to at Least 1%

Bank of England Eyes Growth with Lighter Bank Capital Reforms for UK Lenders

ECB Cuts Interest Rates for Second Time in Three Months

Germany Lobbies EU to Help More Industries With Power Bills

Broken Blades, Angry Fishermen and Rising Costs Slow Offshore Wind

Wall Street Quietly Turns Tail on Its Sustainability Commitments

From Fed to Elections, FX Turbulence Buffets Dollar Investors

JPMorgan to Cap Junior Banker Hours, BofA Monitors Workloads

Mastercard to Acquire Insight Partners’ Recorded Future for $2.65 Billion

Inflation Numbers Resolve What the Debate Couldn’t

Layoffs Are Low. That Doesn’t Mean the Labor Market Is Strong.

Young Chinese Émigrés Confront America’s Brutal Visa Lottery

How America Became a Republic of Distrust

Homebuyers Hit by Price Surge, Supply Crunch Rock 2024 Election

Madison Realty Capital Closes $2 Billion Property Debt Fund

What US and EU Crackdowns on Big Tech Mean for Apple, Google, X

OpenAI Aims for a $150 Billion Valuation

Intel Has Only Tough Options After Its Long and Stinging Fall From Grace

How the Election Is Sinking a $15 Billion Business Deal

Stellantis to Suspend e-Fiat 500 Output on Poor Europe Demand

G.M. and Hyundai Plan to Work Together on New Vehicles

Boeing Workers Cast Crucial Strike Vote Amid Contract Backlash

SpaceX Astronauts Conduct Spacewalk, Putting New Spacesuits to Test

Norfolk Southern’s CEO Survived an Activist Attack. Then Came Talk of an Affair

General Mills to Sell North American Yogurt Business for $2.1 Billion

Ozempic Is Selling So Well an Insurer Wants $1 Million in Payments Back

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Morning News: September 11, 2024
Posted by Eddy Elfenbein on September 11th, 2024 at 7:05 am

UK Eyes More Exports to French-Speaking Africa

Prices at the Pump Fall, a Win for Efforts to Fight Inflation

Is the Oil Price Slide a Red Flag or a Small Mercy?

Trader Hartree Sees Policy Reforms Lifting Asia’s Carbon Markets

Yen Strengthens After BOJ Board Member Signals More Rate Hikes to Come

A Recession Signal Is Flashing Red. Or Is It?

US CPI to Show Another Muted Rise as Fed Debates Rate-Cut Size

Details of New US Bank Capital Rules Still Uncertain with Election Looming

UniCredit Makes Move on Commerzbank as Germany Starts Exit

HSBC Signals Maltese Exit Days After New CEO Takes Charge

Murdoch’s $7.3 Billion Takeover Bid Rebuffed by Rightmove

US Crypto Stocks Fall on Rising Bets on Harris’ Win After Presidential Debate

The Big Takeaways for Business from Debate Night

Taylor Swift’s Harris Endorsement Turns Tables on AI Abusers

Shortfall in Young Engineers Threatens Nuclear Renaissance

Europe Confronts Its Tech Dilemma: Regulate or Innovate

China Wants to Replace Jeff Bezos as Musk’s Greatest Space Threat

How Memphis Became a Battleground over Elon Musk’s xAI Supercomputer

When Self-Driving Cars Don’t Actually Drive Themselves

McDonald’s Rolls Out Kiosks That Take Cash, Pushing Diners Away From Cashiers

Campbell Drops Soup From Its Name, Not Its Plans

Topgolf Sent Callaway Into the Rough

LVMH Close to F1 Sponsorship Deal for Range of Luxury Brands

Lululemon Is Seeing a Slowdown in Its Women’s Business. Has It Reached Its Ceiling?

Kevin Plank Broke Under Armour. Can He Fix It?

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CWS Market Review – September 10, 2024
Posted by Eddy Elfenbein on September 10th, 2024 at 6:03 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 idea that a bell rings to signal when to get into or out of the stock market is simply not credible. After nearly fifty years in this business, I don’t know anybody who has done it successfully and consistently. I don’t even know anybody who knows anybody who has.” – Jack Bogle

The Market Stumbles Into September

How things change after Labor Day! In last Tuesday’s issue, I told you that Labor Day has often marked a tone shift on Wall Street, Historically, September and October have been tough times for the market. Well, we certainly learned that lesson again this year.

Presidential election years have been especially difficult for the stock market. From September 7 to October 12 in presidential election years, the Dow has lost an average of 2.72%.

On the Friday before Labor Day, the S&P 500 closed very close to a new all-time high, but last week, the index had its worst week of the year. That’s even more impressive when you recall that last week only had four trading days. The S&P 500 fell lower on all four days, and it culminated in last Friday’s underwhelming jobs report (more on that in a bit).

The market rebounded nicely yesterday and today. The market’s thinking seems to have shifted from, “Good news! The Fed will soon be cutting rates,” to “Bad news, the economy is getting weak, and the Fed will soon be cutting rates.”

The next test for the market will be tomorrow’s CPI report. The inflation numbers have been getting better but at a very slow pace. The consensus on Wall Street is that the headline and core rate of inflation increased by 0.2% last month.

Weak Jobs Report Drags Down Stocks

On Friday, the government said that the U.S. economy created 142,000 net new jobs last month. That’s not that good. It missed consensus by 19,000. For July, the economy created 89,000 new jobs.

The unemployment rate dropped by 0.1% to 4.2%, but the broader U-6 rate increased to 7.9% which is close to a three-year high.

The government also revised previous jobs reports lower. The total for July was cut by 25,000, and the June number was lowered by 118,000. Here you can see the steady decline in non-farm payrolls gains.

One bright spot in the report was average hourly earnings. That increased by 0.4% last month while the estimate was for a gain of 0.3%. Over the last year, average hourly earnings are up by 3.8%. That’s good to see, but it’s nearly in line with inflation.

The labor force participation rate was unchanged at 62.7%. It seems that more workers are shifting from full-time work to part-time. The household survey said that part-time employment increased by 527,000 and full-time decreased by 438,000.

From a sector standpoint, construction led with 34,000 additional jobs. Other substantial gainers included health care, with 31,000, and social assistance, which saw growth of 13,000. Manufacturing lost 24,000 on the month.

The Federal Reserve meets again next week. The policy statement will be released on Wednesday, September 18. According to the futures market, there’s a 100% chance that the Fed will cut rates. The only question is by how much.

Currently, the market thinks there’s a 67% chance of a 0.25% cut and a 33% chance of a 0.50% cut. Going by what Jerome Powell has said, I think the Fed is leaning towards a 0.25% cut. The futures market thinks there will be a 50 basis-points cut at the November meeting which will be two days after the election.

Investors should understand that the market is becoming more conservative. Value stocks and low-volatility stocks has been leading the market while many of the growth names have been lagging. Several prominent stocks are more than 20% off their highs. This will probably continue as rates head lower. I’m pleased to see that our Buy List has outperformed by a wide margin over the last two months. (It hasn’t always been that way!)

Stock Focus: Cass Information Systems

This week, I want to tell you about Cass Information Systems (CASS). Cass is a business services company based in St. Louis, Missouri. You probably have not heard of them, but Cass is crucial to many companies. Cass processes and pays 50 million invoices each year.

Cass wants to pay your company’s bills. The information services firm provides freight payment and information processing services to large manufacturing, distribution, and retail companies across the U.S.

Its offerings include freight bill payment, audit, and rating services as well as outsourcing of utility bill processing and payments. Its telecommunications division manages telecom expenses for large companies. Cass grew out of Cass Commercial Bank (now a subsidiary), which provides banking services to private companies.

The company’s international reach is truly impressive. Cass pays invoices in 185 countries and in 114 different currencies. Cass lets companies have complete visibility into every detail of their transportation spending with total trust in the data.

Cass helps save millions in telecommunications costs thanks to an expense management partner who studies the data and recommends savings initiatives. Cass helps pay utility bills reliably on time. Cass can also leverage benchmarking data for waste removal costs to negotiate new contracts. This helps save time and money.

This is a superb company that is largely ignored by Wall Street. This is an especially good time to look at Cass because it’s operating in a difficult environment.

In July, Cass reported Q2 earnings of 32 cents per share. That’s down from 52 cents for last year’s Q2. According to the company, Cass lost over “$100 million of non-interest-bearing funding due to a cyber event at a client and incurring an aggregate of $3.4 million of one-time expenses.”

CEO Martin Resch said, “We successfully onboarded several large facility clients, increasing year over year facilities transactions by 25.1%, with a full queue of additional signed deals still to implement.”

Now here are some important details on why I like Cass. The dividend currently yields close to 3%. That’s not bad in a lower-rate environment. Cass has very little long-term debt, and it’s sitting on a mountain (well, small hill) of cash. At last count, Cass’s cash comes to $223 million. That works out to $16.41 per share. This is important because it tells us that Cass is more efficient than it initially appears to be.

The stock hasn’t performed very well recently which catches my attention. By conventional metrics, Cass is reasonably priced. However, if Cass can return to the kind of growth it used to have, then this could be a very profitable position.

Historically, Cass has favored doing several small stock splits every few years. That may lead people to think that Cass hasn’t done as well as it has. Cass currently has over 1,000 employees and a market cap of $550 million.

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

– Eddy

P.S. There will be no Tuesday issue next week. I’m going to be at the Future Proof Conference in Huntington Beach, CA. If you’re around, please come by and say hello. We’ll be at booth #702.

Morning News: September 10, 2024
Posted by Eddy Elfenbein on September 10th, 2024 at 7:05 am

Japan Must Curb Clean Power Reliance, Warns Leadership Candidate

Side Hustles on eBay Gain Popularity in Japan as Inflation Bites

China’s $6.5 Trillion Stock Rout Worsens Economic Peril for Xi

China’s Continuing Export Surge Likely to Invite More Pushback

Edgy Traders Brace for Potentially ‘Pivotal’ Trump-Harris Debate

What Wall Street Wants to Hear at the Debate

For Trump, Tariffs Are the Solution to Almost Any Problem

Trump Is the Only One Threatening the Dollar

He Scammed People for Their Money. He Was Also a Victim.

Criminal Charge Against Outspoken Short Seller Unsettles Wall St.

Goldman Sachs to Post $400 Million Hit to Third-Quarter Results as It Unwinds Consumer Business

Bank of America Raises Minimum Wage to $24 on Way to $25 an Hour

Private Equity Fights Insurance for $15 Trillion Retirement Prize

This Global Financial Capital Is an AI No Man’s Land

Apple, Google Lose Multibillion Dollar Court Fights With EU

The College Dropout Who Invested Billions to Cozy Up With Elon Musk

Just Miles from Kroger’s Court Battle, a Food Desert Shows What’s at Stake

How a Japanese Suitor Misread Politics with U.S. Steel Bid

Bankers Ratcheting Up Oil Deals Drive a Deepening Market Split

OPEC Trims Oil Demand Outlook Further Amid Price Slump

Big Oil Faces a ‘Good Sweating.’ Some Aren’t Fit

Brookfield Invests $1.1 Billion Into Green Fuel Maker Infinium

It’s the Airplane of the Future. It’s Still Grounded

Southwest Airlines Chairman to Step Down Amid Elliott Battle

BMW Cuts Guidance After Faulty Brake Systems Prompt Recall

Jorge Ramos to Leave Univision After 40 Years at the Network

Hedge Fund Pushes for End of Murdochs’ Control at News Corp

U.K. Competition Watchdog to Probe Carlsberg’s Acquisition of Britvic

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