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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Morning News: September 9, 2024
Posted by Eddy Elfenbein on September 9th, 2024 at 7:07 am

Kenya Struggles to Stabilize Public Finances After Tax Protests

China’s Deflationary Spiral Is Now Entering Dangerous New Stage

Europe’s ‘Reason for Being’ at Risk as Competitiveness Wanes, Report Warns

Draghi Says EU Itself at Risk Without More Funds and Joint Debt

The Bond Market Rally Rides on How Fast the Fed Cuts Rates

Jobs Don’t Justify a Half-Point Cut. Will Inflation?

Stock-Selloff Fears for September Are Overblown

Biden and Trump Are Both Eyeing a Sovereign-Wealth Fund. Why?

More Cash for Kids Is Popular. It Might Not Be Wise.

How Americans Voted Their Way Into a Housing Crisis

Americans Face Credit Hit as Student Debt Goes Delinquent Again

Are Greedy Companies to Blame for Grocery Inflation? We Looked at the Data

B. Riley in Talks to Sell Majority Stake in Great American Group

PayPal Teams Up With Shopify in CEO’s Latest Partnership Deal

How Trump Could Turn a $400 Billion Green Bank Into a Fossil Fuel Lender

The Texas Billionaire Who Has Greenpeace USA on the Verge of Bankruptcy

China’s EV, Hybrid Sales Maintain Momentum

U.S. Prepares to Challenge Google’s Online Ad Dominance

How Apple Rules the World

Japan’s Rapidus Seeks Another $700 Million in Chipmaking Push

Boeing Reaches Tentative Deal With Workers to Avert Strike

Starbucks’ New CEO Made Shares Soar. Now He Has to Prove His Worth

Big Lots Files for Bankruptcy, Agrees Sale to Nexus Capital

Greed, Gluttony and the Crackup of Red Lobster

The Palace Coup at the Magic Kingdom

Ubisoft Shares Slump After Investor Urges Assassin’s Creed Maker to Go Private

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Morning News: September 6, 2024
Posted by Eddy Elfenbein on September 6th, 2024 at 7:02 am

Seven & I Reply to Couche-Tard Shows Japan’s M&A Era Has Arrived

U.S. Blowback to Steel Merger Vexes Japan

Japan Tries to Reclaim Its Clout as a Global Tech Leader

China’s $100 Billion Short Against Dollar Enriches Hedge Funds

Russian Court Freezes Raiffeisen Shares in Local Bank, Blocking Sale

Eurozone Economy Weaker Than Previously Estimated as ECB Prepares to Meet

ECB’s Lagarde Set to Skip Budapest Ecofin, Only Attend Eurogroup

German Recession Fears Mount as Industry Slump Endures

Warren Buffett’s Haul From Bank of America Stock Sales Nears $7 Billion

Investor Dash to Cash Continues Ahead of Fed Rate Cut, BofA Says

The Yield Curve Is Disinverting. Why Should I Care?

US Jobs Report May Show Hiring Bounce, Decide Size of Fed Cut

The Downside of Falling Interest Rates

US Bonds Climb as Traders Look to Jobs Data to Back Big Fed Cuts

Breaking Down Trumponomics 2.0

America Has a Gender and Racial Pay Gap That Just Won’t Go Away

Federal Judge Temporarily Blocks Another Pillar of Biden’s Student Debt Plan

Voters Love No Tax on Tips, But Split Over $25,000 Housing Help

Australia Gave People a Right to Log Off, and Bosses Are Unhappy

Companies Finally Find a Use for Virtual Reality at Work

Yondr Finds Business Success in School Phone Bans

A.I. Isn’t Magic, but Can It Be ‘Agentic’?

Larry Ellison Will Control Paramount After Merger

Americans Eat 42 Pounds of Cheese a Year. $4 Billion Says They Want More

The 35-Year-Old CEO Plotting Red Lobster’s Comeback

Jean Paul Gaultier Owner Puig Shares Drop After Warning on China Challenges

On N.B.A. Player Podcasts, There’s the Star and Then the Other Guy

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Morning News: September 5, 2024
Posted by Eddy Elfenbein on September 5th, 2024 at 7:05 am

China’s Central Bank Sees Room to Lower Banks’ Reserve-Requirement Ratio

BOJ Board Member Takata Sees Need to ‘Shift Gears’

Meloni Officials Aim for Italy Deficit Below 3% Within Two Years

Leaked Reports and Political Heat Are Testing Trust in Economic Data

Investor Bets Shift as Dollar Weakens with Looming Fed Rate Cuts

Goldman Sachs Issues Huge Fed Crash Warning As A Legendary Trader Suddenly Flips His Bitcoin Price Prediction

Why This Jobs Report Could Be the Most Pivotal One in Years

The Hot Labor Market Has Melted Away. Just Ask New College Grads

Private Equity’s Favorite Borrowing Tool Sparks Fresh Scrutiny

Jane Street and Citadel Won’t Devour All of Wall Street’s Revenue

Affirm to Profit Soon From Buy Now, Pay Later

Tax Policy Becomes a Fault Line for Harris

Howard Lutnick Emerges as Trump’s No. 1 Salesman on Wall Street

Ex-Discover Star Sues Over Pay Clawback Before $35 Billion Deal

Verizon to Buy Frontier for $9.6 Billion in Broadband Push

UK May Allow Amazon’s Starlink Rival to Offer Broadband Services

Blackstone Deal Unlocks $670 Million Fortune for AirTrunk Founder

As Crackdown Deepens in Venezuela, Chevron Says Keep the Oil Flowing

Delaying Oil Output Return Won’t Fix OPEC+ Problems

Nippon Steel Left Hunting Next Step as US Takeover Flounders

Electric Vehicles No Longer Need Subsidies, Indian Minister Says

NIO’s Second-Quarter Net Loss Narrowed on Sales Boost

Why Public EV Chargers Almost Never Work as Fast as Promised

Cures for Rare Diseases Now Exist. Employers Don’t Want to Pay

Investor Who Risked It All on ‘Wukong’ Scores Another Sales Win

Billionaire Sports Family Revels in Wall Street Money, World Cup and Taylor Swift

NFL Invades Soccer-Crazed Brazil in Push to Go Global

Leaked Disney Data Reveals Financial and Strategy Secrets

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Morning News: September 4, 2024
Posted by Eddy Elfenbein on September 4th, 2024 at 7:03 am

Oil Prices Fall Below $70 a Barrel. OPEC+ and Libya Expected to Increase Output

Climate Losses Batter Insurers While Reinsurers Step Back

Japan’s Era of ‘Free’ Mortgages Is Coming to an End

Glynn’s Take: Australian Consumers May Be Down, But Not Out

High Rates Expose Global Banking’s Multi-Trillion-Dollar Weak Spot

China Weighs Cutting Mortgage Rates in Two Steps to Shield Banks

Bank of France Chief Sketches Out Path to Budget Credibility

Bond Volatility in US Eclipses Europe as Recession Angst Rises

US Jobs Data Will Decide the Size of Fed’s Rate Cuts

Credit-Rating Providers Settle With SEC Over Off-Channel Communication Violations

September Gets Started With Déjà Vu From August

Traders Weigh ‘Buy the Dip’ Opportunities Amid Stocks Selloff

Nvidia’s Huang Loses $10 Billion in His Biggest Wealth Wipeout

Intel’s Money Woes Throw Biden Team’s Chip Strategy Into Turmoil

Hewlett Packard to Pursue $4 Billion Claim Against Mike Lynch’s Estate

Blackstone to Buy Australia’s AirTrunk in A$24 Billion Deal

Temu’s Parent, a Victim of Competition or Its Own Success?

U.S. Steel Warns of Plant Closings if Sale Collapses

How Immigration Remade the U.S. Labor Force

US Port Talks Kick Off in Bid to Avoid Economy-Disrupting Strike

For Volkswagen, the Bumpy Road to Electric Vehicles Starts to Hit Home

VW Defends Plan to Shut German Factories With Plunging Sales

GoTo Exits Tough Vietnam Market to Focus on Reaching Profit

NYC’s Biggest Taxi Insurer Is Insolvent, Risking Transit Meltdown

Cargill, America’s Largest Private Company, Faces Leaner Times

Walmart Bets on Collectible Sneakers to Grow Marketplace Service

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CWS Market Review – September 3, 2024
Posted by Eddy Elfenbein on September 3rd, 2024 at 6:05 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 expectation of an event creates a much deeper impression on the exchange than the event itself.” – Jose de la Vega, 1688

On Friday, the S&P 500 closed out August with a gain of 1.01%. It’s interesting that last month turned out to be a decent month for the market. For a while, it didn’t look that way.

From July 16 until August 5, the stock market had a minor dustup. Of course, we didn’t know it was going to be minor at the time.

What I find interesting is that if you had only paid attention to the stock market’s monthly closing price, you would have had no idea that at one point, the stock market dropped more than 8% this summer.

Ignoring the sound and fury of the daily market not only makes you a better investor, but it also gives you a better sense of what the market is really doing.

The recent monthly data has been entirely uninteresting. For August, the S&P 500 gained 2.28%. This was the index’s fourth monthly gain in a row, and its ninth gain in the last ten months.

This has been a very good time for individual investors. JPMorgan said that stocks currently make up 42% of Americans’ total financial assets. That’s the highest on record since 1952. Fidelity said that the number of its 401k accounts worth more than $1 million is up 31% in the last year.

Will the good times last?

It’s true that historically, Labor Day has marked a change in sentiment on Wall Street. Traditionally, September and October have been weak months for the stock market. We’ve even had some of our worst markets in history come at this time of year. I’m not sure why. Perhaps traders are eager to take profits after a strong summer rally.

This year, it didn’t take long for September to get off to a slow start. The market had a lousy day today. The Dow was off more than 6000 points, and the Nasdaq was down over 3%.

Today’s trading is also a good example of how Nvidia has come to dominate the entire market. The tech giant opened lower, and it pulled nearly the entire tech sector with it. At its low, NVDA was down more than 7.5% today.

It seems like every day, NVDA calls the tune. If it rallies, a mass of growth stocks rallies in its wake. But on a bad day, like today, NVDA is one of the worst performers in the S&P 100, and many others will get pulled under, too. The market is the east and Nvidia is the sun.

Over the last four trading sessions, shares of NVDA have lost roughly one-sixth of their value. That’s half a trillion dollars. For today, I suspect it was a case of some NVDA longs looking for a good chance to book some very nice gains.

This was an unusual trading day because outside tech, most defensive stocks had a quiet day. In fact, many defensive stocks posted decent gains today and more than a few, like Walmart, Coca-Cola and Stryker, made new 52-week highs today.

The S&P 500 High Beta Index was down over 4.2% today while the S&P 500 Low Vol Index was up 0.04%. The Nasdaq lost almost as many points as the Dow did today, despite having less than half the nominal point value.

There’s not much news from Wall Street at the moment, but that will change soon. This Friday, we’ll get the jobs report for August. In the July report, the unemployment rate reached a 33-month high.

After the jobs report, we’ll get the CPI report for August the following Wednesday, which is the 11th. To be fair, the inflation numbers have improved but at a very slow rate.

We’re now two weeks away from Rate Cut Day. This day has been three years in the making. This is when the Federal Reserve will finally lower interest rates.

There’s little doubt that the Fed will cut rates. The only question is, by how much? Going by prices in the futures pits, traders think there’s a 63% chance of a 0.25% and a 37% chance of a 0.50% cut. The odds of the Fed doing nothing are at 0%. I’m not exaggerating.

We still have data coming in. On Friday, the Commerce Department said that the personal consumption expenditure price index, or PCE, rose by 0.2% last month which matched expectations. This is important because it’s the Federal Reserve’s preferred measure of inflation. Over the last year, the PCE Index has increased by 2.5%.

The core PCE, which doesn’t include food or energy prices, was also up by 0.2% last month, and also matched expectations. Over the past year, the core PCE is up 2.6% (see above).

Core prices less housing, another key metric for the Fed, increased just 0.1% on the month. As other inflation components ease, shelter has proven to be stubborn, again rising 0.4% in July, according to Friday’s report.

Elsewhere in the report, the department’s Bureau of Economic Analysis said personal income increased 0.3%, slightly higher than the 0.2% estimate, while consumer spending rose 0.5%, in line with the forecast. Spending continued at a solid clip even though the personal savings rate fell to 2.9%, the lowest since June 2022.

From a component standpoint, inflation changed little over the past month. The BEA said that goods prices fell by less than 0.1% though services increased 0.2%.

On a 12-month basis, goods also were off by less than 0.1%, while services jumped 3.7%. Food prices were up 1.4% and energy accelerated 1.9%.

One weak spot today was the ISM Manufacturing report. I tend to favor the ISM report for a few reasons. One is that it’s a survey, so it’s not specifically placed on economic activity. I also like that the report comes early, usually on the first business day of the month. So much econ data is lagging.

The ISM also tends to line up well with recessions. Whenever the ISM Manufacturing Index dips below 45, then there’s a good chance that we’re in a recession.

This morning, we learned that the ISM for August came in at 47.2. Any number below 50 indicates that the economy is contracting; above 50 and the economy is expanding. Today’s report was below expectations which were for 47.9. The ISM for July was 46.8.

The weak July report, which came out in early August, helped cause the market to have a minor downdraft this summer. We’ve recovered most of what we lost, but not all of it.

Stock Focus: Winmark (WINA)

This week, I wanted to tell you about a fascinating small-cap company called Winmark Corp. (WINA). It has a market value of $1.25 billion and it’s only followed by one analyst on Wall Street.

I’m not recommending it, but it’s an interesting company to put on your radar screen. The company franchises five different types of retail stores: Style Encore, Plato’s Closet, Once Upon a Child, Play It Again Sports and Music Go Round.

While the stores are different, they share a common theme: they buy and sell slightly-used merchandise. Winmark also provides leasing for its business partners.

Since March 2000, the stock is up more than 13,000%.

Because of the company’s unusual structure, they do about $80 million in sales despite having about 85 full-time employees.

From 2000 to 2016, Winmark was led by John Morgan, who turned the ship around. It’s difficult to describe Winmark. I suppose it’s like what eBay would be if they had stores.

WINA looks rather pricey at the moment but it’s worth following.

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

– Eddy

Morning News: September 3, 2024
Posted by Eddy Elfenbein on September 3rd, 2024 at 7:07 am

New Argentine Currency Launched to Offset Milei’s Shock Therapy

Why It’s So Hard for China to Fix Its Ailing Economy

China Policy Outlook Hinges on the Definition of ‘About’

Russia’s Sberbank Says India Business Booming Despite Western Sanctions

Japan Bank Shares Rise as 10-Year JGB Yield Hits Nearly One-Month High

Wall Street Strategists Face Their Own Short Squeeze

Gold Is Rising Because of Demand for ‘Fallback Money’

Americans Are Really, Really Bullish on Stocks

Moody’s Upgrades Outlook on Global Reinsurers to Positive from Stable

Citadel Securities, Jane Street on Track for Record Revenue Haul

The New Rules of Debt Are Totally Cutthroat

Rise of the Pint-Size Startup Is Reshaping the U.S. Economy

Can Democrats Stop the ‘Tax Doom Loop’?

Claudia Sahm: The Jobs Numbers Went Down, But Trust in Them Shouldn’t

Delivery Hero Lines Up Banks for Talabat’s Dubai Listing

When Property Investors Want Out, These Bargain Hunters Rush In

This Once Hot Real-Estate Type Is Now Being Offered as Office Space

Shutting Off Elon Musk Won’t Help Brazil’s Democracy

Shorts Are Circling Some of the AI Boom’s Biggest Question Marks

China Needs More Factory Robots. Can It Build Its Own?

VW Turns on Germany as China Targets Europe’s EV Blunders

Uber Smells Opportunity in South Korean Internet Upheaval

Korea to Impose Stricter Emissions Trading Rules to Boost Prices

Kamala Harris Says U.S. Steel Should Stay American-Owned

Ryanair, Wizz Air August Passenger Numbers Reach New Records

The Day Delta’s ‘On-Time Machine’ Broke, and the Blame Game It Sparked

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Morning News: September 2, 2024
Posted by Eddy Elfenbein on September 2nd, 2024 at 7:09 am

China-Philippines Row Opens New Flashpoint in South China Sea

China Warns Japan of Retaliation for Possible New Chip Curbs

China’s Bulging Commodity Stockpiles Show Depth of Economic Woes

Asia Manufacturing PMIs Show Some Weak Spots But Keep Signaling Growth

Leveraged Finance More Than Doubles in Europe Despite ECB Probe

Swiss Franc Carry Trade Comes Fraught with Safe-Haven Rally Risk

Markets’ Summer Vacation Is Over

Treacherous September Is Leaving Traders Everywhere on Edge

Emerging Stocks Drop as Traders Watch China’s Economy, US Data

Hedge Funds Bet Against Banks, Insurance and Property, Says Goldman Sachs

Silicon Valley Bank Exits China Joint Venture, Local Partner Takes Full Control

Blackstone Is Said to Near $13 Billion Deal to Acquire AirTrunk

Nvidia CEO Jensen Huang Surprised by Skeptics

China EV Sales Rise on Government Subsidies, Inventory Buildup

Car Carriers With Greener Ships Face Higher Costs

About 10,000 Hotel Workers Walk Off the Job on Labor Day Weekend

Has the Spread of Tipping Reached Its Limit? Don’t Count on It.

A Funnel Cake Macchiato, Anyone? The Coffee Wars Are Heating Up.

Bayer Kidney Drug Helps Treat Common Form of Heart Failure

News Corp’s REA Mulls Offer for Rightmove

Musk’s Starlink Defies Order to Block X in Brazil

Mark Cuban Says Elon Musk’s ‘Biggest Power Play’ on X Is Letting Users Think They Have Free Speech

ESPN and ABC Go Dark on DirecTV in Feud With Disney

Netflix Is Trying to Get You Hooked on More Reality TV With Better Dubbing

$13 for a Video Call. $25 for a Movie. Tablets Connect Prisoners—at a Steep Price.

America’s Cup: The Billionaire’s Trophy Where $135 Million Disappears in Days

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Morning News: August 30, 2024
Posted by Eddy Elfenbein on August 30th, 2024 at 7:03 am

How Japan Ignored Climate Critics and Built a Global Gas Empire

Longi Reports Massive First-Half Loss After Solar Prices Crater

Climate Change Means Coffee’s Future May Depend on Niche Growers

Silicon Valley Wants to Fight Fires With Fire

Vanke Reports First Half-Year Loss in More Than Two Decades

China Considers Allowing Refinancing on $5.4 Trillion in Mortgages

ICBC’s Profit Slips as Low Rates Weigh

Russia Payment Hurdles with China Partners Intensified in August

Eurozone Inflation Closes in on ECB Target

US Stock Futures Gain as Rate-Cut View Mounts

Harris and Trump Have Housing Plans. Economists Have Doubts.

Why Interest Rate Cuts Won’t Fix a Global Housing Affordability Crisis

Swap Bonds for Commodities in 60/40 Funds, BofA Strategists Say

Money-Market Funds Attract 2024’s Biggest Monthly Cash Inflow

The Report Card on Guaranteed Income Is Still Incomplete

For More Americans, One Job Isn’t Enough

Singapore Proposes New Law That Lets Police Stop Bank Transfers

Intel Weighs Options Including Foundry Split to Stem Losses

Nokia Shares Slip After Company Denies Mobile-Network Business Sale Talks

Adani Ports Acquires Offshore Shipping Firm for $185 Million

Threat of Strike This Fall Hangs Over U.S. Ports

Budget Airlines Want to Go Premium. That’s Easier Said Than Done.

Dollar General Scales Back Guidance After Quarterly Results Fall Short of Target

The Doctor-Turned-CEO Aiming to Beat Obesity — and Ozempic

Why the NFL Let Private Equity Get Into the Game

YouTube Stars Want Some Respect

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Morning News: August 29, 2024
Posted by Eddy Elfenbein on August 29th, 2024 at 7:03 am

Why Ethiopia’s Bid for Red Sea Access Angers Somalia

China Oil Majors Paint Bleak Picture for Demand in Top Importer

Risks to US Job Market Start to Emerge in Regional Fed Surveys

King Dollar’s Softening Is Good News for Nearly Everyone

Most-Hated Credit Trade Turns Into a Big Winner for Hedge Funds

Warren Buffett’s Berkshire Hathaway Hits $1 Trillion in Market Value

Star Fund Manager’s Free Rein at Wamco Backfired for Franklin

‘Nvidia Day’ Inspires Watch Parties and Memes, but the Fanfare Doesn’t Last

When 50% Margins No Longer Impress, You’re Nvidia

Nvidia Tumbles After Disappointing Forecast, Blackwell Chip Snags

Telegram Founder Charged With Wide Range of Crimes in France

Can China Tech Find a Home in Silicon Valley?

ASML’s China Chip Business Faces New Curbs From Netherlands

US Snowboard Champ Pitches Green Shipping for Maersk

Lithium Startups Bet on High Demand in Battery-Powered Future

Polestar Posts $242 Million Loss Amid EV Demand Slowdown

How America Can Break Its Highway Addiction

Mars’ $36 Billion Deal Faces Tough Review by Lina Khan’s FTC

Dollar General Plunges as Core Customers Feel Budget Crunch

At Costco, Shopping for Clues About Consumers

Australian Winemaker to Benefit as China Uncorks Imports

Absolut Vodka Maker Pernod Ricard Expects Challenges in U.S., China to Persist

Private Equity Is Coming for Youth Sports

Asics to Exit Baseball Business to Focus on Cult Hit Sneakers

Birkenstock Hits Its Stride After Stumbling Earlier in the Year

He Raised Disney Park Prices—and Fans Still Love Him. Now He’s on the CEO Shortlist

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