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Salesforce (CRM 144.91, -15.35, -9.6%): weakest performer in the sector, fell back below its 50-day moving average (151.74) to a level not seen in three weeks before narrowing its loss.
Micron (MU 55.81, -1.85, -3.2%): falling back to its 50-day moving average (54.99).
Lam Research (LRCX 462.68, -9.70, -2.1%): falling back below its 200-day moving average (461.11).
Applied Materials (AMAT 107.44, -2.16, -2.0%): falling back to its 200-day moving average (105.11).
Texas Instruments (TXN 177.65, -2.81, -1.6%): falling toward the midpoint of yesterday's range.
KLA Corp (KLAC 389.18, -3.97, -1.0%): inched to its best level since early August before turning negative.
Microsoft (MSFT 253.62, -1.52, -0.6%): hit its best level since mid-September before turning negative.
AMD (AMD 77.40, -0.24, -0.3%): hit its best level since mid-September before turning negative.
Apple (AAPL 148.10, +0.08, +0.1%): slipping back toward its 50-day moving average (145.83).
Wednesday Breaks Netflix Record With 341M Hours Viewed In Debut Week
Fed funds futures have rallied
Fed funds futures have rallied on the back of Chair Powell's comments that solidified expectations for a step down to a 50 bps hike in two weeks. And implied rates have dipped further after today's data reflecting weakening in oiverall economic activity, as well as some softening in the labor market and easing in price pressures. In fact, implied rates have slide to below 5% with the May contract now suggesting a 4.913% terminal rate, down from 5.2% after the September jobs report.
Personal income increased 0.7% month-over-month in October (Briefing.com consensus 0.4%) following a 0.3% increase in September. Personal spending jumped 0.8% (Briefing.com consensus 0.8%) following a 0.6% increase in September.
The PCE Price Index was up 0.3% month-over-month (Briefing.com consensus 0.4%) and the core-PCE Price Index, which excludes food and energy, increased 0.2% (Briefing.com consensus 0.2%). On a year-over-year basis, the PCE Price Index was up 6.0%, versus 6.3% in September, and the core-PCE Price Index was up 5.0%, versus 5.2% in September.
The key takeaway from the report was the improvement in the inflation readings, particularly the core-PCE Price Index given Fed Chair Powell's emphasis that the Fed's policy tools are better designed for working on core inflation.
Real personal spending was up 0.5% month-over-month and up 1.8% year-over-year (versus up 2.0% in September). Real disposable personal income was up 0.4% month-over-month and down 3.0% year-over-year (versus down 3.4% in September).
Wages and salaries were up 0.5% month-over-month following a 0.6% increase in September.
Proprietors' income was flat month-over-month following a 0.3% increase in September.
Rental income was up 0.3% month-over-month after increasing 0.3% in September.
Personal current transfer receipts increased 1.6% month-over-month after being unchanged in September.
The personal savings rate as a percentage of disposable income was 2.3%, down from 2.4% in September.
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Oct PCE Core Price Index +0.2% Rate On Mo; +5% On Yr
Oct PCE Price Index +0.3% Rate On Mo; +6% On Yr
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Wells Fargo upgraded Lennox (LII) to Overweight from Equal Weight with a price target of $300, up from $238. The firm believes earnings resilience in a residential HVAC slowdown and a path to best-in-class margins can restore the historical relative valuation premium and drive Lennox outperformance.
Barclays upgraded Pentair (PNR) to Overweight from Equal Weight with a price target of $55, up from $48. The firm continues to have a neutral view on U.S. multi-industry stocks into 2023, although the firm is more optimistic than many investors. The firm favors stocks exposed to U.S. residential construction, companies offering value from portfolio change and beneficiaries of easing supply chains. The firm believes Pentair will benefit from easing supply chains and says the stock is among the firm's key picks for residential exposure.
Downgrades
Wolfe Research downgraded Vontier (VNT) to Peer Perform from Outperform without a price target. The firm notes Vontier is too cheap with the bear case arguably priced in, and the firm struggles to see credible catalysts for multiple expansion.
Morgan Stanley downgraded Synchrony Financial (SYF) to Underweight from Equal Weight with a price target of $29, down from $31. The firm is cautious on the consumer finance sector heading into 2023. The firm expects higher credit losses, driven by a consumer cash flow squeeze from high inflation, rising unemployment and less excess savings. With 22% of loans out to the bottom 40% of income earners, the firm notes consumer loan delinquencies and net charge-offs will accelerate over the coming quarters.
Exane BNP Paribas downgraded Pearson (PSO) to Neutral from Outperform. The says the stock's elevated valuation multiple does not reflect expectations of increasing cost inflation and operating margin pressure in 2023.
Others
Citi resumed coverage of ADT Inc. (ADT) with a Buy rating and $11 price target. The firm notes ADT's new partnership with State Farm, including exposure to the brand's 14M customers, seems highly logical to us given the opportunity for cross selling. The firm also thinks State Farm's equity investment/ tender process alleviates a degree of PE overhang for ADT.
Goldman initiated coverage of Aclaris Therapeutics (ACRS) with a Buy rating and $25 price target, which represents 64% upside potential. The firm has a positive view on the clinical outlook for the company's lead drug, zunsemetinib, ahead of proof-of-concept data in rheumatoid arthritis expected in 2023. The firm also anticipates initial clinical data from Phase 2a studies of zunsemetinib in potential expansion indications in the first half of 2023 to begin to prove out the drug's pipeline-in-a-product potential.
JP Morgan initiated coverage of Sapiens (SPNS) with an Underweight rating and $20 price target. The firm notes the company has an uneventful outlook for revenue growth and the stock deserves to trade at a discount to peers given its revenue mix. The firm also flags currency headwinds from Sapiens' non- U.S. exposure and low stock liquidity.
Enviva (EVA) and GreenTrees announce a nine-year partnership agreement that will contribute towards Enviva's net-zero goals for its Scope 1 carbon footprint, equating to approximately 10,000 metric tons of carbon removal credits annually, or 90,000 metric tons throughout the duration of the contract.
Akili (AKLI) announces the appointment of Scott Kollins, Ph.D., as chief medical officer, effective December 1, 2022. Dr. Kollins will report to Akili's chief operating officer and join the company's executive team.
AbCellera (ABCL) and Rallybio Corporation (RLYB) have entered into a strategic alliance to discover, develop, and commercialize novel antibody-based therapeutics for rare diseases. This multi-year, multi-target collaboration will combine AbCellera's antibody discovery engine with Rallybio's clinical and commercial expertise in rare diseases to identify optimal clinical candidates and ultimately deliver therapies to patients.
UiPath (PATH) and Orica announce a global partnership to scale Orica's application testing and automation capabilities to drive enterprise-wide process efficiencies. Under this new partnership, UiPath will also be recognized as Orica's Technology Partner of choice for Application Testing and Enterprise Automation.
BYND Cannasoft Enterprises (BCAN) announces the filing of a patent application for its EZ-G device to include an innovative double-faceted condom design. The double-faceted condom is designed to help treat various problems related to intimate relationships while making the sexual experience much more pleasurable for everyone
Volatility predicted, and volatility there was. A speech from Fed Chair Jay Powell on Wednesday sent markets flying amid signals that the central bank could begin slowing its aggressive interest rate increases. When the dust settled at the end of the session, the Nasdaq Composite (COMP.IND) closed up a whopping 4.4%, while the S&P 500 (SP500) and the Dow (DJI) finished the day ahead by 3.1% and 2.2%, respectively.
Snapshot: While Powell warned that the Fed might have to retain restrictive policy for some time - as policymakers needed to see "substantially more evidence" of falling inflation - he buoyed markets with a less-hawkish stance on the pace of interest hikes and by raising hopes that a soft landing was "very plausible." "It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting," the Fed chief said in prepared remarks for an event hosted by The Brookings Institution.
"Despite some promising developments, we have a long way to go in restoring price stability," Powell continued. "My colleagues and I do not want to overtighten because... cutting rates is not something we want to do soon. The truth is that the path ahead for inflation remains highly uncertain. That's why we’re slowing down and going to try to find our way to what that right level is. It can't be that we can go on for five years at a very high level of inflation and that it doesn’t work its way into the wage and price setting process pretty quickly. That's a serious concern."
Getting technical: Wednesday's move resulted in the Dow Jones Industrial Average rising more than 20% since Sept. 30 - its lowest point of the year - meaning it is now officially in bull market territory. Elsewhere, the benchmark S&P 500 is up 17% from its YTD low, and while tech-heavy Nasdaq still has some ways to go, it has rebounded nearly 14%. (104 comments)
Meet Semi
It has been quite a long wait, but Tesla's (NASDAQ:TSLA) electric Semi truck is about to see the light of day. The company first unveiled a concept of the Class 8 tractor in late 2017, with output expected to commence in 2019, but since then the production version has been delayed several times. Today's event at Giga Nevada, where the Semi will be produced, will see the first electric truck delivered to Pepsi (NASDAQ:PEP), which will use the vehicles at Frito-Lay plants and beverage facilities in California.
Specs: Not too many details have been revealed over the past several years, but the Semi is expected to achieve an efficiency of less than 2 kWh per mile, and have a range of approximately 300 or 500 miles. Remaining to be seen are production targets and configurations, as well as its battery charging capabilities, software, displays and cockpit design. Other big name companies that have put down a deposit for the tractor include Anheuser-Busch (BUD), FedEx (NYSE:FDX), UPS (NYSE:UPS) and Walmart (NYSE:WMT).
When first unveiled in 2017, the 500-mile-range version of the Semi started at $180,000. While the price tag is likely a lot higher today, as an all-electric Class 8 truck, it would qualify for a tax break of up to $40K under the Inflation Reduction Act. Should the Tesla Semi be everything the company says it is, the vehicle could revolutionize the freight transport industry, with its cost savings on diesel fuel and a smaller carbon footprint.
The competition: Other rivals are already getting in on the game, with long-haul cargo truck makers like Daimler (OTCPK:DTGHF) releasing an electric rig. Volvo-owned (OTCPK:VOLVF) Renault Trucks even trolled Tesla in early October, with the release of its "E-Tech D" truck that was delivered to Coca-Cola (NYSE:KO). While the two models aren't exact competitors, Renault followed up by tweeting a video teaser, "Some talk the talk. Some walk the walk. Ain't that right, @elonmusk?" (10 comments)
Taylor out
After climbing 5.7% during the regular session on Wednesday, Salesforce (CRM) shares gave back all of their gains, and then some, after plunging 6.9% AH. Third-quarter earnings and sales topped expectations, but traders were looking at another development that could shake things up at the cloud business software company. Co-Chief Executive Bret Taylor will leave the firm on Jan. 31, with founder Marc Benioff taking over as Salesforce's sole CEO at that time.
Quote: "While there’s absolutely no easy time for a transition like this, I do now feel like it’s time to return to my entrepreneurial roots particularly given the landscape and economy going through such shifts," Taylor declared, without giving details about his plans following the departure. It's the second time that the co-CEO structure didn't last long at Salesforce, with Keith Block ditching the role after 18 months back in 2018.
Benioff called Taylor's leaving Salesforce "bittersweet", but that it was "understandable" why he would want to move on. "Bret founded two incredible companies [prior to joining Salesforce]. I’m excited to see his next chapter unfold," he added. "[Bret] made his mark on Salesforce as an incredible technologist, leader and friend to us all."
Career highlights: Taylor co-created Google Maps in 2005, and later founded social network FriendFeed, which was acquired by Facebook for an estimated $50M and led it to adopt the app's game-changing "Like" button. Taylor went on to become CTO at Facebook, but left to found Google Docs competitor Quip, which was bought by Salesforce in 2016. As he worked his way up the Salesforce ranks, he subsequently became a board member and then chairman at Twitter, until the purchase of the company by Elon Musk in October. He is also credited as the architect of Salesforce's $27.7B purchase of Slack Technologies, which was its largest acquisition ever. (10 comments)
2022 DealBook Summit
Some of the biggest names in business are being interviewed at the annual New York Times DealBook Summit, where "every topic is fair game, and no question is out of bounds." Amazon (NASDAQ:AMZN) CEO Andy Jassy was the latest to take the stage and go under the spotlight, providing some important insights into the company and the overall economy. Not only is Amazon one of the biggest employers in the country, but it can easily size up trends taking place across the retail space, while Amazon Web Services (responsible for the bulk of the company's profits) supports nearly a third of all cloud businesses.
Economic environment: "It's very clear that consumers are spending, but they are being very careful on trying to stretch their dollars. People care a lot about getting a bargain right now. They were attracted to stocking stuffers in an even more pervasive way than normal. In discretionary categories like computers, electronics or TVs, you see consumers trading down models just to try and get more for their money. In difficult and uncertain economies, we've found over time that consumers are very careful about who they partner with and they go with companies that are going to provide a great customer experience."
Layoffs: "It's the time of year that our leaders take a look at where they want to spend resources and where they should adjust. This year we had the lens of a very uncertain economic environment, as well as having hired very aggressively over the last several years. I think as we went through our plans, you just started seeing pretty similar trends, that the economy was more uncertain and things that were different than before, and we just felt that we needed to streamline our costs. One of the first things we did was to pause incremental hiring, but as we went through the plans, we realized we needed to be more slim on our resources."
Organized labor: "This is one of many topics in this country that is very hard to discuss and debate. The truth is, employees get to choose. It's not up to us, it is up to them. What we tell employees in our fulfillment centers is that we think they are better off without a union for a few reasons. If employees can make the experience better for customers or their fellow teammates - they can go fix it rather than a bureaucratic and slow [process]. We like to hear from all our employees, as opposed to being filtered through one or two voices, and it also champions an 'us vs. them' mentality that is not as productive. We have compelling benefits like a $19 minimum wage, full health insurance, 401k, up to 20 weeks of parental leave and a career choice program for an advanced education. In the U.S., only one of our facilities voted for a union in Staten Island. There were a lot of irregularities in that vote and it's working its way through the legal process."
Media: "Our Prime Video offering and all of that content is a really important ingredient when people choose to sign up for Prime or not. It's always something that has driven Prime subscriptions, but increasingly you are seeing more and more people signing up to Prime because of the video content. That's very attractive, and even when they sign up to Prime for the video content, they tend to spend money with us in our e-commerce offerings. I do think over time, we do have opportunities to make our Prime Video business a standalone business. What we want to do is provide the world with the best selection of streaming content for customers."
Today's Markets
In Asia, Japan +0.9%. Hong Kong +0.8%. China +0.5%. India +0.3%.
In Europe, at midday, London +0.1%. Paris flat. Frankfurt +0.6%.
Futures at 6:30, Dow -0.2%. S&P -0.1%. Nasdaq -0.3%. Crude +0.6% to $81.03. Gold +1.8% to $1791.60. Bitcoin +1.2% to $17,085.
Ten-year Treasury Yield -10 bps to 3.60%
Today's Economic Calendar
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Personal Income and Outlays
9:25 Fed's Logan Speech
9:30 Fed's Bowman Speech
9:45 PMI Manufacturing Index
10:00 Fed's Kashkari Speech
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:30 EIA Natural Gas Inventory
3:00 PM Fed's Barr Speech
4:30 PM Fed Balance Sheet
Companies reporting earnings today »
What else is happening...
All good? Tim Cook gives Elon Musk a tour of Apple's (AAPL) HQ.
Taiwan Semiconductor (TSM) to build 4nm chips at new Arizona plant.
CNN (WBD) begins layoffs expected to reach hundreds of staffers.
Okta (OKTA) surges as Q3 results, forecast blow away expectations.
Snowflake (SNOW) slips as guidance, revenue shows slowing growth.
U.S. House passes bill by wide margin to avoid a rail strike.
HPE recently held takeover talks with Nutanix (NTNX) - Bloomberg.
GSK is a potential buyout candidate for Novartis (NVS) - Intron Health.
BigCommerce announces record Cyber Week with GMV up 32%
BigCommerce reported its merchants experienced another year of record sales during Cyber Week, hitting a 32% increase in gross merchandise value, or GMV, over 2021 and exceeding what has been an overall successful five days for the retail industry. In addition to the increase in GMV, shoppers were more active from Thanksgiving to Cyber Monday this year with total orders up 25%. As expected Black Friday and Cyber Monday saw the biggest sales volumes for BigCommerce merchants during the five-day period with Cyber Monday GMV growing just over 32% compared to the same day last year. Black Friday GMV was up 31% over 2021.
OKTA +16.7%, FIVE +9.4%, PVH +8.7% (also extends license agreements with GIII), SNPS +8.1%, SPLK +7.8%, NTNX +4.4%, KR +3.3%, TGLS +3.2% (guidance), PSTG +2.8%, NCNO +2.2% (also Bank of New Zealand selects nCino Bank Operating System), TD +2.1%
Other news:
ARCE +13.4% (receives Non-Binding Going Private Proposal for $11.00 per share in cash)
OFIX +7.4% (receives competing takeover bid from private equity)
CTXR +6.8% (receives FDA acceptance for BLA of denileukin diftitox)
RGR +5.6% (declares special dividend of $5.00/sh)
ONCY +5.1% (receives FDA Fast Track designation for the treatment of advanced/metastatic pancreatic cancer)
RLYB +4.9% (Rallybio and AbCellera (ABCL) announce strategic alliance to discover develop and commercialize novel antibody-based therapeutics for rare diseases)
AUPH +2.3% (UK grants Great Britain marketing authorization of LUPKYNIS)
INVA +2.1% (FDA accepts Priority Review of NDA for Sulbactam-Durlobactam)
AJRD +1.9% (awarded a $240 mln contract modification from Missile Defense Agency)
ABCL +1.6% (Rallybio and AbCellera (ABCL) announce strategic alliance to discover develop and commercialize novel antibody-based therapeutics for rare diseases)
Analyst comments:
ALT +4.6% (initiated with a Buy at Goldman)
ACRS +0.9% (initiated with a Buy at Goldman)
DAWN +0.9% (initiated with a Buy at BofA Securities)
Some 51% of business executives say the U.S. economy is either already in recession or will be by the new year, according to the fourth-quarter AICPA & CIMA Economic Outlook Survey . The survey polls chief executive officers, chief financial officers, controllers and other certified public accountants in U.S. companies who hold executive and senior management accounting roles.
Only 12% of business executives expressed optimism in the U.S. economy over the next 12 months, the lowest level since the throes of the Great Recession in early 2009. That compares to 18% last quarter and 41% a year ago. Inflation, rising interest rates and high energy costs were cited as key reasons for pessimism in the outlook.
One major overhang for finance teams in recent quarters is uncertainty. One-in-four survey takers say their organizations have increased their rounds of forecasting compared to what they were doing during the pandemic economy. Roughly another third say they are continuing a stepped-up level of forecasting from that time.
Beyond the frequency of forecasting, more than one-in-four business executives say forecasting has become significantly more complex over the past year, with another 37% saying it became slightly more complex. Key factors are uncertainty surrounding pricing issues, supply chain reliability, labor costs and shifting consumer demand.
“We saw record increases in the frequency of forecasting and projections during the pandemic and that trend is clearly continuing amid uncertainty over inflation, supply chain integrity and recession risk,” said Tom Hood , CPA, CITP, CGMA, the AICPA & CIMA’s executive vice president for business engagement and growth. “We expect this pace to stay strong as companies work on their cash flow through the next few quarters.”
Key pressure points for CFOs as they grapple with heavier workloads, Hood noted, are finance team staffing and digital transformation of finance work streams.
The AICPA survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months. In comparison, the U.S. Department of Labor’s November employment report, scheduled for release tomorrow, looks back on the previous month’s hiring trends.
Other key findings of the survey:
On hiring, 34% of business executives said their organizations are looking to fill roles immediately, the same as last quarter, while another 17% said they had too few employees but are hesitant to hire. Eight percent said they had too many employees, an uptick from five percent last quarter.
Profit expectations for the next 12 months dipped into negative territory (-0.2% decline), down from zero anticipated growth last quarter. Revenue growth projections also fell from 2.6% to 2.1%, quarter over quarter.
Business executives’ optimism about their own organizations’ prospects over the next 12 months dropped another six points from 41% to only 35%
Forty-five percent of business executives said their companies had increased their cash position in the past 12 months, with 14% saying they had raised cash on hand substantially.
U.S. business executives’ outlook on the global economy over the next 12 months also fell, from nine percent last quarter to seven percent.
Inflation was the top concern of business executives for the fifth straight quarter. Other top challenges included “Employee and Benefit Costs” and “Availability of Skilled Personnel.”
The percentage of business executives who said their companies plan to expand fell three points from 49% to 47%, quarter over quarter.
Methodology
The fourth-quarter AICPA & CIMA Economic Outlook Survey was conducted from Oct. 25 to Nov. 17, 2022 , and included 551 qualified responses from CPAs who hold leadership positions, such as chief financial officer or controller, in their companies. The overall margin of error is less than 3 percentage points. A copy of the report can be found on aicpa.org.
About the Association of International Certified Professional Accountants , and AICPA & CIMA
The Association of International Certified Professional Accountants (the Association), representing AICPA & CIMA, advances the global accounting and finance profession through its work on behalf of 689,000 AICPA and CIMA members, students and engaged professionals in 196 countries and territories. Together, we are the worldwide leader on public and management accounting issues through advocacy, support for the CPA license and specialized credentials, professional education and thought leadership. We build trust by empowering our members and engaged professionals with the knowledge and opportunities to be leaders in broadening prosperity for a more inclusive, sustainable and resilient future.
The American Institute of CPAs (AICPA), the world’s largest member association representing the CPA profession, sets ethical standards for its members and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state and local governments. It also develops and grades the Uniform CPA Examination and builds the pipeline of future talent for the public accounting profession.
The Chartered Institute of Management Accountants (CIMA) is the world’s leading and largest professional body of management accountants. CIMA works closely with employers and sponsors leading-edge research, constantly updating its professional qualification a
Buyers:
HLMN COB, President/CEO, CFO/Treasurer, and Chief Technology Officer bought a total of 207,000 shares at $7.50 - $7.93 worth ~$1.59 mln.
Sellers:
APP Chief Technology Officer sold 1,285,590 shares at $13.21 - $14.46 worth ~$17.6 mln.
BLFS COO and President sold 45,405 shares at $20.02 - $21.64 worth ~$940K.
BSX Director sold 18,196 shares at $44.47 - $44.485 worth ~$809K.
IBOC 10% owner and Director sold 100,000 shares at $51.60 - $52.23 worth ~$5.19 mln.
MMC Director sold 6,000 shares at $167.97 - $170.57 worth ~$1.0 mln.
NVEE Director sold 4,600 shares at ~$139.8639 worth ~$643K.
R President, Global SCS & DTS sold 14,149 shares at $92.50 - $93.49 worth ~$1.3 mln.
SMG 10% owner and Director sold 157,448 shares at $53.05 - $54.165 worth ~$8.4 mln.
WMG Director sold 20,000 shares at $32.29 - $32.39 worth ~$646K.
Amazon.com Inc. CEO Andy Jassy said he doesn't regret the hiring spree the company went on in recent years even as the tech giant is now conducting one of the largest rounds of corporate layoffs in its history.
"This year we had the lens of a very uncertain economic environment, as well as having hired aggressively over the last several years," Mr. Jassy said at the New York Times' Dealbook Summit in New York on Wednesday. The company's goal has been to go through its businesses "thoughtfully but thoroughly" and avoid compromising on "key long-term" bets, the chief executive said.
The company is cutting jobs across its corporate ranks that could affect about 10,000 employees, or 3% of corporate staffers.
A large percentage of those cuts have focused on Amazon's devices unit, which has long been headlined by the Alexa brand. The unit had grown to more than 10,000 employees but has incurred losses totaling more than $5 billion annually in some recent years, The Wall Street Journal recently reported.
Mr. Jassy , who took over as CEO of Amazon in July 2021 , has led a large review of the company's costs and has fixated on unprofitable businesses. While Amazon has said it remains invested in Alexa's future, executives have considered whether the company should focus on trying to add capabilities to the program that would require more investment, the Journal reported.
Mr. Jassy first acknowledged the layoffs two weeks ago after many employees had expressed confusion about which businesses would experience cuts and how far they would reach. At the time, Mr. Jassy said Amazon's cuts would extend into next year and that the layoffs were "the most difficult decision we've made" during his tenure.
Amazon will continue to review its workforce levels and investment, Mr. Jassy has said. With the holiday season starting, Amazon is in its most important sales period of the year.
The company in October warned of a tough fourth quarter, with economic pressures weighing on sales. Some indicators, however, have shown a strong start to holiday shopping. Consumers spent a total of $11.3 billion on Cyber Monday, or 5.8% more than a year ago, according to Adobe Analytics.
Amazon also has sounded more optimistic. The company said Wednesday that Thanksgiving weekend was its "biggest ever," though it provided few details. Amazon said customers purchased hundreds of millions of products between Thanksgiving and Cyber Monday and generated more than $1 billion in sales for small businesses in the U.S.
NIO, Inc (NYSE:NIO) gapped up 8% on Wednesday and surged an additional 17% from the open at one point, in tandem with XPeng, Inc (NYSE:XPEV), which was racing over 40% higher after printing its third-quarter financial results.
Nio’s charge higher was also in continuation of bullish price action on Tuesday, which saw the stock close up 3.75% on hopes the Chinese government would begin to relax its strict COVID restrictions. Many city districts began to lift lockdowns on Wednesday.
The move higher caused Nio to confirm a new uptrend is in play. An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.
The higher highs indicate the bulls are in control, while the intermittent higher lows indicate consolidation periods.
Traders can use moving averages to help identify an uptrend, with rising lower time frame moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend.
Rising longer-term moving averages (such as the 200-day simple moving average) indicate a long-term uptrend.
A stock often signals when the higher high is in by printing a reversal candlestick such as a doji, bearish engulfing or hanging man candlestick. Likewise, the higher low could be signaled when a doji, morning star or hammer candlestick is printed. Moreover, the higher highs and higher lows often take place at resistance and support levels.
In an uptrend, the "trend is your friend" until it’s not, and in an uptrend there are ways for both bullish and bearish traders to participate in the stock:
Bullish traders who are already holding a position in a stock can feel confident the uptrend will continue unless the stock makes a lower low. Traders looking to take a position in a stock trading in an uptrend can usually find the safest entry on the higher low.
Bearish traders can enter the trade on the higher high and exit on the pullback. These traders can also enter when the uptrend breaks and the stock makes a lower low, indicating a reversal into a downtrend may be in the cards.
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The Nio Chart: Nio negated its most recent downtrend on Friday by printing a higher low at the $9.96 mark. On Wednesday, the stock confirmed an uptrend by forming a higher high above the most recent lower high of $10.74, which was created on Nov. 23.
If Nio closes the trading day under about $12.80, the stock will print a shooting star candlestick, which could indicate a retracement is in the cards on Thursday. The second most likely scenario in that case is that Nio prints an inside bar pattern to consolidate the recent surge.
If Nio closes the trading day near its high-of-day price, the stock will print a bullish kicker candlestick, which could indicate higher prices are on the immediate horizon. If that occurs, Nio will also regain the 50-day simple moving average as support, which will indicate longer-term sentiment has turned bullish.
When Nio eventually falls back to print a potential higher low, bullish traders who aren’t already in a position can watch to see if the stock prints a bullish reversal candlestick above the eight-day and 21-day exponential moving averages (EMAs). If Nio can remain trading above the two EMAs, the eight-day EMA will cross above the 21-day, which would be bullish.
Nio has resistance above at $14.31 and $16.75 and support below at $11.38 and $
Delta Air Lines (DAL) Wednesday invited candidates to apply for between 4,000 and 6,000 flight attendants jobs, as the company continues to expand its teams in 2023.
Delta has appointed 4,300 flights attendants since the fall of 2021, the company said in a statement on its website.
Todays most active stock options $TSLA $BABA $AMZN $SBUX $KGC $NIO $MPW $XPEV
The crisis at now-bankrupt cryptocurrency exchange FTX and an ensuing meltdown in digital asset prices have spurred a "mass exodus" as nervous customers withdraw crypto from exchanges. Some investors may be leaving the space altogether.
FTX, once the second-largest crypto exchange, went bankrupt on Nov. 11 . Its collapse, which took place just over a week after concerns over its financial health began, left stranded what is likely billions of dollars in customer funds. More than a million creditors are on the hook.
Founder and former CEO Sam Bankman-Fried said in the days before his company's failure that "assets are fine" and that the platform was processing withdrawals as usual. Still, investors hurried to get their funds off the platform in a pattern similar to a bank run that delivered the death blow to FTX.
Now, users of other exchanges are taking heed of the risk, pulling out cash despite reassurances that their assets are safe. The crypto aphorism "not your keys, not your coins," referring to the risk of having someone else hold digital assets, sums up the prevailing view.
"A mass exodus of retail off centralized exchanges is underway," analysts at crypto exchange Bitfinex wrote in a note Monday. "Every development that suggests that a particular exchange is in trouble is a catalyst for depleting balances on exchanges."
Data show that Bitcoin continues to flow out of exchanges at a breakneck pace. Some 2.3 million Bitcoin -- or almost $40 billion at current prices -- remain on exchanges, down from a high of 3.1 million, or more than $50 billion . While some tokens are heading for "cold storage," or wallets that users control directly, signs also point to some traders quitting crypto entirely.
"This trend has been in place since FTX insolvency rumors first emerged, " the Bitfinex analysts said. "This might result in discouraged retail investors being removed from the crypto industry in general, as self-custody wallet balances have not surged at par with the depleting exchange balances."
The feeling in crypto is so gloomy that some investors are completely throwing in the towel. The question that remains is whether FTX's collapse is just another relatively unusual shock driving prices lower, or if it represents a turning point that could bring a tough new regulatory regime.
"As the dust settles following the collapse of FTX, the aggregate response of Bitcoin holders is slowly becoming clearer. A key question is whether the recent sell-off can be better characterized as simply a continuation of the bearish trend, or perhaps a trigger of a deeper psychological shift amongst investors," analysts at crypto intelligence group Glassnode wrote in a note Monday.
It is possible, of course, that the scale of gloom itself may be a sign that this bear market has reached its bottom. Some traders are betting on that notion.
"One consistent event which motivates the transition from a bear back towards a bull market is the dramatic realization of losses, as investors give up and capitulate at scale," said the team at Glassnode. "The FTX fallout has triggered one of the largest capitulation events in Bitcoin history, flushing billions of U.S. dollar value out of underwater investors...There are barely any precedents."
$ROKU shaking off that downgrade
Investors will be looking for clues about the Federal Reserve's next moves in its fight against inflation when Fed Chair Jerome Powell speaks Wednesday afternoon.
What To Know: Powell is set to give a speech on the economic outlook, inflation and the labor market at the Brookings Institution in Washington, D.C. Wednesday at 1:30 p.m. ET.
The Fed Chair is expected to provide further insight into the central bank’s current thinking on future rate hikes.
Why It Matters: The Fed's final meeting of the year is slated for mid-December. Most expect the central bank to opt for a smaller 0.5% rate increase, following an aggressive series of four consecutive 0.75% rate hikes.
On Tuesday, Wharton Professor of Finance Jeremy Siegel laid out expectations for the Fed's upcoming meeting on Dec. 14.
"I do expect the 50 basis points ... I really hope that they really just pause after that," Siegel said.
Related Link: Wharton Professor Jeremy Siegel Says 2023 Recession Odds 'Virtually 100%' If The Fed Doesn't Pivot: Here's What Needs To Happen
The Wharton Professor anticipates that improving price data will steer the Fed away from its 0.75% rate hike course in December.
"I think they're going to pivot once they see the weakness in the data come through," he said.
Any sign of a pivot from Powell on future rate adjustments could push the SPDR S&P 500 (NYSE:SPY) significantly higher.
Truist Financial (TFC 44.80, -1.10, -2.4%): fell below its 50-day moving average (44.41) to its lowest level in nearly three weeks before rising back above its 50-day average.
Synchrony Financial (SYF 36.39, -0.90, -2.4%): surrendering yesterday's gain.
Blackrock (BLK 696.94, -17.06, -2.4%): falling for the third consecutive day to its lowest level in nearly three weeks.
Discover Financial (DFS 106.06, -2.49, -2.3%): falling toward its 200-day moving average (104.98).
JPMorgan Chase (JPM 133.99, -2.57, -1.9%): dipping from its best level since early April.
Comerica (CMA 69.64, -1.36, -1.9%): finding resistance near its 50-day moving average (71.32).
PNC (PNC 161.36, -3.01, -1.8%): falling toward its 50-day moving average (157.42).
Citigroup (C 46.75, -0.83, -1.7%): falling to its lowest level in nearly three weeks with its 50-day moving average (45.24) looming below.
Wells Fargo (WFC 46.81, -0.76, -1.6%): fell to its lowest level in nearly two weeks before narrowing its loss.
Morgan Stanley (MS 89.91, -1.17, -1.3%): surrendering yesterday's gain.
Goldman Sachs (GS 378.10, -3.11, -0.8%): deepening its pullback from levels not seen since mid-January. Stock went ex-dividend today.
InterContinental Exchange (ICE 104.90, -0.44, -0.4%): slipping to its lowest level in over a week.
Nasdaq (NDAQ 66.46, +0.36, +0.5%): rising into the top half of yesterday's range.
NYSE market internals summary
Volume is above average for this time of day. Breadth is mixed with issues bearish, volume is bullish and new highs to new lows are bearish. Advancing Issues: 1272 / Declining Issues: 1679 -- for a ratio of 0.8 to 1. Advancing Volume: 696,494,000 / Declining Volume: 509,622,000 -- for a ratio of 1.4 to 1. New 52-Week Highs: 27 / New 52-Week Lows: 52.
On guard for a potentially hawkish-sounding Fed Chair
The stock market is acting a bit antsy in front of the 1:30 p.m. ET speech from Fed Chair Powell on the economy, inflation, and the labor market. That's because it is concerned that the Fed Chair will arrest any rebound-minded pursuits with a hawkish-sounding speech.
Specifically, there are worries that he will say inflation, while improved, is still far too high, that the labor market, while softening, is still strong, and that the overall economy, supported by consumer spending, is still showing good resilience in the face of macro issues that include the Russia-Ukraine war, China's zero-COVID policy and, well, elevated inflation rates.
The main concern is that he will say the Fed has more work to do, that the Fed's terminal rate is apt to be higher than previously thought, and that once the terminal rate is reached the Fed will hold there for a good while to ensure inflation is under control.
In other words, market participants think the Fed Chair might squash the recovery effort that began in mid-October so that there isn't an undue easing of financial conditions that would make the Fed's inflation-fighting efforts more challenging.
That thinking inevitably invites views of higher rates for longer that, in turn, fuel worries about the Fed overdoing it and driving a hard landing for the U.S. economy. That concern is arguably on display today with market rates headed higher and the dollar moving up despite a softer-than-expected ADP Employment Change Report for November, a dour-looking Chicago PMI for November, and the fifth straight monthly decline in the Pending Home Sales Index. There was an upward revision to Q3 GDP (to 2.9% from 2.6%) and the GDP Price Deflator (to 4.3% from 4.1%), but that is backward-looking data.
The 2-yr note yield is up eight basis points to 4.55% and the 10-yr note yield is up three basis points to 3.78%. The U.S. Dollar Index is up 0.3% to 107.09.
Some of the stock market's weaker areas today are the more economically-sensitive financial (-1.2%), real estate (-0.6%), industrials (-0.6%), and materials (-0.5%) sectors. Growth stocks, meanwhile, are outperforming value stocks.
Everything is subject to change after Fed Chair Powell's speech, but for now, the stock and bond markets, and the dollar, have their guard up for a more hawkish-sounding speech.
The Nasdaq Composite is up 0.2%; the S&P 500 is down 0.2%; the Russell 2000 is down 0.4%; and the Dow Jones Industrial Average is down 0.5%.
Perhaps this shouldn't come as a surprise, but Tesla Inc. CEO (TSLA) and Twitter Inc. owner Elon Musk isn't a fan of the Federal Reserve's most aggressive interest-rate hikes since at least the 1980s.
In a reply to a tweet about the concerning outlook for the U.S. economy next year, Musk said the "Fed needs to cut interest rates immediately. They are massively amplifying the probability of a severe recession."
Musk's tweet inspired a long string of replies, including one from Sven Henrich , the founder and lead market strategist of NorthmanTrader.com: " The Fed stayed too easy for too long totally misreading inflation and now they've tightened aggressively into the highest debt construct ever without accounting for the lag effects of these rate hikes risking they'll be again late to realize the damage done."
Musk appeared to appreciate Henrich's response because the world's richest man replied with one word: "exactly."
This isn't the first time Musk has warned about looming economic upheaval. Last month, he said he expected a recession would last "until the spring of '24."
Musk's tweet comes just hours before Federal Reserve Chairman Jerome Powell is set to speak at the Brookings Institution . It will be the last time investors are due to hear from Powell until the Fed's next post-meeting press conference after the close of the December policy meeting.
U.S. crude oil inventories dove -12.6 M barrels in the November 25 week, according to the EIA, after sliding -3.7 M barrels previously. This is 4-times the forecast and is largest draw since June 2019. Gasoline stocks rose 2.8 M barrels after rising 3.1 M previously. And distillates were up 3.6 M after the prior 1.7 M gain, countering talk of supply shortages. Bloomberg reports inventories are now just 13% below normal, versus 23% in June. WTI crude oil prices are little changed, but climbed back over the $80 figure overnight and currently trades at $80.50. It hit a low for the year at 73.60 on Monday. Meanwhile, refineries have been boosting runs and are up for a fifth straight week to 95.2% of capacity. That too is the highest since the summer of 2019.
Chinese government is vowing to extend crackdown on protests. In the U.S. , cases are rising in 28 states, led by Missouri , where they are up 107% from two weeks ago.
A renewed push by China to vaccinate elderly people has sparked hopes for an end to the country's strict zero-COVID policy, but the world's second-biggest economy is facing challenges and at least a year of hard work before the policy can end, the Associated Press reported
A vaccination campaign will require months, and China also needs to build up its hospital capacity and work out a long-term virus strategy, health experts and economists warn. They say the zero-COVID policy is likely to stay in place until mid-2023, and possibly as late as 2024.
" China is in no place right now to move away from its 'zero-COVID' policy toward a 'living with COVID' policy," said Mark Williams , chief Asia economist for Capital Economics. "Healthcare capacity is very weak."
The Chinese policy has come into renewed focus this week after a weekend of protests in cities including Shanghai and Beijing over lockdowns that have kept many people in their homes for months.
See also:China protests are biggest threat to Communist Party rule since Tiananmen Square , Kyle Bass says
People say they don't have reliable access to food and medicine, and there was an outcry after two children who were in quarantine died after their parents said anti-virus controls prevented them from receiving medical care. A fire in the northwestern city of Urumqi that killed at least 10 people became another flashpoint last Friday after residents claimed that people trying to escape were blocked by locked doors.
Anthony Fauci , President Joe Biden's chief medical adviser, said this the weekend that China's policy did not make sense for public health and that its homegrown vaccines are not effective enough
On Tuesday, the head of the International Monetary Fund , Kristalina Georgieva , urged a "recalibration" of the zero- COVID approach, "exactly because of the impact it has on both people and on the economy."
Now read: China's strict zero-COVID policy isn't worth the damage it does to its economy
Separately on Wednesday, the ruling Communist Party has vowed to "resolutely crack down on infiltration and sabotage activities by hostile forces" following the largest street demonstrations in decades, the AP reported
Read now:Protests against strict COVID-zero policy are sweeping China but there is no sign yet of a national political movement
In the U.S. , known cases of COVID are rising again, with the daily average standing at 42,451 on Tuesday, according to a New York Times tracker, up76% from two weeks ago. Cases are rising in 28 states, plus Guam and Washington, D.C. , led by Missouri , where they are up 107% from two weeks ago.
The daily average for hospitalizations is up 12% to 31,125, led by Louisiana , where it has climbed 84% from two weeks ago, followed by California , where it is up 58%.
The daily average for deaths is up 2% to 285.
Coronavirus Update: MarketWatch's daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began
Other COVID-19 news you should know about:
-- Chinese authorities are relaxing the strict and sweeping lockdown measures that had been imposed on a city where many iPhones are made, but Apple Inc. (AAPL) still isn't out of the woods, writes MarketWatch's Emily Bary . Chinese officials reportedly ended broad lockdown measures late Tuesday in the city of Zhengzhou , where Foxconn operates a factory that makes iPhones, according to Bloomberg News and others. But analysts see continued question marks for Apple , which warned earlier in November that it expected the COVID-19 restrictions in China and the resulting production snags to affect iPhone shipments during the holiday quarter.
-- Twitter will no longer enforce its policy against COVID-19 misinformation, raising concerns among public-health experts and social-media researchers that the change could have serious consequences if it discourages vaccination and other efforts to combat the still-spreading virus, the AP reported "Effective Nov. 23, 2022 , Twitter is no longer enforcing the COVID-19 misleading information policy," the company said in an update on its rules published on Monday. By Tuesday, some Twitter accounts were testing the new boundaries and celebrating the platform's hands-off approach, which comes after Twitter was purchased by Elon Musk . Health experts responded with dismay but urged people to fight back.
-- A naturopathic doctor who sold fake COVID-19 immunization treatments and fraudulent vaccination cards during the height of the coronavirus pandemic was sentenced in California on Tuesday to nearly three years in prison, federal prosecutors said, the AP reported Juli A. Mazi pleaded guilty last April in federal court in San Francisco to one count of wire fraud and one count of false statements related to healthcare matters.
Here's what the numbers say:
The global tally of confirmed cases of COVID-19 topped 642.9 million on Monday, while the death toll rose above 6.63 million, according to data aggregated by Johns Hopkins University .
The U.S. leads the world with 98.7 million cases and 1,079,888 fatalities.
The Centers for Disease Control and Prevention's tracker shows that 228.4 million people living in the U.S. , equal to 68.8% of the total population, are fully vaccinated, meaning they have had their primary shots.
Tesla Inc. (NASDAQ:TSLA) is pulling customers away from other companies, especially in the U.S. where it continues to be the dominant player in the electric vehicle (EV) market.
According to the S&P’s Global Mobility report, Tesla’s EV-only strategy is giving the company a retention advantage. Model Y currently has a brand loyalty of 60.5%. As new EVs arrive, loyalty is likely to be tested, the report continued.
See also: Tesla Deserves Higher Valuation For 'Optionality Value,' Says Analyst — Highlights These Revenue Drivers
About 74% of Tesla buyers are coming from outside the brand, which the report calls as "conquest rate." The Austin, Texas-based company is acquiring customers mostly from Toyota Corp. (NYSE:TM), Honda Motor Company (NYSE:HMC), BMW AG (OTC:BMWYY) and Mercedes-Benz Group AG (OTC:MBGAF).
This $TITN , such a great story
Upgrades:
Assa Abloy (ASAZY) upgraded to Neutral from Underperform at Exane BNP Paribas
Avadel Pharmaceuticals (AVDL) upgraded to Buy from Hold at Jefferies; tgt raised to $11
Swisscom (SCMWY) upgraded to Buy from Hold at HSBC Securities
Downgrades:
Antero Resources (AR) downgraded to Hold from Buy at Tudor, Pickering, Holt & Co.
Apollo Endosurgery (APEN) downgraded to Hold from Buy at Lake Street; tgt lowered to $10
Coterra Energy (CTRA) downgraded to Hold from Buy at Tudor, Pickering, Holt & Co.
IMI PLC (IMIAY) downgraded to Hold from Buy at HSBC Securities
Legrand SA (LGRDY) downgraded to Neutral from Outperform at Exane BNP Paribas
Proximus (BGAOY) downgraded to Reduce from Hold at HSBC Securities
Others:
American States Water (AWR) initiated with a Sell at UBS; tgt $92
Forge Global Holdings (FRGE) initiated with a Neutral at UBS; tgt $1.75
Rolls Royce PLC (RYCEY) initiated with an Overweight at Barclays
RXO, Inc. (RXO) initiated with a Buy at BofA Securities
Seven Hills Realty Trust (SEVN) initiated with a Buy at Jones Trading
SJW (SJW) initiated with a Buy at UBS
West Pharm (WST) initiated with a Neutral at UBS; tgt $250
Second estimate for Q3 GDP shows stronger growth (and higher inflation)
The second estimate for Q3 GDP was revised up to 2.9% (Briefing.com consensus 2.7%) from the advance estimate of 2.6%. The GDP Price Deflator was also revised up to 4.3% (Briefing.com consensus 4.1%) from the advance estimate of 4.1%.
The key takeaway from the report is that growth was better than expected and inflation was higher than first thought.
Personal consumption expenditures were up 1.7% versus the advance estimate of 1.4%, and added 1.18 percentage points to growth. Spending on goods was down 0.2% versus the advance estimate of -1.2% while spending on services was up 2.7% versus the advance estimate of 2.8%.
Gross private domestic investment was down 9.1% versus the advance estimate of down 8.5%, and subtracted 1.71 percentage points from growth.
Net exports added 2.93 percentage points to growth versus 2.77 percentage points in the advance estimate. Exports increased 15.3% versus the advance estimate of 14.4% and imports decreased 7.3% versus the advance estimate of -6.9%.
Government spending increased 3.0% versus the advance estimate of 2.4%, and added 0.53 percentage points to growth.
The personal savings rate, as a percentage of disposable personal income, dropped to 2.8% versus the advance estimate of 3.3%. The Q2 rate was 3.2%.
The PCE Price Index increased to 4.3% from the advance estimate of 4.2% while the core PCE Price Index increased to 4.6% from the advance estimate of 4.5%.
AMAZON SAYS THANKSGIVING HOLIDAY SHOPPING WEEKEND WAS ITS BIGGEST EVER
$AMZN
Amazon today announced that this Thanksgiving holiday shopping weekend was its biggest ever, with customers around the world purchasing hundreds of millions of products between Thanksgiving and Cyber Monday.
"This was a record-breaking holiday shopping weekend for Amazon. Customers shopped millions of deals this weekend and we have many more amazing deals to come," said Doug Herrington, CEO, WW Amazon Stores. "Thank you to our customers for choosing to shop on Amazon, and to our employees and selling partners around the world who are delivering for customers every day."
Top increases in open interest $FXI $BKLN $ARKK $VIX $SPY $XLE $EEM $KWEB
S&P 500 futures are up 1 point and are trading roughly in line with fair value. The Nasdaq 100 futures are up 20 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 1 point and are trading slightly below fair value.
Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. China's Manufacturing and Non-Manufacturing PMIs fell deeper into contractionary territory in November. The Japanese government will reportedly pay for its planned increase in defense spending by tapping into a fund designated for FX intervention. South Korea's Industrial Production weakened at its fastest m/m pace since May in the November reading.
In economic data:
China's November Manufacturing PMI 48.0 (expected 49.0; last 49.2) and November Non-Manufacturing PMI 46.7 (expected 48.0; last 48.7)
Japan's October Industrial Production -2.6% m/m (expected -1.5%; last -1.7%). October Housing Starts -1.8% yr/yr (expected -1.3%; last 1.1%) and Construction Orders 7.9% yr/yr (last 36.6%)
South Korea's October Industrial Production -3.5% m/m (expected -1.0%; last -1.9%); -1.1% yr/yr (expected 0.0%; last 0.7%). October Retail Sales -0.2% m/m (last -1.9%)
Australia's October CPI 6.9% yr/yr (expected 7.4%; last 7.3%). October Private Sector Credit 0.6% m/m, as expected (last 0.7%), October Building Approvals -6.0% m/m (expected -1.8%; last -8.1%) and Q3 Construction Work Done 2.2% qtr/qtr (expected 1.5%; last -3.8%)
New Zealand's October Building Consents -10.7% m/m (last 3.6%). November ANZ Business Confidence -57.1 (last -42.
Upgrades:
Con Edison (ED) upgraded to Neutral from Underperform at BofA Securities
Cooper (COO) upgraded to Outperform from Neutral at Robert W. Baird; tgt raised to $375
Downgrades:
American Homes 4 Rent (AMH) downgraded to Peer Perform from Outperform at Wolfe Research
Carvana (CVNA) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $10
Civista Bancshares (CIVB) initiated with a Buy at Janney; tgt $27
CrowdStrike (CRWD) downgraded to Hold from Buy at Stifel; tgt lowered to $120
LPL Financial (LPLA) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $239
Methanex (MEOH) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $45
MillerKnoll (MLKN) downgraded to Hold from Buy at The Benchmark Company
Nutrien (NTR) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $93
PennyMac Mortgage (PMT) downgraded to Hold from Buy at Jones Trading
Solid Power (SLDP) downgraded to Neutral from Buy at DA Davidson; tgt lowered to $5
Steelcase (SCS) downgraded to Hold from Buy at The Benchmark Company
Others:
AerSale (ASLE) initiated with an Outperform at RBC Capital Mkts; tgt $21
Choice Hotels (CHH) initiated with a Sell at Redburn
DocuSign (DOCU) initiated with a Hold at Jefferies; tgt $50
Fisker (FSR) initiated with an Outperform at Evercore ISI; tgt $15
Fusion Pharmaceuticals (FUSN) initiated with an Outperform at SVB Leerink; tgt $6
Hilton (HLT) initiated with a Neutral at Redburn
Hyatt Hotels (H) initiated with a Buy at Redburn
Immunocore (IMCR) initiated with an Overweight at Barclays; tgt $80
Kimball (KBAL) initiated with a Buy at The Benchmark Company; tgt $80
LCNB (LCNB) initiated with a Neutral at Janney; tgt $19
Leonardo DRS (DRS) initiated with a Buy at Vertical Research; tgt $14
LSB Industries (LXU) initiated with a Buy at Jefferies; tgt $20
Lucid Group (LCID) initiated with an In-line at Evercore ISI; tgt $12
Marriott (MAR) initiated with a Sell at Redburn
POINT Biopharma (PNT) initiated with an Outperform at SVB Leerink; tgt $14
Polaris Industries (PII) initiated with a Neutral at MKM Partners; tgt $117
Rivian Automotive (RIVN) initiated with an In-line at Evercore ISI; tgt $35
Tricon Residential (TCN) initiated with a Peer Perform at Wolfe Research
Wyndham Hotels & Resorts (WH) initiated with a Neutral at Redburn
XPO Logistics (XPO) resumed with a Neutral at Citigroup; tgt $42
8:15 ET: November ADP Employment Change (Briefing.com consensus 200,000; prior 239,000)
8:30 ET: October international goods trade deficit (prior $92.20 bln), October advance Retail Inventories (prior 0.4%), October advance Wholesale Inventories (prior 0.8%), Q3 GDP -- Second Estimate (Briefing.com consensus 2.7%; prior 2.6%), and Q3 GDP Deflator -- Second Estimate (Briefing.com consensus 4.1%; prior 4.1%)
9:45 ET: November Chicago PMI (Briefing.com consensus 47.5; prior 45.2)
10:00 ET: October Pending Home Sales (Briefing.com consensus -5.2%; prior -10.2%); October JOLTS - Job Openings (prior 10.717 million)
10:30 ET: Weekly crude oil inventories (prior -3.69 mln)
14:00 ET: Fed's Beige Book
Treasury yields are mixed this morni
Horizon Therapeutics (HZNP 104.72, +25.96, +33.0%): received takeover interest from (AMGN, JNJ, SNY), according to The Wall Street Journal.
CrowdStrike (CRWD 113.28, -24.72, -17.9%): beats by $0.08, beats on revs but says that total net new ARR was below expectations; guides Q4 EPS above consensus, revs below consensus; downgraded to Hold from Buy at Stifel
Workday (WDAY 156.67, +13.37, +9.3%): beats by $0.15, reports revs in-line; raises FY23 subscription revenue guidance; approves new share repurchase program for up to $500 mln
Hewlett Packard Enterprise (HPE 15.75, +0.29, +1.9%): reports EPS in-line, beats on revs; guides JanQ EPS above consensus, revs above consensus; reaffirms FY22 EPS guidance
NetApp (NTAP 64.01, -7.78, -10.8%): beats by $0.15, reports revs in-line; guides Q3 EPS below consensus, revs below consensus; guides FY23 EPS in-line, revs below consensus
Hormel Foods (HRL 44.77, -3.42, -7.1%): beats by $0.01, misses on revs; guides FY23 EPS below consensus, revs below consensus
Intuit (INTU 378.99, -0.72, -0.2%): beats by $0.46, beats on revs; guides Q2 EPS and revs below consensus; reaffirms FY23 EPS guidance, guides FY23 revs below consensus; Credit Karma experienced continuing deterioration
Biogen (BIIB 299.92, +8.51, +2.9%): Eleven experts from leading medical institutions and eight experts from Eisai publish full results of Lecanemab Phase 3 confirmatory clarity ad study for early Alzheimer's disease in the New England Journal of Medicine
Micron (MU 54.65, -0.47, -0.9%): during its presentation at Wells Fargo TMT Summit: "Pricing has trended well below what we thought it would be when we had our earnings call [on September 29]"
Boeing (BA 177.75, +2.25, +1.3%): Lawmakers close to compromise on Boeing 737 Max certification, according to Bloomberg.
Elon Musk continues to goad Apple (AAPL) by publishing the results of a poll in which he asked his 120M Twitter followers if the world's most-valuable company "should publish all censorship actions it has taken that affect its customers." The vote was resoundingly in the affirmative, with nearly 85% of the 2.2M respondents replying "Yes" to the query. Never one to miss a chance to savor a win, Musk followed up by tweeting, "The people have spoken..."
Bigger picture: The poll was the latest in a series of pokes and prods that Musk began making towards Apple over the weekend. He called out Silicon Valley's biggest name, which controls app distribution to every iPhone, for what he claimed was the deep cutting of its advertising on Twitter. Musk also accused Apple of threatening to pull Twitter from the App Store, as well as for CEO Tim Cook to clarify his company's moves and justify the 30% cut taken on all digital app sales.
"Apple has mostly stopped advertising on Twitter. Do they hate free speech in America?" Musk wrote in a tweet, suggesting he was "going to war." "I certainly hope it does not come to that, but, yes, if there is no other choice, I will make an alternative phone." Separately, Morgan Stanley analyst Adam Jones weighed in on the matter, and said Musk's activity since he acquired Twitter for $44B has led to a growth in negative sentiment about his main business venture, Tesla (TSLA).
Thought bubble: Musk's recent mudslinging is reminiscent of a fight once waged by Epic Games over Apple's steep App Store fees, or what some have described as an illegal monopoly over app distribution. This time around, Musk is coming to battle in need of Twitter advertising dollars - and the ability to make more on subscription fees - at the same time that Apple seeks to preserve its recurring income from the App Store amid slowing demand for its devices. Musk is already trying to trigger a national conversation over Apple's relationship with free speech and content moderation, but could also appeal to lawmakers that are concerned about antitrust action and the concentrated power of Big Tech. (446 comments)
Full calendar
The mood on Wall Street remains cautious ahead of a slew of economic data due out later in the week. Today will see the latest reading on Q3 GDP and the ADP's report on private-sector payrolls, after the Consumer Confidence Index slipped further in November amid rising food and gas prices. The Personal Consumption Expenditures Price Index, the Fed's favorite inflation gauge, will also be released tomorrow, while the highly-anticipated employment report will be published on Friday.
Don't forget! Federal Reserve Chair Jerome Powell is slated to make remarks today. The big event, at the Brookings Institution, will touch on the economic outlook, inflation and the labor market. It will also be Powell's last chance to convey the thinking of the central bank before entering a blackout period ahead of the FOMC's meeting on Dec. 13-14.
Besides some hawkish comments, several other recent catalysts have the ability to weigh on the major averages. There's an OPEC+ meeting coming this weekend, protests are escalating in China over COVID-19 lockdowns and there remains continued instability in the cryptocurrency market.
Commentary: "[The S&P 500 was] marginally lower on Tuesday in thin trading conditions as the market awaits significant events over the coming weeks," analyst Andrew Hecht told Seeking Alpha. "In a year where the leading stock market indices have declined, end-of-the-year tax loss selling could put additional pressure on equities in an environment where low liquidity could exacerbate to impact... Expect volatility, and you will not be disappointed." (9 comments)
#Railroadstrike
Heading off a nationwide strike by railroad workers, House lawmakers today will take up legislation today to avert a work stoppage and prevent damage to the economy. Senate Majority Leader Chuck Schumer said at the press conference that he and Senate Minority Leader Mitch McConnell would also agree to push for the bill's quick passage. The Railway Labor Act empowers Congress to require rail companies and unions to accept labor agreements rejected by their members, though lawmakers can order both sides to push back a strike deadline or refer the negotiations to arbitration.
Quote: "I don't like going against the ability of unions to strike, but weighing the equities, we must avoid a strike," House Speaker Nancy Pelosi said after meeting with President Biden and leaders from both parties at the White House. "Jobs will be lost. Even union jobs will be lost. Product will not be going to market."
One of the top industries on watch has been the chemicals sector, which is one of the biggest users of freight rail. According to the American Chemistry Council, the group ships more than 33,000 carloads a week valued at $2.8B and any work stoppage could lead to a recession. To prepare for a shutdown, railroads even stop accepting security-sensitive shipments, such as chemicals to treat drinking water.
Flashback: The last time Congress acted to settle a nationwide railroad dispute was in 1992. Following a strike by the International Association of Machinists, Congress moved to end the industrial action two days later by approving legislation, which was immediately signed by President George H.W. Bush. (56 comments)
NATO membership
At a two-day summit in the Romanian capital of Bucharest, the North Atlantic Treaty Organization doubled down on a vow to make Ukraine a member of the military alliance. It was 14 years ago (in the same city) that foreign ministers first pledged that Kyiv would eventually become a constituent, and they still "firmly stand behind our commitment." In recent weeks, Russian missile and drone attacks have targeted civilian infrastructure across the country, with strikes that have heavily damaged Ukraine's power, water and energy infrastructure.
Quote: "NATO's door is open," Secretary-General Jens Stoltenberg said before chairing the meeting. "President Putin cannot deny sovereign nations to make their own sovereign decisions that are not a threat to Russia. I think what he's afraid of is democracy and freedom, and that's the main challenge for him."
It's not yet clear what Ukraine's borders would look like if it would join the alliance, but the country must now solely focus on defeating Russia. Troops and pro-Moscow separatists are holding parts of the south and east, while the Crimean Peninsula remains annexed and President Volodymyr Zelenskyy says the nation will keep fighting until it recovers all occupied land. NATO promised more arms for Ukraine at the meeting, as well as equipment to help restore power supplies, though the alliance is still debating whether to provide more advanced defense systems like the Patriot.
Go deeper: A military buildup is likely to be another boon for stocks like Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC) and Raytheon Technologies (NYSE:RTX), which have had a phenomenal year on the back of the increases in defense spending. All current 30 NATO nations have agreed to spend at least 2% of their GDPs on defense by 2025, and while only a third of those members have met the threshold, the latest developments should accelerate a drive for achieving their targets. Finland and Sweden are also poised to become NATO members soon amid concerns that Russia might target them next. (19 comments)
Today's Markets
In Asia, Japan -0.2%. Hong Kong +2.2%. China +0.1%. India +0.7%.
In Europe, at midday, London +0.6%. Paris +0.6%. Frankfurt +0.4%.
Futures at 6:30, Dow flat. S&P +0.1%. Nasdaq +0.3%. Crude +2.6% to $80.21. Gold +0.6% to $1774.10. Bitcoin +2.3% to $16,888.
Ten-year Treasury Yield -2 bps to 3.73%
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 GDP Q3
8:30 International Trade in Goods (Advance)
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
8:50 Fed's Bowman: “The Future of Small Banks”
9:45 Chicago PMI
10:00 Job Openings and Labor Turnover Survey
10:00 Pending Home Sales
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
12:35 PM Fed's Cook Speech
1:30 PM Jerome Powell: Economic Outlook
2:00 PM Fed's Beige Book
3:00 PM Farm Prices
Companies reporting earnings today »
What else is happening...
CrowdStrike (CRWD) plummets 19% as sales outlook misses forecasts.
Royal Bank of Canada (RY) to buy HSBC Canada (HSBC) for $10B.
Zero-COVID: China manufacturing sector shrinks most in seven months.
Reopening hopes? Watch these Chinese consumer stocks.
Coinbase Wallet (COIN) to delist Bitcoin Cash, Ripple and Stellar.
Salesforce (CRM) Q3 results come as uncertainty grows over deals.
Netflix (NFLX) stacks up billion-minute shows in streaming ratings.
Kroger (KR), Albertsons (ACI) execs defend merger in Senate hearing.
Jack Ma, the billionaire founder of Alibaba, disappeared from public view in 2020. He's been living in Tokyo for the past 6 months, a new report says.
Petco Health and Wellness reports EPS in-line, revs in-line; reaffirms FY23 EPS guidance, revs guidance (9.49)
Reports Q3 (Oct) earnings of $0.16 per share, in-line with the S&P Capital IQ Consensus of $0.16; revenues rose 4.0% year/year to $1.5 bln vs the $1.49 bln S&P Capital IQ Consensus.
Comparable sales grew 4.1 percent year over year and 19.6 percent on a two-year basis
Co reaffirms guidance for FY23, sees EPS of $0.75-0.79 vs. $0.77 S&P Capital IQ Consensus; sees FY23 revs of $5.98-6.05 bln vs. $6.01 bln S&P Capital IQ Consensus.
STOXX Europe 600: +0.8%
Germany's DAX: +0.4%
U.K.'s FTSE 100: +0.7%
France's CAC 40: +0.7%
Italy's FTSE MIB: +0.2%
Spain's IBEX 35: +0.2%
Top decreases in stock option open interest $T $KO $AAPL $VALE $LVS $SHEL $ASTS $NWL $BABA $KO $PYPL $CCL
DIS
Atlantic Equities sees 'no easy fix' for Iger at Disney
Atlantic Equities analyst Hamilton Faber said Bob Iger's return to head Disney again as CEO "caught the market by surprise," but Faber sees "no easy fix," arguing that morale at the company needs to be improved, linear TV is "very material" and its declines are worsening, DTC losses will improve, but the long-term profitability is questioned, the parks have "issues" and guidance "needs to come down." Iger used M&A to transform the company a decade ago, but he sees few obvious targets, added Faber, who maintains a Neutral rating and $107 price target on Disney shares.
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FOSL | jimmybob | 02/14/2012 09:54:12 AM |
FOSL and SODA ~ WATCH!!! | jimmybob | 02/14/2012 09:50:52 AM |
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