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Bull of the Day: Fabrinet (FN)

Investors pushing this tech stock to all-time highs as earnings approach. Fabrinet (FN) is a Zacks Rank #1 (Strong Buy) that provides optical packaging and precision optical, electro-mechanical, and electronic manufacturing services. The company offers a range of advanced optical and electro-mechanical capabilities in the manufacturing process, including process design and engineering, supply chain management, manufacturing, printed circuit board assembly, advanced packaging, integration, final assembly, and testing.Unlike most tech stocks in 2022, Fabrinet had a decent year. The stock traded to all-time highs and was up for the year by almost 10%. 2023 has already started off well, with the stock running 7% higher in just the first few weeks.With earnings just a couple weeks away, is this stock about to breakout and become one of the best performers in 2023?Earnings momentum, analyst estimates and a strong chart suggest higher prices are a strong possibility. Investors just need to decide if they want to front run the earnings report, or be patient for a pullback.More about FabrinetThe company incorporated in 1999 and is headquartered in George Town, Cayman Islands. It employs over 14,000 people and has a market cap of $5 billion.Fabrinet serves original equipment manufacturers of optical communication components, modules and sub-systems, industrial lasers, automotive components, medical devices, and sensors.The stock has a Zacks Style Score of “A” in Growth, but a “D” in both Value and Momentum. The Forward PE is 18 and the company pays no dividend.Relative StrengthThe stock closed 2021 at all-time highs, seemingly ignoring the tech sell off in the fourth quarter of that year. However, the sell off early last year did bring selling into the name, which pulled back about 30% in the first six months.This price action was pretty much in line with the overall market. But Fabrinet bounced over the summer much more quickly than its peers. The stock hit new all-time highs in November and has continued higher from there.The reason for the strong move higher has been postive earnings momentum over the last couple quarters.Back-to-Back Earnings BeatsIn August, the company reported an 8% beat. This brought investors back into the stock and close to all-time highs. From there, the stock saw some sideways trading until it jumped again after the 13% EPS beat in early November.Looking into that Q1, Fabrinet reported $1.97 v the $1.74 expected. Revenues came in above expectations and they guided Q2 higher on both the top and bottom lines.Management said they executed well to produce robust margins. They added that favorable foreign exchange tailwinds produced EPS that produced earnings far above expectations.  Moreover, they expect favorable demand trends to bring positive results in Q2.Estimates RisingAnalysts hiked their estimates and price targets after that Q1 report.Over the last 90 days, the current quarters estimates have gone from $1.73 to $1.89, or 9% higher. Numbers for next quarter have been lifted as well, with estimates going up by 7%.Looking at the current year, we have seen estimates go from $6.95 to $7.48 over the last 90 days. For next year, estimates flatten out a bit, so investors should watch these numbers after the next earnings report in early February.JPMorgan raised its rating on FN to Overweight and lifted its price target from $126 to $156. The firm cited the company’s exposure to secular growth markets, track record to outperform, share gains and incremental outsourcing.The Technical Take With the stock at all-time highs, the upcoming earnings will be a big catalyst.If the company can impress again, the bulls should be looking for a move to the $155-57 area. This is the 161.8% Fibonacci extension drawn from the 2022 highs to lows.If the stock does pull back into a positive earnings report, it would not shock most tech investors. In the current market atmosphere, earnings beats get sold all the time. But for those interested in the stock longer-term, they should eye the moving averages.The $130 level is the 50-day moving average, while the 200-day is all the way down at $105.  The $125 area was strong support in Q4, so look for that level as well.For those looking to buy a Fibonacci retracement the half way back area drawn from September lows to recent highs is $115.In Summary The relative strength seen in 2022 is already leading to outperformance in 2023. Investors should keep a close eye on earnings, which will be February 6th right after the market closes.Look for the company to beat again and possibly take out the $150 level and beyond. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fabrinet (FN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 25th, 2023

How to Find the Next Stock Market Leaders

The tech bull is over. What will replace it? (1:00) - Don’t Chase The FOMO: Building A Strong Portfolio(14:45) - Top Stocks To Keep On Your Radar: New Trending Value Stocks(38:00) - Episode Roundup: LNTH, MTDR, MGY, UFPI, TRNO            Podcast@Zacks.com Welcome to Episode #314 of the Value Investor Podcast.Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.There’s a lot of noise out there for investors. It’s easy to get caught up in the recent rally in many growth stocks. Fear of missing out, or FOMO, can take over.Value investors shouldn’t panic. There are always plenty of fake out rallies within bear markets.Will Value Stocks Lead? But if growth stocks, including technology stocks, aren’t going to be the leaders in a new bull market, what is? And how do you find those next stock market leaders?If you think value is going to be the next leader, one strategy is to run some value screens on Zacks.com. But another strategy is to look what portfolio managers, who manage actively-managed value funds, are buying.5 Value Stocks for the Next Bull1.       Lantheus Holding, Inc. LNTHLantheus is a diagnostics company that has been in business for 60 years. But in 2021, it got FDA approval for a new product called Pylarify, which is an imaging agent for detection fo suspected recurrent or metastatic prostate cancer.Pylarify has been a game changer for Lantheus. In the third quarter, revenue surged 134.4% to $239.3 million from $102.1 million. Lantheus’ free cash flow in the quarter also soared to $87.5 million from just $1.9 million a year ago.Lantheus raised full year guidance.But even with the good news, shares have fallen 25% in the last 3 months. Lantheus now has a forward P/E of just 12.9.Should investors be looking at growth stocks like Lantheus that are now on sale?2.       Matador Resources MTDRMatador Resources is an energy exploration and producer drilling in the Delaware Basin, the Eagle Ford shale, the Haynesville shale and Cotton Valley.Shares of Matador Resources have soared over the last two years, adding 332% but have cooled the last 3 months, falling 2.7%.Last December, Matador Resources raised its dividend by 50%. It has also reduced its debt by $775 million over the last 2 years.Matador Resources is trading at just 7.2x forward earnings.Will oil stocks like Matador Resources see gains for the third year in a row in 2023?3.       Magnolia Oil & Gas Corp. MGYMagnolia Oil & Gas is a smaller exploration and production company that has operations in the Eagle Ford and Austin chalk in South Texas.Magnolia Oil & Gas recently announced it expects to generate full-year 2023 production growth of 10%.Shares of Magnolia Oil & Gas have fallen 8.8% in the last 3 months. It is cheap, with a forward P/E of 7.2. It also pays a dividend, currently yielding 1.7%.Should investors be considering the smaller cap energy companies like Magnolia Oil & Gas in 2023?4.       UFP Industries, Inc. UFPIUFP Industries was founded in 1955 and is a holding company with 3 markets in wood products: retail, industrial and construction. It sells outdoor living brands like ProWood at home improvement stores, roof trusses and floor systems to major builders and wood and non-wood packaging solutions to multinationals.UFP Industries raised its dividend 33% last year. It is currently yielding 1.1%.Shares of UFP Industries are up 6.8% in the last year but it is still cheap, with a forward P/E of 11.Will commodities-focused companies like UFP Industries breakout, or breakdown, in 2023?5.       Terreno Realty Corp. TRNOTerreno Realty is a REIT which owns and operates industrial real estate in 6 major coastal US markets including Los Angeles, Northern New Jersey and New York City, the San Francisco Bay Area, Seattle, Miami and Washington DC.As of Dec 31, 2022, Terreno Realty was 98.6% leased, up from 95.5% the year before.Shares of Terreno Realty are up 18% in the last 3 months but it still has value with a Price-to-Book ratio of just 2.2. It also pays a dividend yielding 2.5%.Should you be looking at REITs like Terreno Realty in 2023?What Else Should You Know About Finding the Next Stock Market Leaders? Listen to this week’s podcast to find out.  Free Report: Must-See Energy Stocks for 2023 Record profits at oil companies can mean big gains for you. With soaring demand and elevated prices, oil stocks could be top performers by far in 2023. Zacks has released a special report revealing the 4 oil stocks experts believe will deliver the biggest gains. (You’ll never guess Stock #2!) Download Oil Market on Fire today, absolutely free.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UFP Industries, Inc. (UFPI): Free Stock Analysis Report Terreno Realty Corporation (TRNO): Free Stock Analysis Report Matador Resources Company (MTDR): Free Stock Analysis Report Lantheus Holdings, Inc. (LNTH): Free Stock Analysis Report Magnolia Oil & Gas Corp (MGY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 26th, 2023

Tesla can weather an economic storm, but some of its guidance isn"t adding up, Gene Munster says

Tesla had a strong fourth quarter, though some of the guidance figures are difficult to interpret, Munster said. Tesla CEO Elon MuskBusiness Insider/Samantha Lee Some of Tesla's guidance isn't adding up, despite a strong earnings report, Gene Munster said. The Tesla bull pointed to the company's projected 20% profit margin this year, compared to 16% for the industry. Munster said the stock would trade sideways until investors get a better picture of how Tesla will grow. Tesla can weather an economic storm, but some of its guidance for the year ahead isn't quite adding up, according to Deepwater Asset Management's Gene Munster.Munster, a Tesla bull, said that the electric-vehicle maker would be in good shape to navigate economic headwinds in 2023 after the stock plunged 65% last year amid rising inflation, a strong US dollar, and rising interest rates. That's because of the company's better-than-expected earnings report, Munster said in a note on Wednesday, as Tesla reported record revenue of $24.3 billion over the last quarter, beating analysts' estimates of $24.1 billion.Those figures spurred a strong rally for the EV-maker on Thursday, with shares climbing 11% early in the day. Investors appear optimistic that the company's recent price cuts in Europe, Asia, and the US can revive demand for its vehicles, despite a steep decline in deliveries and production in the previous year.But some of Tesla's guidance for the upcoming year doesn't quite add up, Munster said in an interview with CNBC. He pointed to the large gap between Tesla's gross profit margin outlook and that of the rest of the auto industry. Tesla CFO Zach Kirkhorn predicted margins of 20% or more in 2023, though the broader industry is expecting a 16% margin.Munster added that during Tesla's earnings call, Musk revealed that the company's informal delivery target was a 50% increase in 2023, which implies 2 million deliveries this year. However, the formal delivery target in Tesla's earnings report was a 37% increase in 2023, implying 1.8 million deliveries this year. That's down from the 40% delivery increase Tesla reported in 2022. "I just need more clarity," Munster said of the numbers. In his note, he said he believed Tesla would end the year closer to the internal target of 2 million deliveries, given the boost in demand after the recent price cuts.Despite the positive outlook, he predicted a soft performance for Tesla stock over the next quarter, with shares trading flat as investors get a better sense of how the company will grow this year. The stock has rallied to $158.52, up 47% from $108.10 at the beginning of the year.Read the original article on Business Insider.....»»

Category: dealsSource: nytJan 26th, 2023

Earnings Scheduled For January 26, 2023

Companies Reporting Before The Bell • Nokia (NYSE:NOK) is estimated to report quarterly earnings at $0.14 per share on revenue of $7.20 billion. • SAP (NYSE:SAP) is expected to report quarterly earnings at $1.49 per share on revenue of $9.29 billion. • STMicroelectronics (NYSE:STM) is projected to report quarterly earnings at $1.13 per share on revenue of $4.41 billion. • OSI Systems (NASDAQ:OSIS) is expected to report quarterly earnings at $1.19 per share on revenue of $296.84 million. • East West Bancorp (NASDAQ:EWBC) is likely to report quarterly earnings at $2.24 per share on revenue of $587.68 million. • Nucor (NYSE:NUE) is estimated to report quarterly earnings at $4.19 per share on revenue of $8.43 billion. • Mastercard (NYSE:MA) is projected to report quarterly earnings at $2.58 per share on revenue of $5.79 billion. • World Acceptance (NASDAQ:WRLD) is expected to report quarterly earnings at $0.55 per share on revenue of $151.44 million. • NetScout Systems (NASDAQ:NTCT) is expected to report quarterly earnings at $0.68 per share on revenue of $239.86 million. • Webster Finl (NYSE:WBS) is likely to report quarterly earnings at $1.66 per share on revenue of $595.48 million. • Marsh & McLennan (NYSE:MMC) is estimated to report quarterly earnings at $1.41 per share on revenue of $5.20 billion. • Sherwin-Williams (NYSE:SHW) is projected to report quarterly earnings at $1.86 per share on revenue of $5.26 billion. • Comcast (NASDAQ:CMCSA) is expected to report quarterly earnings at $0.77 per share on revenue of $30.31 billion. • T. Rowe Price Gr (NASDAQ:TROW) is estimated to report quarterly earnings at $1.70 per share on revenue of $1.54 billion. • JetBlue Airways (NASDAQ:JBLU) is likely to report quarterly earnings at $0.20 per share on revenue of $2.41 billion. • Mobileye Global (NASDAQ:MBLY) is likely to report quarterly earnings at $0.17 per share on revenue of $535.82 million. • American Airlines Group (NASDAQ:AAL) is estimated to report quarterly earnings at $1.14 per share on revenue of $13.20 billion. • Archer-Daniels Midland (NYSE:ADM) is estimated to report quarterly earnings at $1.64 per share on revenue of $25.41 billion. • Global X Guru Index ETF (NYSE:GURU) is likely to report quarterly loss at $0.23 per share on revenue of $6.91 million. • Old Republic Intl (NYSE:ORI) is likely to report quarterly earnings at $0.55 per share on revenue of $1.96 billion. • Southwest Airlines (NYSE:LUV) is likely to report quarterly loss at $0.09 per share on revenue of $6.19 billion. • CNX Resources (NYSE:CNX) is expected to report quarterly earnings at $0.58 per share on revenue of $495.80 million. • Northrop Grumman (NYSE:NOC) is projected to report quarterly earnings at $6.57 per share on revenue of $9.66 billion. • Xerox Holdings (NASDAQ:XRX) is projected to report quarterly earnings at $0.49 per share on revenue of $1.89 billion. • Valero Energy (NYSE:VLO) is expected to report quarterly earnings at $7.37 per share on revenue of $43.39 billion. • Eagle Materials (NYSE:EXP) is projected to report quarterly earnings at $3.23 per share on revenue of $534.54 million. • Applied Industrial (NYSE:AIT) is expected to report quarterly earnings at $1.67 per share on revenue of $996.47 million. • McCormick & Co (NYSE:MKC) is projected to report quarterly earnings at $0.86 per share on revenue of $1.77 billion. • Amalgamated Financial (NASDAQ:AMAL) is likely to report quarterly earnings at $0.74 per share on revenue of $72.85 million. • Xcel Energy (NASDAQ:XEL) is projected to report quarterly earnings at $0.68 per share on revenue of $3.17 billion. • Virtu Financial (NASDAQ:VIRT) is projected to report quarterly earnings at $0.52 per share on revenue of ...Full story available on Benzinga.com.....»»

Category: earningsSource: benzingaJan 26th, 2023

7 Growth Stocks to Buy as a New Bull Market Emerges

InvestorPlace - Stock Market News, Stock Advice & Trading Tips Although the backdrop isn’t the most encouraging, the rise of an unusual bull market could bolster certain growth stocks to buy. The post 7 Growth Stocks to Buy as a New Bull Market Emerges appeared first on InvestorPlace. More From InvestorPlace Buy This $5 Stock BEFORE This Apple Project Goes Live The Best $1 Investment You Can Make Today It doesn’t matter if you have $500 or $5 million. Do this now. Early Bitcoin Millionaire Reveals His Next Big Crypto Trade “On Air”.....»»

Category: topSource: investorplaceJan 25th, 2023

Intuit Is About To Make A Move, But Which Way?

Intuit shares have been trading in a narrowing angle. Citi has named them one of its top stocks for 2023. If a breakout comes, we think it will be to the upside. 5 stocks we like better than Intuit Shares of Intuit Inc. (NASDAQ:INTU) have been consolidating in a tightening range since last summer, and […] Intuit shares have been trading in a narrowing angle. Citi has named them one of its top stocks for 2023. If a breakout comes, we think it will be to the upside. 5 stocks we like better than Intuit Shares of Intuit Inc. (NASDAQ:INTU) have been consolidating in a tightening range since last summer, and it’s starting to feel like they’re ready to awake from their slumber. Enough tailwinds and bullish comments from the heavyweights suggest that such an impending move could well be to the north. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2022 hedge fund letters, conferences and more   Intuit stock is currently testing waters just above $410, having gone as low as $360 in November and $340 in May. Let’s explore the business case for getting involved and targeting a run toward $500. Bullish Outlook For starters, investment firm Citi recently named Intuit as one of its top application software stocks for 2023. The team there, led by analyst Steven Enders, noted that several "tactical opportunities" do exist in the application software space. They prefer those that might be considered "more defensive" and are most likely to beat estimates. Also considered were companies that have improving margin profiles and a "relatively defensive valuation." On that list were Workiva Inc (NYSE:WK) and Monday.com Ltd (NASDAQ:MNDY), but for very different reasons. Intuit specifically was there because of its large upside potential, helped largely by how dormant shares have been in recent months. For context, against the other two since the first week of January, Intuit shares are up only 6% versus 13% for Workiva and 22% for Monday.com. And Marketbeat’s MarketRank Forecast has them rated a Moderate Buy with about 20% upside from where shares closed on Tuesday. This lethargy in Intuit shares is all the more surprising considering the strong financial performance of the company as seen in their fiscal Q1 report towards the end of last year. Topline earnings breezed past analyst expectations, yet shares are essentially flat since then. From a strategic point of view, the company has also been making moves that support the bull thesis. Intuit recently expanded the QuickBooks Business Network to make it available to small businesses worldwide, opening up a fresh market segment. In doing so they are aiming to create one of the largest B2B networks to accelerate and automate payments and improve the overall cash flow of businesses. And in the weeks leading up to the holidays, the company announced an acquisition of SeedFi, to bolster its credit check portfolio. Getting Involved In terms of risks to be mindful of, Intuit is reliant on business and consumer spending to feed its revenue engines, both of which are at risk in the current economic environment. And with a price-to-earnings ratio of almost 63, Intuit still feels expensive at these levels. While it’s down from 2021’s high of 80, it’s still a long way above the historical trend of sub-40 prints. Although, to be fair, it’s still much better thanSalesforce Inc (NASDAQ: CRM) which boasts a price-to-earnings ratio of 560 and who also competes in the enterprise software space.   Technically, there’s a lot to like about the stock. Higher lows from last May support the rising momentum on the bull’s side. While shares still have to break out decisively to the upside, you have to be backing their chances to do so in the coming weeks. Sure, shares are down more than 40% from the all-time highs they tagged back in the pandemic fuelled heights of 2021, but they’ve managed to bear the brunt of the storm since then. And with the economic horizon getting a little bit brighter, companies whose shares have been consolidating and biding their time might soon start to see volume pouring in on the bid. Should you invest $1,000 in Intuit right now? Before you consider Intuit, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Intuit wasn't on the list. While Intuit currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. Article by Sam Quirke, MarketBeat.....»»

Category: blogSource: valuewalkJan 25th, 2023

NOVAGOLD Reports Fiscal Year 2022 Financial Results

NOVAGOLD's strong cash position of $126 million as of November 30, 2022, with additional funds of $25 million due in July 2023 from Newmont Corporation, should be sufficient to advance Donlin Gold through an updated feasibility study. The 42,331-meter (m) 2022 drill program was completed ahead of schedule and under budget. The Donlin Gold joint release issued by NOVAGOLD and Barrick on January 19, 2023 reported results that reconcile favorably with the resource model as well as further support the global resource estimate and recent modelling concepts. With an increased appreciation of the geology, the experienced team will continue to focus on updating the resource model and completing trade-off studies — all of which are moving Donlin Gold up the value chain and leading toward an updated feasibility study decision to position the project well for the next leg in gold's long-term bull market. VANCOUVER, British Columbia, Jan. 25, 2023 (GLOBE NEWSWIRE) -- NOVAGOLD RESOURCES INC. ("NOVAGOLD" or "the Company") ((NYSE American, TSX:NG) today released its 2022 fiscal year financial results and an update on Donlin Gold, among the largest — and envisioned to be in the lower quartile in terms of operating cost — of the next generation of gold operating mines, and more importantly in a jurisdiction that welcomes responsible development. Donlin Gold LLC is owned equally by NOVAGOLD and Barrick Gold Corporation ("Barrick"). Details of the financial results for the fiscal year ended November 30, 2022 are presented in the consolidated financial statements and annual report on Form 10-K filed on January 25, 2023 that is available on the Company's website at www.novagold.com, on SEDAR at www.sedar.com, and on EDGAR at www.sec.gov. All amounts are in U.S. dollars unless otherwise stated. In 2022, the following milestones were achieved at Donlin Gold: The comprehensive 141-hole, 42,331-meter drill program was successfully completed ahead of schedule, with multiple high-grade gold intercepts reported from the last set of assays and the advancement of key project efforts. The success of our 2022 drill program is due to the exceptional dedication of the Donlin Gold team in Anchorage and at site, the majority of which are local hires from 24 different communities in the Yukon-Kuskokwim ("Y-K") region, who all share the goal of protecting the health and safety of their colleagues. In partnership with Calista Corporation ("Calista") and The Kuskokwim Corporation ("TKC"), the Company pursued its stakeholder and government engagement efforts in the Y-K region, Alaska and Washington, D.C.: Crooked Creek, the closest community to the project site in the Y-K region formally expressed its support of Donlin Gold; Four additional Shared Value Statements were signed with Y-K villages, for a total of 12; Five local hires from the 2022 drill program signed on as Donlin Gold Community Liaison representatives in their villages (Marshall, Tuluksak, Nikolai, Napaskiak, and Pilot Station); and Calista and Donlin Gold continued their proactive, bipartisan outreach in Alaska as well as with the Administration and Congress in Washington, D.C. Environmental and social investment focused on the Y-K region spanned from supporting important health and safety initiatives in remote communities to cultural preservation efforts and educational programming in collaboration with school districts and other organizations. Key achievements included: Conducted multiple fishery studies, reclamation work and other environmental activities. Supported various search and rescue teams in the region, funded the Healthy Alaska Natives Foundation and Bethel Community Services Foundation, as well as sponsored and participated in the Alaska Safe Riders initiative, which promotes safety for year-round outdoor sports. Fostered education, community wellness and cultural preservation through a variety of interventions including several river studies, supported the local school district and educational organizations, funded and participated in youth sporting activities, and backed initiatives led by Traditional Councils and Native communities. As a federally permitted project on private Alaska Native Corporation land designated by law for mining activities and with key State permits in hand, activities continued to keep our permits in good standing. Major milestones included: Applied for a new air quality permit from the Alaska Department of Environmental Conservation (ADEC). A draft permit was issued for public comment in December 2022. Submitted application to ADEC for the regularly scheduled re-issuance of its Alaska Pollutant Discharge Elimination System permit, which is now complete and will remain in effect until the State completes the re-issuance. On November 1, 2022, the Alaska Department of Natural Resources (ADNR) finalized the re-location plan for public easements in the mine site and transportation facility areas — decisions which were not appealed. President's Message Excellent Results from the 2022 Drill Program Support Next Steps for Donlin Gold NOVAGOLD's management team has been together for a decade now and is committed to the advancement of the 50%-owned Donlin Gold project to be perfectly situated for the next leg in the gold bull market. Many activities have taken place over the years to support Donlin Gold and de-risk the project to enable it to benefit from a rising gold price environment. These include, among many others, the receipt of key Federal and State permits, geological and exploration drilling, technical and trade-off studies, environmental initiatives, successful implementation of employee health and safety procedures, and extensive community engagement and government affairs efforts. This last year was no exception as activities substantially ramped-up at the start of the year with the project camp reopening to begin the largest drill program in over 15 years at Donlin Gold. This campaign was executed while remaining attentive to the health and safety of our employees, project contractors and stakeholders, and concurrently with the extensive community relations and government affairs efforts conducted in collaboration with our Alaska Native Corporation partners, Calista and TKC. The success of this program is due to the exceptional dedication of the Donlin Gold team in Anchorage and at site, the majority of which were local hires from 24 different communities in the Y-K region, who all share the goal of protecting the health and safety of their colleagues. Donlin Gold's 2022 drill program was completed in September with 141 holes drilled for a total of 42,331 m. The final set of results released jointly with Barrick on January 19, 2023, include assays for 37 complete and 7 partial holes, encompassing the remaining 12,762 m of length drilled. Drilling in 2022 returned some of the best assay results seen to date at Donlin Gold, delivering outstanding gold intercepts which include, among others from the most recent set of assay results, drill hole DC22-2130 that intersected 17.20 m grading 11.11 g/t gold, with a sub-interval of 4.25 m grading 36.91 g/t gold. As part of the key focus areas for the drill program, tight-spaced 20m x 20m grid drilling in representative areas within the main structural domains of the deposit (Lewis –further infilled to 10m x 10m, West ACMA and Divide areas) confirmed recent geological modelling at wider drill-spacing in the immediate area surrounding the grids. It also identified additional short-scale controls that will be incorporated into an update to refine the geological domains used for global resource estimation, which will be utilized for strategic mine planning work. The 14 additional geotechnical drill holes provided information needed to advance the application for the Alaska Dam Safety Certifications. In truth, we could not be happier with the outcome of the 2022 drill program; the assay labs returned some of the best intercepts since the project's inception and indeed among open-pit gold projects industry-wide. Just to highlight how encouraging the results were, what follows are the top 20 intercepts from the 2022 Donlin Gold drill program: Hole ID Location Date Reported From (m) To (m) Length (m) Grade(g/t Au) DC22-2068 Divide 11/01/2022 117.52 159.80 42.28 30.68 DC22-2077 Divide 11/01/2022 150.11 199.07 48.96 20.61 DC22-2040 ACMA 07/28/2022 232.95 285.22 52.57 14.63 DC22-2063 Divide 11/01/2022 236.22 297.18 60.96 12.35 DC22-2063 Divide 11/01/2022 162.18 181.92 19.74 34.17 DC22-2056 ACMA 07/28/2022 99.82 173.80 73.98 4.21 DC22-2092 Divide 11/01/2022 116.12 157.31 41.19 6.64 DC22-2063 Divide 07/28/2022 130.04 142.14 12.10 22.15 DC22-2086 Divide 11/01/2022 160.87 170.78 9.91 22.24 DC22-2120 Lewis 11/01/2022 41.86 71.73 29.87 6.96 DC22-2040 ACMA 07/28/2022 197.60 216.25 18.65 10.78 DC22-2067 ACMA 07/28/2022 464.06 508.64 44.58 4.50.....»»

Category: earningsSource: benzingaJan 25th, 2023

The economy, funding, and 3 other small-business challenges entrepreneurs will face in 2023, according to founders

Insider surveyed 68 founders about their 2023 predictions. Their top concerns for the year were the economy, funding, and marketing. Gloria Chou, the founder and CEO of Gloria Chou PR; Kimberly Lee Minor, the founder and CEO of Bumbershoot; and Gayle Yelon, a cofounder and chief marketing officer of Montserrat New York.Gloria Chou, Kimberly Lee Minor, and Gayle Yelon This year is poised to provide a host of challenges for both new and veteran entrepreneurs. Insider surveyed 68 founders about their 2023 predictions and the hurdles ahead for business owners. Their top concerns centered on the economy, funding, and marketing. Whether you're starting or scaling a business in 2023, this year is poised to challenge both new and veteran entrepreneurs.Insider surveyed 68 founders about their 2023 predictions, including the biggest business trends and the fastest-growing industries. We also asked what they thought the top challenges for entrepreneurs would be this year. While it's impossible to determine the future, their answers centered on how an unstable economy could affect essential business functions like funding, sales, and marketing."With the shifting economy, many founders will feel uncertain in these tumultuous times," said Cynthia Plotch, a cofounder and CEO of the women's-health brand Stix.Here's what founders think the top five challenges for business owners in 2023 will be.Some responses have been edited and condensed for clarity.1. Recession and economic uncertaintyHenry Murray, a cofounder of Waterdrop.Henry MurrayHenry Murray, a cofounder of Waterdrop, a beverage service"A top challenge we're already seeing, which will continue into 2023, is balancing the effects of a long-term bull market with the needs of investors, consumers, and industries."Ria Graham, a cofounder of Kokomo, a Caribbean restaurant"It's difficult to make sound decisions in a time of uncertainty. Inflation is through the roof and makes it difficult to provide a service and product at a reasonable price."Tim Dierckxsens, a cofounder of the Web3 company Venly"Growth forecasts will most likely be wrong, and businesses may falter under pressure. Finding the balance to grow while making sure they can survive will be key."Vic Drabicky, the founder and CEO of January Digital, a digital marketing agency "Uncertainty makes it almost impossible to plan long term with a high level of confidence. When the future is clearer, businesses make better investments and better decisions. When it's uncertain, businesses tend to pull back."Paige Enslow, the founder and CEO of Stewart Enslow, a sustainable clothing brand "With people needing to save their money to deal with rising costs of housing and basic necessities, it is harder for people to take a risk buying a new product from a brand they don't have experience with."2. FundingHans Schrei, a cofounder and CEO of Wunderkeks.Hans SchreiHans Schrei, a cofounder of the cookie brand Wunderkeks"Funding will be a challenge across all verticals, mostly because investors are still writing off the failed bets from the 2020-2021 frenzy. Our understanding of what 'traction' means is changing, and so is our understanding of the founder-investor relationship. It will all be for the best, but still painful."Brian Meiggs, the founder of the media company My Millennial Guide"With so many companies competing for funding, it can be difficult to stand out and attract attention from potential investors. This means that founders will need to be creative in how they pitch their businesses and find ways to demonstrate the value that they offer."Sivan Baram, a cofounder of the social-shopping platform Radd"It looks like it will be harder to secure new investment rounds this year, but on the positive side, as one of my investors told me, it is a great opportunity for the good companies to stand out."Ashley Tyrner, the founder and CEO of FarmboxRx, a produce-delivery service"Venture-capital firms have closed their purses as they await to see what happens with the economy. Founders must have at least two years of runway in their bank account or pipeline. Gaining funding will be incredibly difficult the next 12 to 18 months, and valuations are starting to come more back down to earth."Julie Castro Abrams, the founder and CEO of the women's network How Women Lead"Founders are being asked to tighten up their valuations, and for some that will make future funding challenging."3. Marketing and customer acquisitionBeatrice Dixon, a cofounder and the CEO of the Honey Pot Company.Beatrice DixonBeatrice Dixon, a cofounder and the CEO of the feminine-care brand Honey Pot Company"Continued market saturation. Due to some of the value of a global pandemic, we see humans taking risks on developing brands and arguably being able to quickly go to market barring what would have normally been time and space restraints. I think there will be dilutive market saturation, and the challenge then becomes the ability to actively communicate your 'why' through undeveloped tactics or channels."Daphne Chen, a cofounder and co-CEO of TBD Health, a company that makes at-home STD/STI screening kits"It depends on stage and sector, but I think across the board the bar is going to be higher for demonstrating that customers actually want and need your product or service. Demonstrating durable value is going to be more important than ever."Jonathan Zacharias, a cofounder and the president of the marketing agency GR0"Acquiring new customers. After IOS14 privacy updates, social ads do not work like they used to, so founders need to get creative in how they are acquiring new customers."Gloria Chou, the founder and CEO of the advertising agency Gloria Chou PR"We have an oversaturation of content, so founders need to know how to leverage strategic messaging well, as it's not about creating more content. Consumers can also agree that we don't need more content, ideas, or strategies. What we need is connection and community. If you don't have a supportive and engaged community aspect to your business to build connections and allow people to feel seen, you're missing out on the ability to grow your business and impact."Payton Nyquvest, the founder and CEO of the psychedelics company Numinus"Finding your community — whether that's building the community within your employee team (which is likely composed of remote workers) or the community in your customer base. People are looking for connection, and I believe it's becoming harder to find."4. Hiring and retaining talentLola Bakare, the founder and chief marketing officer of Be/co.Lola BakareLola Bakare, the founder and chief marketing officer of the marketing agency Be/co"Competition — more people unemployed means more people putting up shingles. I find this exciting. It'll only push us all to do our most authentic work."Matt Woodruff, a cofounder and chief product officer of the software-as-a-service company Constellation"As the job landscape continues to shift, especially in the tech industry, it's going to become increasingly important for companies to attract and retain quality talent. Founders should prioritize meeting and exceeding the needs of their talent to ensure that their workforce remains satisfied and secure."Kimberly Lee Minor, the founder and CEO of the consulting firm Bumbershoot"Finding and retaining talent, especially if they haven't created a strategy for attracting a diverse talent pool and they have not done the work to create a productive, inclusive, and welcoming culture."Ariela Safira, the founder and CEO of the mental-wellness startup Real"Building and growing effective teams. 2022's economy and its resulting layoffs resulted in broken trust amidst employees — when we combine this with the remote world, the collective trust and determination a startup needs to grow and succeed will be hard to create in 2023."5. Brand transparency and sustainabilityDee C. Marshall, the founder of Diverse & Engaged.Dee C. MarshallDee C. Marshall, the founder and CEO of Diverse & Engaged, a training-and-development company"Founders will face challenges around sustainability and how they are meeting environmental, social, and corporate governance goals, which is a new requirement and path to scale as it is a major differentiator for businesses."Gayle Yelon, a cofounder and chief marketing officer of the jewelry brand Montserrat New York"I think communicating to customers and being transparent about business will be a challenge in a positive way. I'd like to see other companies open up about materials and best practices. It will open up the floor for conversations on how we can all do better."Katerina Schneider, the founder and CEO of Ritual, a company offering multivitamins and supplements"We often say that our industry has been asleep at the wheel on one of the biggest health crises of our time: climate change. We're starting to see consumers demand transparency and sustainable practices from companies. It's usually not cheap or easy to create a company centered around sustainability, but consumers are demanding it, and founders are going to need to find ways to work sustainably and provide transparency to their consumers."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 25th, 2023

Elon Musk on Saudi "ass-covering" and 10 other things the Tesla boss said to defend himself in the "funding secured" trial

Elon Musk has given testimony in a trial over allegations of securities fraud. Here are 11 things we've learned about the Tesla boss and the "funding secured" tweet. A courtroom sketch shows Tesla CEO Elon Musk testifying on Monday.Vicki Behringer/Reuters Elon Musk testified Monday in trial sparked by shareholder allegations the Tesla CEO committed securities fraud. He said Saudi investors sent "ass-covering" texts and he planned to sell SpaceX stock to take Tesla private. Here are 11 things we've learned about Musk and the "funding secured" tweet at the heart of the lawsuit. Elon Musk took the stand again Tuesday to defend himself in an ongoing trial sparked by a class-action shareholder lawsuit that alleges the Tesla CEO committed securities fraud.Investors suing Musk have accused the world's second-richest man of illegally manipulating Tesla's stock price in 2018 when he tweeted he had "funding secured" to take the company private at $420 a share.Here are 11 things we've learned in the San Francisco trial, from Musk's testimony so far.Cathie Wood told Musk that Tesla investors wouldn't support his plansOn Tuesday, Musk told a court he had scrapped his plans to take Tesla private at $420 a share after a letter from Ark Invest CIO and longtime Tesla bull Cathie Wood showed him that investors wouldn't like the move.Wood's views "represent small investors", Musk said, adding that he "felt it was important to be responsive to their wishes."Musk never had a specific number in mind for how much it would cost to take Tesla privateMusk sidestepped simple "yes" or "no" responses to questions raised by Nicholas Porritt, a lawyer for the investors, about securing funding pledges by Saudi Arabia's sovereign wealth fund – prompting the judge to step in and ask whether a specific dollar amount, rather than concepts, were discussed."Not a specific number," Musk said Tuesday. Musk thought a handshake deal meant Saudi Arabia's sovereign wealth fund would back taking Tesla privateYasir Al-Rumayyan, who is the governor of the $620 billion wealth fund, is a central figure in the ongoing trial. Musk thought a handshake with Al-Rumayyan meant the Saudi fund was willing to give him the necessary backing to take Tesla private, he told the court Monday."A signed document is neither here nor there," he said. "If they say they're going to do something, they do it."Musk described Al-Rumayyan as "ass-covering" in later texts backpedaling on the movePrivate texts disclosed in previous court filings show Musk slamming Al-Rumayyan for backing away from the deal. The Tesla boss described the PIF governor saying there had been no signed deal as "ass-covering, for lack of a better word".Musk planned to sell SpaceX stock when he said he had "funding secured"The Tesla CEO said he counted on selling stock in the space technology company to take the carmaker private in 2018. He compared the potential sale to his recent offloading of Tesla shares to fund his $44 billion deal to buy Twitter."SpaceX stock alone meant 'funding secured' by itself," he told lawyers in cross-examination Monday. "It's not that I want to sell SpaceX stock, but I could have, and if you look at the Twitter transaction — that is what I did."Google wanted to purchase TeslaTech giant Google had previously had a "standing interest" in buying the electric-vehicle maker, which encouraged him to try taking the company private with Saudi funds, Musk testified. He pointed to the interest from Google's parent Alphabet laid down in an earlier deposition.There's a reason Musk wanted to take Tesla private at $420 a shareThe $420 price wasn't a marijuana reference meant for entertain his then-girlfriend Grimes, Musk said, but a 20% premium on Tesla's stock at the time. But he did say the number has some significance."There is some, I think, karma around 420," he told the court. "I should question whether that is good or bad karma at this point."Musk sought out advice from Dell's founder as he considered selling TeslaMichael Dell, who took his own tech company private in 2013, was "unequivocal" that privatizing Tesla was a good idea, according to Musk. He also said he'd discussed the buyout at a dinner with Oracle co-founder Larry Ellison in 2017.Musk really dislikes short-sellersIn testimony on Friday, the billionaire called for a ban on short-selling, which is when investors make a bet that an asset will fall to a lower price."I believe short-selling should be made illegal," he said. "It is a means for, in my opinion, bad people on Wall Street to steal money from small investors. Not good."Musk doesn't think Tesla shareholders want him to leave TwitterIn October 2018, billionaire Tesla shareholder Ron Baron said investors would benefit from Musk tweeting less. Musk said that referenced his string of controversial comments on current affairs, rather than tweets about Tesla itself.  "He's not saying 'don't use Twitter'," Musk said Friday. "He's saying I shouldn't respond to criticism in the news on Twitter."But Musk doesn't believe his own tweets ever affect Tesla's share price: Musk is one of the most active CEOs on Twitter – and in October he took the social-media company private in a chaotic takeover deal. But he doesn't believe that his tweets actually move markets."Just because I tweet something does not mean people believe it or will act accordingly," he said Friday.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 25th, 2023

A bullish trifecta of stock market indicators is flashing, and it suggests a 20% rally is on the horizon, Fundstrat"s Tom Lee says

The trio of bullish indicators combined with falling inflation mean stocks are poised to rally through 2023, Fundstrat's Tom Lee said. Photo by Spencer Platt/Getty Images There are three stock market indicators that are flashing a bullish signal, according to Fundstrat's Tom Lee. Lee pointed to the uptick in market breadth, a measure of winning stocks, in three separate gauges of the S&P 500. When those indicators flash simultaneously, it's a reliable sign of a future rally, and stocks could gain 20% this year, he said. A bullish trifecta of stock market indicators are flashing, and it's a reliable signal that a 20% rally in stocks could be on the horizon, according to Fundstrat's head of research Tom Lee.Lee pointed to the surge in market breadth in the S&P 500, a measure of how many stocks are gaining at once. In particular, there are three separate breadth gauges are showing an uptick in winning stocks: the Whaley Breadth Thrust, the Walter Deemer Breakaway Momentum, the Triple 70 Thrust.These technical gauges have good track records in predicting a major rally in stocks, especially when they occur simultaneously. When at least two of those gauges are showing rising market breadth, the S&P 500 gains on average 24% over the next year, according to Fundstrat.But the current market shows an even more positive outlook, since all three indicators are flashing. It's the only time all three breadth indicators have flashed since 1970 – an "unprecedented trifecta," market research firm Quantifiable Edges said in a recent note.And it's a strong suggestion that a huge rally could be in the works, particularly as inflation eases and the Federal Reserve begins to pull back on its monetary tightening efforts."The recovery in market breadth is a sign that demand for equities is recovering. We know investors are not 'risk-on' coming in 2023," Lee said. "This all supports stocks strengthening in 2023."Lee has said he believes investors are in for at least a 20% rally in the S&P 500 this year, as it's uncommon for the S&P 500 to have flat or negative returns after a losing the previous year. Since 1950, the stock index has risen more than 20% after a negative year 53% of the time. Inflation, a major headwind for stocks in 2022, has also cooled from a 41-year-record, suggesting the Fed can hit pause on raising interest rates, and possibly even start cutting in 2023. "We think 2023 is arguably more akin to 1982, when stocks went nearly vertical," Lee said.His outlook is counter to that of many other Wall Street strategists. Bank of America, Deutsche Bank, and Morgan Stanley have predicted a 20%-25% decline in the S&P 500 in the first half of the year. A veteran investment chief from Gateway Capital told Insider this week that stocks could crash in 2023, as structural changes in the economy mean the "bull market cocktail" is over.Read the original article on Business Insider.....»»

Category: smallbizSource: nytJan 25th, 2023

Futures Slide On Ugly Microsoft Outlook, Renewed War Escalation Fears

Futures Slide On Ugly Microsoft Outlook, Renewed War Escalation Fears US equity futures slumped on Wednesday after Microsoft started off the tech giants' earnings parade by pulling off the old pump and dump, first jumping on Azure/Cloud results which beat estimates, but then erasing all gains and slumping during the company's conference call after the company's guidance disappointed, forecasting slower earnings and weaker demand (separately, hours later customers reported difficulties across multiple regions in accessing Microsoft 365 services, which the company attributed to networking issues). Earnings reports from companies such 3M, Boeing and chipmaker Texas Instruments also reinforced concerns about the health of corporate America and added to investors’ jitters as they await updates from the likes of Tesla and IBM. Fears also grew that a decision to send German and US tanks to Ukraine would provoke an escalation in the war. As a result, contracts on the tech-heavy Nasdaq fell 1.3% at 7:15 a.m. ET while S&P 500 futures dropped 0.8%, and traded right around 4,000. The Bloomberg Dollar Spot Index was little changed, leading to mixed trading in Group-of-10 currencies. Treasuries edged higher, mirroring gains in most UK and German government bonds. Brent crude was little changed, while gold and Bitcoin fell. In premarket trading, all eyes were on Microsoft which fell after saying revenue growth in its Azure cloud-computing business will decelerate in the current period and warned of a further slowdown in corporate software sales. Amazon and Alphabet also fell in sympathy, dragging other cloud stocks lower (Amazon.com -1.6% and Alphabet -1.1%; Snowflake -3.1%, Datadog -4.0%, Adobe  -1.4). Texas Instruments suffered its first sales decline since 2020 and gave a tepid forecast for the current quarter. Microsoft comprises about 12% of the Nasdaq 100, while Texas Instruments has a weighting of 1.4%. Here are other notable premarket movers: Enphase Energy (ENPH US) declines 4% after it was cut to neutral from overweight at Piper Sandler as demand for residential solar loans dipped more than the broker expected. Precigen (PGEN US) drops 16% after an offering of shares priced at $1.75 apiece, representing a 20% discount to the last close. Proceeds to be used to fund the development of product candidates and for other general corporate purposes. Block (SQ US) declines 4% as Oppenheimer cuts the stock to market perform from outperform, saying the firm looks less defensively-positioned than other payments names. Intuitive Surgical’s (ISRG US) falls 8.9% as the medical tech firm’s quarterly results are overshadowed by the company saying it won’t launch a new multiport robotic system in FY23, which analysts say removes a positive catalyst for the stock. Capital One’s (COF US) slumps 3.3% following the release of results. Its earnings slightly missed expectations and analysts flag a quicker-than-expected acceleration in net charge-offs for the company. Keep an eye on Stryker (SYK US) as it was initiated by KeyBanc at sector weight, which says the US med-tech firm’s valuation “reflects an above-average growth rate with some risk of mean reversion over time.” A weak earnings outlook, fears of US recession as well as the potential escalation in the Ukraine-Russia war were all contributing to the market pullback, according to Kenneth Broux, a strategist at Societe Generale. “The market is definitely worried about slowing earnings growth especially on tech, so there has been a sense the market wants to keep selling tech and the dollar,” Broux said. “But a huge tail risk now is what happens in Ukraine, if there is an escalation in the conflict and Europe gets drawn into the conflict.” While today's drop will hurt, the Nasdaq 100 Index has surged 8.3% this year, on track for the best January since 2019. Expectations that the Federal Reserve will soon pivot away from its hawkish policy have aided the rally, though strategists are increasingly preferring non-US equities this year as they hunt for cheaper valuations and grow concerned about a US recession. Investors are now parsing earnings statements for the impact of the economic slowdown on results. “The main focus is clearly on US big tech,” said Fabio Caldato, a partner at Olympia Wealth Management. “How can those bulls in a China shop reassure the financial community? Just showing growth. We remain very cautious on this aspect and prefer to underweight the whole sector.” Next, all eyes will be on Tesla when the electric-car maker reports results after the market closes on Wednesday. Investors will focus on demand, profitability and 2023’s expected pace of deliveries. They are also keen to learn whether Chief Executive Officer Elon Musk will name a new CEO of Twitter. In Europe, the Stoxx 600 was down 0.6% and on course for its first back-to-back declines of the year. Shares in major European software firms such as SAP SE and Sage Group Plc. feeling the heat from Microsoft and Dutch chip-tool maker ASML Holding NV falling after posting a profit miss. Here are the most notable European movers: EasyJet shares rise as much as 12% after the budget carrier reported 1Q revenue that was 8% ahead of consensus and projected strong trends will continue into the second quarter Aviva shares gain as much as 3.5%, the most since October, with JPMorgan saying the general insurance underwriting update from the group will provide some reassurance Caverion shares rise as much as 4.1% after the Bain-led consortium increased its offer for the Finnish building-maintenance-services firm following a rival bid from private equity firm Triton Hill & Smith rises as much as 2.2% after delivering an unscheduled trading update guiding to operating profit above expectations, which Jefferies describes as “pleasing to read” ASML shares fall as much as 2.3%, trimming a recent rally, after the Dutch chip-tool giant’s profitability target missed higher Street expectations despite its bullish sales growth forecast for 2023 Netcompany shares plunge as much as 23%, the most on record, after the Danish IT consultant’s Ebitda margin guidance for 2023 missed expectations Aroundtown shares dropped as much as 7.4% after Societe Generale cut its recommendation to sell from buy as part of a more cautious view on REITs Gjensidige shares fall as much as 9.9% with analysts saying the Norwegian insurer’s results were weak across the board and that the lack of a special dividend will disappoint Earlier in the session, Asian stocks headed for a fourth straight daily gain as tech stocks rose amid lighter trading volumes and holidays in China and Hong Kong. The MSCI Asia Pacific Index advanced as much as 0.4% to its highest since early June. Samsung Electronics and SK Hynix were among the biggest contributors to the gauge’s advance as Korea traders returned from the Lunar New Year holidays. “With the global growth outlook narrative shifting more toward a soft landing rather than recession, we are seeing the tech sector come back in favor for now,” said Charu Chanana, strategist at Saxo Capital Markets. “But caution is warranted as inflation risks are back on the horizon with China’s reopening.”  Tech investors also assessed Microsoft’s second-quarter earnings release, which showed profit beat estimates although the company gave a downbeat revenue forecast. Traders are now turning their attention to Tesla’s result announcement later Wednesday. Singapore stocks led gains in Asia Pacific alongside their South Korean peers. Japanese stocks rose as investors continued to assess the overall economy and shifted their focus to upcoming earnings. The Topix rose 0.4% to 1,980.69 at the close in Tokyo, while the Nikkei advanced 0.4% to 27,395.01. The yen weakened 0.2% to 130.44 per dollar. Keyence contributed the most to the Topix’s gain, increasing 1.7%. Out of 2,161 stocks in the index, 1,342 rose and 699 fell, while 120 were unchanged.  “Global economic recession risk has declined sharply as China and Europe demand is expected to improve this year,” said Daniel Yoo, head of global asset allocation at Yuanta Securities Korea. “Overall tech demand including capex investments of global corporations isn’t slowing down much.” Stocks in India fell ahead of the expiry of monthly derivative contracts on Wednesday. Adani Group shares were among major decliners after activist investor Hindenburg Research shorted the group. The S&P BSE Sensex slid 0.9% to 60,404.47, as of 11:09 a.m. in Mumbai, while the NSE Nifty 50 Index declined 1%. All but one of BSE Ltd.’s 20 sector sub-indexes declined, led by a gauge of service industry stocks.  HDFC Bank contributed the most to the Sensex’s decline, decreasing 1.8%. All but three of 30 shares in the Sensex dropped.  All stocks controlled by Adani Group fell after Hindenburg Research accused firms owned by Asia’s richest man of “brazen” market manipulation and accounting fraud. Representatives for the Adani Group didn’t immediately respond to calls and emails seeking comment, saying the company would issue a statement in response later. Meanwhile, Australian stocks dropped after data showed that domestic inflation accelerated to the fastest pace in 32 years in the final three months of 2022. Trading volumes have been light in Asia this week as markets in China, Hong Kong, Taiwan and Vietnam remain closed for the new-year break. A blackout period on communications ahead of the Federal Open Market Committee’s policy meeting next week has supported risk appetite, with the MSCI Asia gauge up about 25% from an October low In FX, the Bloomberg Dollar Index was little changed even as the greenback advanced against most of its Group-of-10 peers, with notable outperformance in the Aussie dollar after CPI surprised to the upside. Kiwi dollar is the weakest among the G-10’s. The pound fell for a third day and gilts rose, led by the belly, after data showed UK factories’ fuel and raw material costs rose at the slowest pace in almost a year. Input prices rose 16.5% in December from a year ago, down from a peak of 24.6% in June. Money markets went to fully price in a 25-basis point rate cut by the Bank of England before the end of the year The euro fell a first day in six against the US dollar, though moves were limited to a narrow range. Bunds advanced, outperforming Italian notes. The Canadian dollar was little changed while overnight volatility in dollar- loonie rose to its highest level since Jan. 12 as traders position for the Bank of Canada policy decision. The implied breakeven of around 84 pips may be understating the possibility of outsized swings in the pair. Australian dollar rose against all of its G-10 peers, to trade at the highest level since August versus the greenback, and the nation’s bonds tumbled after 4Q inflation accelerated to the fastest pace in 32 years in the final three months of 2022. The outcome of 7.8% from a year earlier exceeded forecasts of 7.6% and prompted money markets to price in an interest-rate hike at next month’s central bank meeting. Kiwi dollar was the worst G-10 performer as New Zealand inflation held near three-decade high at 7.2% but undershoot RBNZ’s forecast. In rates, the risk-averse tone benefited bonds, with UK and German 10-year yields falling by 8bps and 6bps respectively. Treasuries also rose as the Treasury curve bull-flattened modestly and as futures extending through Tuesday’s highs, following wider gains across gilts after soft UK factory price inflation data.  Treasury yields richer by around 2bp from belly out to long-end with 10-year at 3.42%, lagging gilts by almost 4bp in the sector after sharp rally across UK bonds. The US auction cycle resumes at 1pm with $43b 5-year sale, before Thursday’s $35b 7-year notes; strong 2- year auction Tuesday traded through the WI by 1.3bp. In commodities, oil prices are little changed with WTI hovering around $80.10. Spot gold falls roughly 0.6% to trade near $1,926/oz Bitcoin is back below the USD 23k mark, though remains just above the WTD trough set on Monday at USD 22.3k. On today's calendar, we get data on US mortgage application (up 7.0%, vs up 27.9% last week). The EIA will release figures on oil inventories at 10:30 a.m. The US will sell $24 billion of two-year floating-rate notes and $36 billion of 17-week bills at 11:30 a.m., followed by $43 billion of five-year notes at 1 p.m. From central banks, the main highlight will be the Bank of Canada’s latest policy decision. Finally, earnings releases include Tesla, Boeing, IBM, AT&T and Abbott Laboratories. Market Snapshot S&P 500 futures down 0.5% to 4,011.25 MXAP up 0.3% to 169.09 MXAPJ up 0.2% to 553.07 Nikkei up 0.4% to 27,395.01 Topix up 0.4% to 1,980.69 Hang Seng Index up 1.8% to 22,044.65 Shanghai Composite up 0.8% to 3,264.81 Sensex down 1.3% to 60,174.06 Australia S&P/ASX 200 down 0.3% to 7,468.30 Kospi up 1.4% to 2,428.57 STOXX Europe 600 down 0.3% to 451.94 German 10Y yield little changed at 2.11% Euro little changed at $1.0884 Brent Futures up 0.5% to $86.56/bbl Gold spot down 0.3% to $1,930.94 U.S. Dollar Index little changed at 101.93 Top Overnight News from Bloomberg A gauge of German business expectations by the Ifo institute rose to 86.4 in January from 83.2 the previous month. That’s the fourth consecutive improvement and a bigger increase than economists had anticipated. A measure of current conditions slipped, however European natural gas headed for a third day of declines as ample supplies and reserves, along with the return of milder weather, help to ease the region’s energy crisis With the Federal Reserve’s Feb. 1 interest-rate decision a week away, traders in the options market are contemplating a scenario in which the rate hike it’s expected to deliver ends up being the last one of the tightening cycle Japan’s broken bond market continued to throw up anomalies with central bank ownership of some government debt exceeding the amount outstanding, according to its latest data Japan’s government cut its monthly view of the economy for the first time since February 2022, reflecting gathering concerns over the outlook for the global economy A More detailed look at global markets courtesy of Newsquawk APAC stocks were mixed after the indecisive performance stateside owing to the varied data releases and geopolitical tensions, while the region also digested firmer-than-expected inflation data from Australia and New Zealand. ASX 200 failed to sustain an initial foray above 7,500 with the index subdued by hot CPI data which printed its highest since 1990 and boosted the market pricing for the RBA to continue with its hiking cycle next month. Nikkei 225 gradually edged higher with trade uneventful in the absence of any pertinent drivers although Dai Nippon Printing outperformed after Elliot Management built a stake in the Co. of slightly under 5%. KOSPI was among the biggest gainers on return from the Lunar New Year holiday with the index also driven by strength in top-weighted stock Samsung Electronics. Top Asian News US Secretary of State Blinken is likely to warn China against aiding Russia when visiting Beijing, according to SCMP. Australian PM Albanese said there is increased engagement at different levels between Australian and Chinese agencies, according to Reuters. North Korea ordered a 5-day lockdown of its capital Pyongyang due to increasing cases of an unspecified respiratory illness, according to South Korean-based NK News. Japan lowers its overall economic view in January; first time in 11 months. Japanese Gov't official, citing BoJ's Kuroda, says the BoJ will resolutely keep monetary environment easy; BoJ aims to regain market functionality by tweaking YCC operations and maintaining an easy monetary environment. European bourses are pressured across the board, Euro Stoxx 50 -0.6%, after a sluggish post-MSFT start to the session and thereafter a further waning in the general risk tone. Within Europe, a strong update from ASML has been overshadowed by the MSFT pressure, while the likes of Ryanair and IAG are buoyed by easyJet. Stateside, futures are all in the red with the NQ -1.2% lagging and the ES Mar'23 below 4k and its 200-DMA at 3999, to a 3996.5 session trough. NYSE said it is thoroughly examining the glitch and that the exchange ended Tuesday with a normal close, while a regular open is expected on Wednesday, according to Reuters. Top European News German Economy Minister sees 2023 German GDP at 0.2% (vs -0.4% in Autumn forecast); 2023 inflation seen at 6% (vs prev. 7%); "we do not see signs of marked recession as feared by many observers". In-fitting with earlier reports via the likes of Bloomberg and Reuters in recent sessions. French Regulator Set to Provisionally Close Government EDF Offer Traders Reverse Course to Bet BOE Will Cut Rates Before Year-End UK’s Growth Potential Falls, Reducing Hunt’s Room for Tax Cuts Renault Gets Two Upgrades, Shares Rise as Nissan Deal Nears Ukraine Latest: Allies to Send Tanks; Kishida Pressed to Visit UK Parliament Seeks Power to Scrutinize Finance Regulators Notable US Headlines US House Speaker McCarthy said they need to have a responsible debt ceiling and called for eliminating wasteful spending, while he added debt is the greatest threat to the nation and that President Biden needs to stop playing politics on the debt ceiling. US President Biden is close to naming the next National Economic Council head, Fed Vice Chair Brainard has emerged as the top contender, according to Washington Post sources; current NEC Director Deese is expected to leave soon, no decision made yet. US Senator Manchin is to reportedly introduce a bill to delay EV tax credit due to disagreements over how to implement the programme, according to WSJ. FX The DXY has spent the morning in close proximity to the 102.00 mark and has most recently extended to fresh session highs of 102.12 amid a general decline in the risk tone. AUD is the standout outperformer after much hotter-than-expected CPI while the NZD was only able to derive fleeting support from its own inflation data, at best AUD/USD and NZD/USD above 0.71 and 0.65 respectively. JPY has settled down somewhat after Tuesday's pronounced action and was relatively resilient to Japan downgrading its economic assessment for the first time in almost a year. The aforementioned decline in sentiment that bolstered the USD did so at the expense of Cable and EUR/USD which moved below and further below 1.23 and 1.09 respectively. Fixed Income Core EGBs have continued to extend with the Bund comfortably above 139.00, though the upside seemingly stalled after a brief breach of Fib resistance. An easing/pullback that was perhaps spurred by mixed German auction results; though, benchmarks remain elevated overall with Gilts once again outperforming and closer to 106.00 vs 105.08 low (current high 105.79). Stateside, USTs are firmer though lagging their EZ peers a touch ahead of a USD 43bln 5yr outing. Commodities WTI and Brent front-month futures trade with no firm direction in early European hours, similar to yesterday’s price action, as market participants await the next catalyst for the complex. US Energy Inventory Data (bbls): Crude +3.4mln (exp. +1.0mln), Cushing +3.9mln, Gasoline +0.6mln (exp. +1.8mln), Distillate -1.9mln (exp. -1.1mln) US Treasury issued a license allowing Trinidad and Tobago to develop Venezuela's Dragon offshore gas field. Spot gold and base metals have been impacted by the general risk tone with the yellow metal unable to glean any haven support as the USD remains firm. Geopolitics Ukrainian President Zelensky said Russia is readying for new aggression and that Ukraine will prevent further Russian actions, while he added Russia is intensifying its offensive towards Ukraine's Bakhmut. Russian Ambassador to the US said Washington's possible deliveries of tanks to Ukraine would be a blatant provocation and it is clear Washington is trying to inflict a strategic defeat on us, according to Reuters. EU ambassadors have now formally given green light to roll over all the EU’s economic sanctions on Russia for an additional six months, via Radio Free Europe's Jozwiak. German government is to send Leopard 2 tanks to Ukraine, Germany is to approve re-export of Leopard 2 tanks. US Event Calendar 7am: U.S. MBA Mortgage Applications, 7.0%, prior 27.9% DB's Jim Reid concludes the overnight wrap There’s been a little bit of a bias towards risk-off sentiment over the last 24 hours, thanks partly to some weaker-than-expected earnings releases that added to growing concerns about a potential US recession. The S&P 500 (-0.07%) came off its 7-week high from the previous day, oil prices took a sharp turn lower, and sovereign bonds rallied on both sides of the Atlantic. After the close, Microsoft did report better-than-expected earnings due to strength from their cloud-services business (Azure) even as their consumer businesses faltered. Their shares initially traded 4.5% higher before reverting late last night and are now down -1% in after-market trading after news came out during the earnings call that Azure sales could slow in Q1. S&P and NASDAQ futures are -0.46% and -0.78% down respectively as I type. Those small equity losses in the normal trading session came as the flash PMIs for the US showed the economy still in contractionary territory at the start of the year. To be fair, the numbers were a bit better than expected, but even with the upside surprise the composite PMI was only at 46.6 (vs. 46.4 expected), which is its 7th consecutive month beneath the expansionary 50-mark. Looking at the details, the US PMIs also showed that input price rises had increased in January after 7 months of moderating, so that adds to some other indicators so far this quarter suggesting price pressures might be a bit more resilient than thought. The more negative tone from the data was then cemented by the Richmond Fed’s manufacturing index, which came in at a post-Covid low of -11 (vs. -5 expected). Although the US numbers continued to point towards contraction, there was some better news from the Euro Area as the flash composite PMI came in at 50.2 (vs. 49.8 expected). That’s the first time it’s been above 50 since June, and came amidst upside surprises in both the services (50.7 vs. 50.1 expected) and manufacturing PMIs (48.8 vs. 48.5 expected) as well. The readings offer yet more evidence that the European economy has been faring better over recent months, echoing the rise in consumer confidence we saw the previous day. With all this positive news out of Europe lately, our economists updated their forecasts yesterday (link here) and are no longer expecting a recession in 2023 as flagged in our German upgrade two weeks ago. That comes amidst falling gas prices, lower inflation, and declining uncertainty, which means our economists now expect the Euro Area to grow by +0.5% in 2023. They’ve also lowered their headline inflation outlook for 2023 to 5.8%, and now see 2024 at just 1.8%. Nevertheless, they don’t think the ECB can take their foot off the hawkish pedal just yet, since an improved growth outlook and stronger domestic demand raises the threat of more persistent underlying inflation. Speaking of the ECB, yesterday saw a fresh round of commentary as the Governing Council debate how long to keep hiking rates by 50bps. On the one hand, Lithuania’s Simkus said that “there’s a strong case for staying on the course that’s been set for the coming meetings of 50 basis-point increases.” However the Executive Board’s Pannetta, one of the biggest doves on the council, said that beyond the next meeting in February “any unconditional guidance … would depart from our data-driven approach”. For now, investors are continuing to price in two 50bp moves as the most likely outcome, with +92.1bps worth of hikes priced over the next couple of meetings. As this debate was ongoing, sovereign bonds rallied strongly on both sides of the Atlantic, with yields on 10yr Treasuries down -5.7bps to 3.45%. That was led by a sharp decline in real yields, which fell -7.6bps on the day. However, near-term policy expectations from the Fed were little changed ahead of their meeting a week from today, and the terminal rate priced for June was down just -0.1bps, whilst the 2yr Treasury yield fell -1.7bps to 4.21%. In Asia 10yr Treasury yields have moved back +1.29bps higher as we go to press. Back to yesterday, and there was a stronger rally in Europe, with yields on 10yr bunds (-5.1bps), OATs (-6.9bps) and BTPs (-11.1bps) all seeing a sharp decline. As mentioned at the top, it was a bit of a battle for equities, with the major indices struggling to gain much traction after their recent rally. That left both the S&P 500 (-0.07%) and Europe’s STOXX 600 (-0.24%) with modest declines, although that was partly down to a drag from energy stocks after prices took a significant hit yesterday. For instance, Brent crude oil prices (-2.34%) had their worst day in nearly three weeks, falling to $86.13/bbl, whilst natural gas prices in Europe fell -11.71% to €58.27 per megawatt-hour as they closed in on the lows from last week. In the US, one of the worst performing industries for the S&P was Media & Entertainment (-1.02%), whose losses were partially due to the -2.09% pullback by Alphabet as the US Department of Justice did indeed sue the ad-giant under US anti-trust laws. This is the second such suit and a resolution could take years according to legal experts cited by Bloomberg. Asian equity markets are continuing with their winning streak even with US futures lower. As I type, the KOSPI (+1.27%) is surging as trading has resumed after the Lunar New year holiday while the Nikkei (+0.43%) has rebounded after opening lower in morning trade. Markets in China and Hong Kong remain closed for the holidays. Elsewhere, the S&P/ASX 200 (-0.12%) is in negative territory following disappointing inflation data out from Australia. Australian inflation rose to +8.4% y/y in December from +7.3% in November while surpassing market expectations for a rise of 7.7%. With inflation pressures broadening, its implication for policy rates pushed 10yr bond yields sharply higher (+5.2 bps) to settle at 3.52%, as we go to print. Meanwhile, the Australian dollar (+0.75%) is trading higher, hitting a 5-month high against the US dollar to trade at $0.7099. Back to yesterday's data, and the flash PMI releases were the main data highlight, but we did also get the UK’s public finance statistics for December. That showed public sector net borrowing (ex-banking groups) at £27.4bn (vs. £17.3bn expected), which was driven by more spending on energy support along with higher debt interest. Meanwhile, the latest flash PMIs from the UK weren’t as optimistic as their counterparts in the Euro Area, with the composite PMI falling to 47.8 (vs. 48.8 expected). That’s the lowest reading on that measure in two years, back when the economy went into lockdown again at the start of 2021. To the day ahead now, and data releases include the Ifo’s business climate indicator for January from Germany. From central banks, the main highlight will be the Bank of Canada’s latest policy decision. Finally, earnings releases include Tesla, Boeing, IBM, AT&T and Abbott Laboratories. Tyler Durden Wed, 01/25/2023 - 07:55.....»»

Category: blogSource: zerohedgeJan 25th, 2023

Will China "Revenge Spending" Follow $2.6 Trillion Rise In Savings?

Will China 'Revenge Spending' Follow $2.6 Trillion Rise In Savings? After a tough 2022, China's economy is poised for growth - as households are now sitting atop the biggest pool of new savings in history - having deposited $2.6tn in 2022. The bull case revolves around the notion of 'revenge spending' - an anticipated wave of pent-up demand fueled as consumers open their wallets for the first time in years. Last week the IMF indicated that it would upgrade its global economic forecasts based on China's reopening following three years of zero-Covid, while Morgan Stanley points to "sizeable excess household savings" to underpin their bull case. Economists at Morgan Stanley recently forecast that China’s economic growth would be more front-loaded this year, “mainly supported by consumption amid excess savings, improving household balance sheets . . . and recovery in the job market and income expectations”. They point to “sizeable excess household savings” of Rmb3tn to Rmb4tn built up “from an inability to spend amid Covid restrictions and/or precautionary savings”. -FT The bear (or at least less-bullish) case Tempering expectations, however, both the Wall Street Journal and the Financial Times have their doubts over the level of 'revenge spending' in store. "There’s overestimation on the splash of Chinese consumers," said Alicia García-Herrero, chief Asia Pacific economist at French investment bank Natixis in a comment to the Times. "The excess savings won’t be easily spent." The WSJ, meanwhile, suggests that "Several key pillars of China’s labor market—exports, the internet technology sector and the housing market—still face structural or cyclical headwinds. And finally, financial conditions remain relatively tight: Overall credit growth in December was weak, and bond yields and money-market rates have risen in recent weeks." All of this means that while Chinese “revenge spending” will give a jolt to the economy this year, those expecting a U.S. 2021-style consumption bacchanalia might be disappointed. -WSJ Also in the bear camp is analyst Lin Qingqi of state-run China International Capital Corp, who says that the "excess" savings in 2022 was more due to cautious households redeploying riskier investments - pulling cash out of underperforming equities and stashing it in the bank. Luo Zhiheng, Yuekai Securities chief economist, has a similar prediction - and expects that some savings will be redeployed in "revenge spending," but that "There’s still lingering uncertainty on the economic outlook, and people have a strong desire to save." "China needs a strong force to drag the economy out from the vicious circle of weak demand and low expectation of income growth," said Zhang Jun, dean of the School of Economics at Fudan University. "If that can’t [come from] exports in 2023, then fiscal stimulus such as strong government spending should step up and be that force." Tyler Durden Tue, 01/24/2023 - 23:45.....»»

Category: blogSource: zerohedgeJan 25th, 2023

I just got laid off from Google by email. The "cold" and "inhuman" way they treated employees is why I"m not going to reapply.

On Friday, Google sent a memo to 12,000 employees informing them that their roles were eliminated. It follows layoffs from other big tech companies. Google laid off 12,000 workers on Friday following mass job cuts from Amazon and Microsoft.Beata Zawrzel/NurPhoto via Getty Images Google laid off 12,000 employees following cuts from other tech giants like Amazon and Microsoft.  Insider spoke with one laid-off software engineer who requested anonymity to protect his career. He said the way Google conveyed the layoff felt inhuman. Read his story as told to Samantha Delouya.  This as-told-to essay is based on a conversation with a Google employee included in the company's 12,000-person layoff announced last Friday. He spoke on condition of anonymity to protect his career, but Insider has verified his identity and former employment. The conversation has been edited for length and clarity.I discovered I had lost my software engineer job at Google when I woke up on Friday morning and checked my phone. In my personal inbox, I saw something about "your role at Google." Then I saw the word "unfortunately" in the first line and knew I got laid off. I didn't even finish reading the email. The way it was handled felt coldI was shocked because I never expected Google to do something like this. The way they conveyed the layoff over email was really inhuman. I worked at Google for a little more than a year and really liked my job. For a software engineer, Google is a dream job. But seeing them treat their employees in such a way, even after we endured such hard job interviews to get into the company, it just feels really cold. The layoffs seemed randomSurprisingly, there were no signs that layoffs were coming. I'm kind of impressed with how they managed to keep the layoffs under wraps until the day they were announced. Everyone I spoke to was really shocked by who got laid off. It's clear it wasn't performance-based because Google has a rating system, and I performed in the top 18% of employees. It wasn't based on tenure, either. I guess they just decided to cut off entire teams. I am on a student visa, and getting laid off puts me in a tough spot. I have to find a job in a limited amount of time because I have to undergo the H-1B lottery process. I don't have much time to find a new job before the March 1 application due date, so I may have to wait for next year. I only have 1 attempt left at H-1B, and if I don't get accepted, I'll have to leave the US entirely. I'm not reapplying to Google anytime soonIt will be especially tough to find a job since Amazon, Meta, and other big tech companies have had layoffs, so there are a lot of unemployed, highly skilled workers out there, and there are a limited number of open jobs. It all feels surreal because Google is still hiring right now. The worst part is that the employees who have been laid off are not given the option to move internally into those roles, unlike at Amazon or Meta. We have to apply externally, and we'll be treated like external candidates, even after contributing so much to Google. That's the part that hurts the most. I think it's bull****. Even though I need a job, I'm not going to apply for another role at Google in the near future. I don't really like the way they treat their employees. Why would I apply to Google as an external candidate and get a lowball offer for a similar role to the one I just had a few days ago? It doesn't make any sense. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 24th, 2023

Jeremy Grantham Doubles Down On Market Apocalypse, Warns Of 17% Crash, Doesn"t Rule Out "Brutal Decline" To 2,000

Jeremy Grantham Doubles Down On Market Apocalypse, Warns Of 17% Crash, Doesn't Rule Out "Brutal Decline" To 2,000 It was several years ago when Jeremy Grantham quietly turned from stock bull to vocal permabear, and while his market notes turned breathlessly alarmist (if only to those who were long his multi-billion fund GMO), such as this from June 2020 "Stock-market legend who called 3 financial bubbles says this one is the ‘Real McCoy,’ this is ‘crazy stuff’", it wasn't until early 2021 that Grantham's warnings of an imminent crash became especially shrill... and wrong. Recall, back in January 2021, Grantham wrote that "Bursting Of This "Great, Epic Bubble" Will Be "Most Important Investing Event Of Your Lives", while was followed by warnings of a "Spectacular" Crash In "The Next Few Months." Needless to say, no crash followed as the Fed and other central banks went all in on stabilizing the market, resulting in an epic year for risk assets which closed 2021 at all time highs, while GMO suffered not only steep losses but also substantial redemptions, a humiliating outcome for Grantham who had previously called the bursting of both the dot com and housing bubbles, but failed to account for just how determined the Fed is to avoid another bubble bursting. Grantham then tried his market-timing luck once more, this time with somewhat better results, when in January 2022 he doubled down on the fire and brimstone. The GMO founder revisited a familiar theme, namely that we are currently living in a superbubble - only the fourth of the past century - and like the crash of 1929, the dot-com bust of 2000 and the financial crisis of 2008, Grantham was  "nearly certain" the bursting of this bubble has begun, sending indexes back to statistical norms and possibly further. How much lower? The value manager saw the S&P tumbling by nearly 50% to 2,500 from its then recent all time highs of 4,800 weeks ago (he appears to enjoy forecasting 50% drops as will apparent in a second). He also predicted that the Nasdaq Composite will sustain an even bigger correction. “I wasn’t quite as certain about this bubble a year ago as I had been about the tech bubble of 2000, or as I had been in Japan, or as I had been in the housing bubble of 2007,” Grantham told Bloomberg in a “Front Row” interview last January. “I felt highly likely, but perhaps not nearly certain. Today, I feel it is just about nearly certain.” Well, maybe not that certain, because one year later stocks did drop, but nowhere nearly as much as Grantham predicted, with the S&P sliding 20% in 2022 and the Nasdaq losing a third. Hardly the catastrophic bursting of a superbubble which has inflated stock prices by order of magnitude. But with Grantham, now 84 and eager to make at least one more historic call before his career is over, is not giving up and in a new paper published today titled "After a Timeout, Back to the Meat Grinder!", the value investor is doubling down on his call from last January (and January 2021... and June 2020), and warns - again - that the popping of the bubble in US stocks is far from over and investors shouldn’t get too excited about the strong start to the year for the market. According to Grantham, the value of the S&P 500 at the end of the year should be about 3,200, which in retrospect is well above his previous bubble-bursting forecast of 2,500.  That equals a 17% full-year drop and a 20% decline for the year from current levels. Not satisfied with his bearish forecast, Grantham hopes to outbear the likes of Mike Wilson, and believes the index is likely to spend some time below that level during 2023, including around 3,000. “The range of problems is greater than it usually is — maybe as great as I’ve ever seen,” Grantham told Bloomberg in an interview from Boston. “There are more things that can go wrong than there are that can go right,” he added. “There’s a definite chance that things could go wrong and that we could have basically the system start to go completely wrong on a global basis.” Grantham, who is desperate to eventually "nail the crash" as the biggest bear, is also quietly doubling down on his apocalyptic call from a year ago and said he doesn’t discount the idea that the benchmark index could fall to around 2,000, a 50% drop from the current price, which he says would be a “brutal decline." He is, of course, right... if the Fed were to ever allow that to happen. The problem is that Powell would step in long before the S&P dropped anywhere near there and would instruct Blackrock to buy any and all ETFs. Meanwhile, the only brutality has been the collapse in GMO's assets which had been cut by half since 2015 through the end of 2020, as the fund kept doubling down incorrectly on ever more bearish scenarios. The irony, of course, is that if Grantham is - finally - correct, it will only force Powell to exit from his "Fed put" hibernation and start bidding up risk assets, thus leading to even more pain for bears. Beside Grantham's bearishness, GMO - which is a value fund - has struggled with lackluster returns in the decade following the global financial crisis as growth stocks led the longest bull market in US stocks on record. But now, as the Federal Reserve tries to tame elevated inflation with aggressive interest-rate increases, value strategies are enjoying a revival. The GMO Equity Dislocation Strategy, which is long value equities and short those the company sees as being valued at “implausible growth expectations,” had gained nearly 15% last year through November; alas it has to more than double to regain its lost AUM. Value has worked “quite a lot better” over the past year and has outperformed growth during that stretch. Before that, growth had a solid 10-year run, though value had been outperforming in the decades prior to that, Grantham said. “In the range of value versus growth, value is still much more attractively positioned than growth,” he explained. “It’s gone half the way back, but it’s still cheaper.” Value stocks could outperform growth ones by 20 percentage points over the next year or two, he added. As to what might be currently attractive, Grantham says an investor could divide value stocks into four quartiles. The third group — made up of “the pretty cheap” — did well last year and is no longer super attractive. But the cheapest quartile, which didn’t have the best year, could be poised to hold up best. “It will have a very good time,” he said. Grantham views the process of further stock market pain playing out now as similar to the popping of bubbles following other rare “explosions of investor confidence” such as in 1929, 1972 and 2000. While many are attributing last year’s slide in stocks to the war in Ukraine and the surge in inflation, or reduced growth from Covid-19 and ensuing supply chain problems, Grantham believes the market was due for a comeuppance regardless. While the first and “easiest” leg of the bubble’s bursting is over, Grantham says that the next phase will be more complicated. Seasonal strength in the market in January and during the current period of the presidential cycle could keep the market buoyant in the early part of the year. “Almost any pin can prick such supreme confidence and cause the first quick and severe decline," he wrote echoing what he has said again, and again, and again. “They are just accidents waiting to happen, the very opposite of unexpected. But after a few spectacular bear-market rallies we are now approaching the far less reliable and more complicated final phase.” For Grantham's sake, we hope he is right because at 84, he is rapidly running out of time for the apocalypse to finally hit. Grantham's full note is below (pdf link). Tyler Durden Tue, 01/24/2023 - 14:05.....»»

Category: blogSource: zerohedgeJan 24th, 2023

Oil"s bull story for 2023 is China"s reopening, but that could be derailed if Beijing can"t stay the course on its retreat from zero-COVID policy, RBC"s Helima Croft says

Chinese people are traveling more, and oil imports are rising, and that trend is the "real bull story for oil this year," RBC's Croft told CNBC. A staff member fills up a car at a gas station in Nanjing, Jiangsu Province, China.CFOTO/Future Publishing via Getty ImagesChina's relaxation of COVID restrictions will serve as the major upside catalyst for oil prices in 2023, said RBC's Helima Croft. She told CNBC the rise in Chinese oil imports and a rebound in domestic travel bode well for Brent and WTI crude. But the downside risk lies in Beijing retreating from further opening up the world's second-largest economy. The major upside catalyst for oil prices in 2023 is China revving up economic activity, but downside risk also lies with Beijing if it retreats from its loosening of restrictions tied to COVID-19, according to RBC's top commodity strategist. "The China reopening story is the big tailwind for oil," Helima Croft, head of global commodity strategy at RBC Capital Markets, said in a CNBC interview on Monday."If you look at mobility data, people are getting back on the road, back in airplanes, back on the subway, Chinese imports are rising. If this trend continues, that is the real bull story for oil this year." Among recent figures, China's national railway said it expects a near 68% increase in the number of people it foresees transporting in 2023, to 2.69 billion passenger trips.Chinese cities late last year began pulling back strict lockdown and other measures aimed at curbing the spread of COVID, with the moves jump-started after mass protests in November.  Brent crude oil, the international benchmark, on Tuesday traded around $86 a barrel, and West Texas Intermediate crude was fetching around $80 a barrel. Brent has risen roughly 1% in 2023 and WTI has been largely flat. The small moves come after a volatile 2022 that left Brent's price up about 10% and WTI higher by nearly 7%.Croft noted that Chinese imports of oil rose above 11 million barrels per day in November and December, the first such increases since the first quarter of 2021. "I would say, though, there's still some sort of caution about whether China will stay the course on this reopening," she said. Croft said sources she has spoken to say officials will be monitoring issues such as rising infections. "They pointed out the weakness in the Chinese healthcare system in terms of doctors, lack of vaccine," she said. "If the government stays the course … this is the story that would propel oil prices higher." Chinese health officials reportedly said this week that eight in 10 people have caught coronavirus since December. The country's official COVID-related death toll has climbed to 72,000, though reports indicate the real figure is much higher.Meanwhile, OPEC is sticking with its plan to reduce oil production by 2 million barrels a day, moving with caution as recession worries persist, said Croft.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 24th, 2023

3 Contrarian Bull Calls for Asymmetric Gains

InvestorPlace - Stock Market News, Stock Advice & Trading Tips Investors may want to consider contrarian bull call stocks, or stocks that lose significant value while analysts remain bullish. The post 3 Contrarian Bull Calls for Asymmetric Gains appeared first on InvestorPlace. More From InvestorPlace Buy This $5 Stock BEFORE This Apple Project Goes Live The Best $1 Investment You Can Make Today It doesn’t matter if you have $500 or $5 million. Do this now. Early Bitcoin Millionaire Reveals His Next Big Crypto Trade “On Air”.....»»

Category: topSource: investorplaceJan 24th, 2023

: Tesla earnings will be ‘most important’ in history, Tesla bull says

Tesla is slated to report fourth-quarter earnings after the bell Wednesday, and a known Tesla bull is calling the report "one of the most important in history," both for the EV maker and Chief Executive Elon Musk......»»

Category: topSource: marketwatchJan 24th, 2023

7 Cryptos to Buy as a New Bull Market Emerges

InvestorPlace - Stock Market News, Stock Advice & Trading Tips These cryptos to buy have shed an incredible amount of value but their long-term bull case points to tremendous upside ahead. The post 7 Cryptos to Buy as a New Bull Market Emerges appeared first on InvestorPlace. More From InvestorPlace Buy This $5 Stock BEFORE This Apple Project Goes Live The Best $1 Investment You Can Make Today It doesn’t matter if you have $500 or $5 million. Do this now. Early Bitcoin Millionaire Reveals His Next Big Crypto Trade “On Air”.....»»

Category: topSource: investorplaceJan 24th, 2023

Futures Dip As Tech Rally Faces First Major Test With Microsoft Earnings

Futures Dip As Tech Rally Faces First Major Test With Microsoft Earnings The rally in US tech stocks and European markets paused on Tuesday as investors prepared for earnings updates from industry giants, including Microsoft and Texas Instruments. US equity futures fell after the tech-heavy Nasdaq 100 posted its best two-day gain since November, as traders braced for the worst tech earnings slump since 2016. Europe’s region’s Stoxx 600 Index erased an early advance to fall into the red. At 7:30am ET, S&P 500 futures were 0.2% lower and Nasdaq futures were down 0.3%; the tech-heavy benchmark is up8.5% in January, on pace for its best month since July even as profit estimates are declining and as Federal Reserve officials advocate for more policy tightening to combat inflation if at a slower, 25bps pace. The USD rose; Treasuries were unchanged while commodities were mixed with strength in natgas, nickel, oil and precious metals. In pre-market trading, Alphabet shares fell slightly after a Bloomberg News report that the US Justice Department could file an antitrust lawsuit against Google as soon as Tuesday regarding the search giant’s dominance over the digital advertising market. Microsoft, which reports results today, was little changed. Yesterday the world’s largest software maker confirmed it is investing $10 billion in OpenAI, the owner of artificial intelligence tool ChatGPT. Advanced Micro Devices fell in pre-market trading, after Bernstein downgraded the stock to market perform from outperform, citing a worsening PC climate and “semi-destructive behavior” by rival Intel Corp. Here are the other notable pre-market movers: 3M forecast adjusted earnings per share for 2023; the guidance missed the average analyst estimate. Shares decline 4.9%. GE forecast adjusted earnings per share for 2023; the guidance missed the average analyst estimate. Shares gain 1.8%. Johnson & Johnson guided to stronger earnings for 2023 than analysts were expecting after a year in which the pharma division suffered because of waning demand for its unpopular Covid-19 shot. Shares rise 0.5%. Lyft shares gain 3.4% after KeyBanc upgrades the ride- hailing firm to overweight from sector weight, with broker saying data indicates that the firm is turning a corner, while cost-cutting could boost Ebitda. HighPeak Energy shares rise 15% after the oil producer’s board voted to initiate a process to evaluate strategic alternatives including a potential sale. Zions shares drop 2.7% after the bank’s total deposits fell short of Wall Street estimates, with analysts also disappointed by the firm’s forecast for net interest income which they said could put pressure on estimates amid a tough macroeconomic backdrop. Watch oil and gas stocks as Morgan Stanley says it’s increasingly selective in the sector as it continues to see a “mixed setup” for North American shares ahead of earnings. Upgrades Marathon Oil to overweight, and cuts APA and Ovintiv to equal-weight. Keep an eye on Target shares as Oppenheimer begins coverage at outperform, seeing potential for a “strong multi-year profit recovery” and opportunity for the discount retailer to capture market share. KeyBanc initiates coverage of Virgin Galactic Holdings at sector weight, saying the company could be highly profitable if it succeeds in ramping up its “next-generation” spaceship fleet, but that its performance hinges on execution. Amazon’price target and 2024 outlook cut at Telsey Advisory Group as the spending environment becomes more challenging and growth rates normalize after a couple of years of acceleration during Covid. Shares decline 0.3%. Cheesecake Factory downgraded at Raymond James to market perform from outperform reflecting concerns about the restaurant chain operator’s ability to recover pre-Covid margins. The brokerage also cut its rating on Dine Brands Global, the parent company of Applebee’s Neighborhood Grill + Bar and IHOP restaurants. Shares decline 1.8%. Cymabay Therapeutics gains 11% in premarket trading after the offering priced via Piper Sandler, Raymond James, Cantor Fitzgerald. Halliburton Co. boosted its dividend 33% as the world’s biggest provider of fracking services follows its oil-and-gas clients by expanding shareholder returns amid tight global supplies for crude. Shares gain 0.3%. HighPeak Energy (HPK) shares rise 17% after the oil producer’s board voted to initiate a process to evaluate strategic alternatives including a potential sale. Lululemon Athletica Inc. (LULU) falls as much as 2.1% after Bernstein analyst Aneesha Sherman cut her recommendation on the athleticwear maker to underperform from market perform. PennantPark Floating (PFLT) drops 6.4% after an offering of 4.25m shares raised proceeds of $47.6 million, or $11.20 apiece, representing a discount to last close. Verizon Communications Inc.’s profit outlook trailed Wall Street estimates in a sign that consumer wireless business continues to weigh down performance as the company turns to costly phone giveaways to compete with its peers. Shares decline 2%. In previewing this week's barrage of tech earnings, JPMorgan writes that with MSFT earnings coming today, and the balance of the FANG+ complex next week, "many are asking whether the US can reverse its underperformance. In the near-term, the answer seemingly lies with Tech earnings, which are expected to experience their largest decline since 2016, according to Bloomberg. Longer-term, a Fed pause may not be enough given the difference in growth rates of regions economies. The weakening USD has been a bigger benefit to international Equities than it has to create a domestic earnings tailwind. It may also be the case where the US is more vulnerable to margin compression than its international counterparts. Longer-term, if we do experience a Fed pivot this year, then would anticipate a strong, positive buying impulse for Tech." Wall Street has been slashing earnings estimates for months for the tech sector, which is projected to be the biggest drag on S&P 500 profits in the fourth quarter, data compiled by Bloomberg Intelligence show. The danger for investors, however, is that analysts still prove too optimistic, with demand for the industry’s products crumbling as the economy cools. “We do not see much scope for markets to rally in the near term, especially given our outlook for continued pressure on corporate profit growth,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note echoing what is now a consensus view with identical sentiment shared by his peers at Goldman, JPM, and Bank of America. Haefele noted that UBS GWM’s S&P 500 target for both June and December, at 3,700 points and 4,000 points, were both below Monday’s 4,020 close. “In our view, the risk-reward trade-off remains unfavorable for broad US indexes, and we retain a least preferred stance on US equities and the technology sector,” he added. European stocks also traded lower with the Stoxx 600 down 0.3%. Energy, miners and personal care are the worst performing sectors while insurance and media rise. The risk-off tone has benefited bonds with UK and German benchmarks rising and 10-year borrowing costs falling by 5bps and 2bps respectively. Here are the most notable European movers: Norwegian salmon farmers surge after a politician told newspaper Dagbladet the party is open to modifying a proposed resource tax to be levied on seafood producers in Norway Logitech shares edge up by as much as 2.4% as analysts highlighted better sell- through figures, market-share gains and solid 3Q cash flow from the computer-equipment maker Swatch shares rise 2.1% after analysts said China’s ending of its zero-Covid stance should mean a robust rebound in demand Topdanmark shares bounce as much as 4.9%, the most since February 2022, with a higher-than- expected special dividend the highlight of the Danish insurer’s results Marston’s shares gain as much as 8.7%, with analysts saying the trading update from the UK pub company shows some encouraging sales trends Senior Plc gains as much as 12% in early trading, after the company issued a trading update Monday showing a “strong finish” to the year, with profits ahead of expectations Ericsson shares fall as much as 2.9% after being cut to sell from neutral at Goldman Sachs with the broker bearish on the telecoms-equipment group’s ongoing downside risks Associated British Foods shares slip as much as 1.7% after the food processing and retailing company posted a trading update noting a softer sugar segment offsetting strong performances elsewhere Direct Line shares fall as much as 3.2% as Citi switches to a new system to better value European insurance stocks, cutting the company to sell Dometic slides as much as 4.4% after Pareto Securities cut the Swedish recreational vehicle equipment maker to hold, with US demand in “free fall” in the short term Meanwhile, European flash business activity data, while better than expected, highlighted ongoing weakness across the euro bloc and in Britain, while US figures later in the day will offer investors a snapshot of how the world’s largest economy is faring.  Commenting on today's PMI data, which came out as follows... Germany Jan. Flash Manufacturing PMI 47; Est 48 Germany Jan. Flash Services PMI 50.4; Est 49.5 France Jan. Flash Manufacturing PMI 50.8; Est 49.5 France Jan. Flash Services PMI 49.2; Est 49.8 UK Jan. Flash Services PMI 48; Est 49.5 UK Jan. Flash Manufacturing PMI 46.7; Est 45.5 ... Goldman writes that "the January flash PMIs showed significant improvements in future expectations and other forward-looking indicators like new orders also improved on the margin." And some more details: The Euro area composite flash PMI increased by 0.9pt to 50.2 in January, above consensus expectations. The increase in the composite index was broad-based across sectors, with the services sector surpassing the 50 threshold for the first time since July. Across countries, the improvement was led by the periphery and Germany, offset partially by a moderation in France. In the UK, the composite flash PMI decreased by 1.2pt to 47.8, well below consensus expectations. We see three main takeaways from today's data. First, the upside surprise in the data today and the Euro area composite PMI surpassing the 50 threshold confirm our view that Euro area growth prospects have improved significantly recently. Second, cost inflation is moderating but the increase in output prices released today provided another reminder that underlying inflation remains sticky. Third, today's data reinforce our expectation that the UK will underperform the Euro area even with falling energy prices. PMI data aside, the upcoming wave of US corporate earnings — from tech giants such as Microsoft Corp. and Texas Instruments Inc. as well as industrials such as GE — is likely to dominate attention. “It’s all about earnings,” said Peter Kinsella, head of FX strategy at asset manager UBP. “Given that equities are trading at elevated levels, any earnings disappointment would justify a shift lower in stocks.” Kinsella said there was scope for bonds to rally and reckons that the dollar, already down about 1.7% this year against a basket of rivals, has likely seen its peak as the Federal Reserve approaches the end of its rate-hiking cycle. The US central bank bank is expected to cut rates by a smaller 25 basis points at a Jan. 31-Feb. 1 meeting. “The market is saying inflation is done and dusted, which justifies a turn in tone from the Fed,” Kinsella added. “Overall I am off the view we saw the multi-year dollar peak last year.” Earlier in the session, Asian stocks extended their recent rise in holiday thinned trading, as investors looked beyond expected near-term earnings weakness and rising US interest rates. The MSCI Asia Pacific Index rose 0.8%, poised for a third straight day of gains, driven by industrial and technology shares. Japan led the advance for a second session, with China and much of the region still shut for Lunar New Year. “With job cuts proceeding apace, the markets likely continue to ignore short-term earnings and look into next year,” a bullish scenario, analyst Mark Chadwick wrote in a note on Smartkarma. Growth stocks also benefit with “Fed hike risks out of the headlines and consensus now around peak rates at 5%.” Major Asian tech stocks reporting results this week include South Korean EV battery maker LG Energy Solution and Japanese robot maker Fanuc. In addition to the rebound in global peers, local shares have also gained on optimism over China’s reopening and easing corporate crackdowns Japanese stocks rose Tuesday, gaining traction after a tech rally drove gains in US peers and amid growing optimism that the Federal Reserve will be less hawkish than previously expected. The Topix Index rose 1.4% to 1,972.92 at the market’s close in Tokyo, while the Nikkei advanced 1.5% to 27,299.19. Sony Group Corp. contributed the most to the Topix’s advance, increasing 1.9%. Mitsubishi UFJ Financial and Toyota Motor were other notable gainers. Among 2,161 stocks in the index, 1,713 rose, 369 fell and 79 were unchanged. “The rise in US stocks is positive to Japanese equities, especially with a fairly strong sentiment that US interest rate hikes might come to an end soon,” said Tomo Kinoshita, a global market strategist at Invesco Asset Management. “In Japan, exporters are rebounding as concerns over yen’s appreciation cool and inbound demand continues to contribute to the rally.” Australian stocks rose for a fifth session; the S&P/ASX 200 index rose 0.4% to close at 7,490.40, led by gains in mining and real estate shares. The benchmark closed at the highest since April 21, extending gains for fifth session.  In New Zealand, the S&P/NZX 50 index fell 0.1% to 11,932.92 In FX, the Bloomberg Dollar Spot Index swung to a gain in European session and the greenback rose against all of its Group-of-10 peers apart from the yen and the Swedish krona. The pound fell to the bottom of the G-10 pile after PMI data highlighted the looming risk of a recession in the UK economy. Readings from France and Germany were more mixed but enough to prompt the euro to reverse an earlier advance.  Traders position for a series of US data releases and the next meetings by the world’s major central banks, and the dollar meets topside demand through options. The euro climbed toward $1.09 only to reverse its gain after Germany’s manufacturing PMI unexpectedly fell. Germany’s composite PMI however came in better than forecast, at 49.7, and the composite for the whole euro zone entered expansionary territory after rising to 50.2, versus expected 49.8. Separately, German February GfK consumer confidence improved to -33.9 versus estimate -33.3 The pound fell against all of its G-10 peers and gilts outperformed Treasuries and bunds after S&P Global’s UK PMI fell to 47.8 in January from 49 the month before, well below economists’ forecasts for little change The yen advanced for the first time in three days and bonds fell. Investors were waiting for the Bank of Japan’s summary of opinions from its January meeting and Tokyo inflation data later this week to see if a further policy change was in store Australian sovereign bonds pared opening losses as markets parsed improved National Australia Bank business confidence, instead focusing on how components to business conditions softened. Australian and New Zealand dollars swung to losses in European trading In rates, Treasuries are slightly richer with yields shedding 1-3bps across the curve, supported by a wider rally in gilts after lower-than-estimated UK PMI services gauge. The 10Y TSY is around 3.50%, richer by 1bp vs Monday’s close while lagging gilts by 2bp in the sector. The risk-off tone has benefited bonds with UK and German benchmarks rising and 10-year borrowing costs falling by 5bps and 2bps respectively. In core European rates gilts outperform in bull-steepening move where front-end and belly yields are richer by 5bp on the day. The US auction cycle begins at 1pm with $42b 2-year note sale, ahead of $43b 5- year and $35b 7-year notes Wednesday and Thursday. Focal points of US session also include January PMIs, along with 2-year note auction, first of this week’s three coupon sales.   In commodities, crude futures are little changed while spot gold rises 0.3% to trade near $1,938/oz. FBI said two hacker groups associated with North Korea were behind the USD 100mln theft from US crypto firm Harmony Horizon Bridge last June, according to Reuters. Looking to the day ahead now, the main data highlight will be the January flash PMIs from Europe and the US. Elsewhere, central bank speakers include ECB President Lagarde, along with the ECB’s Knot and Vujcic. Earnings releases include Microsoft, General Electric, Danaher, Johnson & Johnson, Lockheed Martin, Texas Instruments, Union Pacific and Verizon Communications. Market Snapshot S&P 500 futures down 0.1% to 4,031.75 STOXX Europe 600 down 0.1% to 453.95 MXAP up 0.6% to 168.43 MXAPJ little changed at 551.68 Nikkei up 1.5% to 27,299.19 Topix up 1.4% to 1,972.92 Hang Seng Index up 1.8% to 22,044.65 Shanghai Composite up 0.8% to 3,264.81 Sensex up 0.1% to 61,016.22 Australia S&P/ASX 200 up 0.4% to 7,490.40 Kospi up 0.6% to 2,395.26 German 10Y yield little changed at 2.18% Euro little changed at $1.0867 Brent Futures down 0.5% to $87.73/bbl Gold spot up 0.2% to $1,935.75 U.S. Dollar Index down 0.11% to 102.03 Top Overnight News From Bloomberg The UK government sank deeper into debt in December as rising debt-interest payments and the cost of insulating consumers and businesses from the energy-price shock strained the public finances. The budget deficit stood at £27.4 billion ($34 billion), a record for the month and almost triple the £10.7 billion shortfall a year earlier Some UK homes are requested to curb power demand on Tuesday evening as the nation’s grid struggles for a second day to plug the gap left by a drop in wind generation The immense wealth coming from Norway’s gas and oil fields is underpinning a new refrain among market experts: it’s time for a big rebound in the krone A more detailed summary of overnight events courtesy of Newsquawk Asia-Pacific stocks were positive and took impetus from the tech rally on Wall Street but with trade quiet amid a lack of fresh catalysts and as many participants in the region remained absent with markets in China, Hong Kong, Taiwan, South Korea, Singapore, Malaysia and Vietnam all closed for the holiday. ASX 200 was underpinned by strength in the real estate, tech and mining industries albeit with gains capped after a mixed NAB business survey and soft PMI data which showed a contraction in the manufacturing and services.  Nikkei 225 continued its outperformance and climbed above the 27,000 level with the index unaffected by the latest preliminary PMI data in which Manufacturing PMI contracted for the 3rd consecutive month although Services and Composite PMIs improved with the latter back in expansionary territory, while reports also noted that Japan is considering early May for its planned downgrade of COVID policy. Top Asian News US President Biden's Administration reportedly confronted China's government with evidence that suggested some China SOEs may be providing assistance to Russia's war effort, according to Bloomberg. The first three days of the Chinese Spring Festival holidays saw bookings for domestic hotel and scenic spots increase by 56% and 79% Y/Y, according to data by online travel agency Tongcheng Travel cited by these Global Times; Domestic air ticket bookings rose by 30%, China's passenger trips via railway, road, waterway and plane amounted 23.53 million on Monday, up 67.7% Y/Y. BoJ Governor Kuroda says markets moves are becoming more stable, via Reuters. European bourses are a touch softer overall, Euro Stoxx 50 -0.2%, and relatively unreactive to better-than-expected EZ Flash PMIs. Albeit, the FTSE 100 -0.4% is lagging slightly following its own PMIs, which point to a particularly grim start to the UK economy for 2023. Stateside, futures are a touch softer but contained overall, ES -0.2% but above 4k, ahead of data points and key earnings including MSFT. Top European News Euro-Area Business Activity Unexpectedly Grows at Start of Year Britain and the EU are unlikely to make major changes to the underlying Brexit deal, according to a report by the academic body UK in a Changing Europe cited by Reuters. ECB's Nagel said ECB is not done on far too high inflation, according to L'Express; additionally, Villeroy said the ECB probably will reach peak rates by summer. Judge Removed From HSBC Dispute Over Loan to Hot Yoga Studio UK Homes Asked to Curb Power for Second Day as Wind Fades Ukraine Latest: Stoltenberg Confident of Solution on Tanks Soon Notable data EU S&P Global Composite Flash PMI (Jan) 50.2 vs. Exp. 49.8 (Prev. 49.3); “The region is by no means out of the woods yet, however, as demand continues to fall – merely dropping at a reduced rate – and an upturn in the rate of inflation of selling prices for both goods and services will add encouragement to the hawks to push for further monetary policy tightening. The case for higher interest rates is fuelled further by the upturn in employment growth recorded during the month and signs of higher wages driving the latest upturn in price pressures." EU S&P Global Manufacturing Flash PMI (Jan) 48.8 vs. Exp. 48.5 (Prev. 47.8); Services Flash PMI (Jan) 50.7 vs. Exp. 50.2 (Prev. 49.8) German S&P Global Composite Flash PMI (Jan) 49.7 vs. Exp. 49.6 (Prev. 49.0); Click here for more detail. German S&P Global Manufacturing Flash PMI (Jan) 47.0 vs. Exp. 47.9 (Prev. 47.1); Services Flash PMI (Jan) 50.4 vs. Exp. 49.6 (Prev. 49.2) UK Flash Composite PMI (Jan) 47.8 vs. Exp. 49.1 (Prev. 49.0): "Jobs also continued to be lost as firms tightened their belts in the face of these headwinds, though many other firms reported being constrained by an ongoing lack of available labour." UK Flash Services PMI (Jan) 48.0 vs. Exp. 49.7 (Prev. 49.9); Manufacturing PMI (Jan) 46.7 vs. Exp. 45.5 (Prev. 45.3) German GfK Consumer Sentiment (Feb) -33.9 vs. Exp. -33.0 (Prev. -37.8, Rev. -37.6) FX The USD has benefitted from a PMI-induced decline in Sterling, with the DXY lifted to a 102.17 peak and Cable testing 1.23 to the downside. In contrast, the EUR was underpinned by Monday's late-doors ECB speak though EUR/USD stalled on a test of 1.09 before contrasting EZ/regional PMIs. JPY is the marked outperformer having been below 130.00 against the USD, though it has given back some of this recovery momentum in face of the above USD action. CAD is contained pre-BoC with the Antipodeans equally rangebound ahead of inflation data. Brazil's Finance Minister Haddad said President Lula and Argentina's President Fernandez requested the creation of a clearing house with a common currency to settle accounts, but added it has no name or deadline and their idea does not seek monetary unification as is the case with the Euro, according to Reuters. Fixed Income EGBs perhaps gleaned initial support on technical factors, though subsequent action was driven by a marked spike in Gilts to near 105.00. Much of the UK move was driven by the region's PMI release though subsequent bearish fiscal developments served as a fleeting headwind for Gilts and, to a lesser extent, peers more broadly with Bunds continuing to slip post-PMIs. USTs are a touch firmer given the above action and ahead of its own data release and 2yr issuance. UK sells GBP 6bln 2053 Gilt via syndication, order book closed in excess of GBP 65bln, according to a bookrunner. Commodities The crude benchmarks are little changed/slightly softer as a GBP-induced lift to the USD weighs on the complex. However, WTI and Brent remain underpinned overall by the broader improving demand picture amid the Lunar New Year holiday. US is weighing the cancellation of the next SPR sale, according to sources cited by Energy Intel. Dubai sets the official crude differential to DME Oman for April at a USD 0.20/bbl discount. Norwegian Energy Ministry plans a 2023 APA oil and gas licensing round, adding acreage to the Norwegian and Barents sea. 5.4 magnitude earthquake strikes Nepal, via EMSC. Spot gold has slipped from its intraday peak given USD action, though the yellow metal continues to glean support from the slightly softer equity tone while LME Copper has slipped from best but remains in proximity to USD 9.5k/T. Geopolitics Russian Chief of the General Staff Gerasimov said the new army plan considers threats such as Finland and Sweden's desire to join NATO, and the use of Ukraine as a tool of hybrid war against Russia, according to TASS. Polish Defence Minister said Germany has now received Poland's official request to re-export Leopard tanks to Ukraine; following the German Defence Minister saying there is no new position on the Leopard tanks. US Event Calendar 08:30: Jan. Philadelphia Fed Non-Manufactu, prior -17.1, revised -12.8 09:45: Jan. S&P Global US Composite PMI, est. 46.4, prior 45.0 09:45: Jan. S&P Global US Services PMI, est. 45.0, prior 44.7 09:45: Jan. S&P Global US Manufacturing PM, est. 46.0, prior 46.2 10:00: Jan. Richmond Fed Index, est. -5, prior 1 DB's Jim Reid concludes the overnight wrap Risk assets got the week off to a very strong start yesterday, with the S&P 500 (+1.19%) at a 7-week high as investors awaited a raft of earnings reports over the coming days. However, just as equities were surging to fresh highs for 2023, there were also growing concerns about a potential US recession, with the Conference Board’s leading index for December falling by a larger-than-expected -1.0% (vs. -0.7% expected). So that’s a further negative signal after last week’s downbeat releases on retail sales and industrial production, and one that will increase the focus on today’s flash PMIs for January. In many respects, this divergence between more positive markets and weak economic data echoes what Jim and I published last week in our “Sweet Spot” note (link here). We pointed out how it was consistent to be tactically positive on risk assets whilst maintaining our (very) bearish view for H2 2023. In essence, since October markets have been less concerned about inflation and where rates might need to go, with terminal pricing for the Fed funds remaining steady around the 5% mark for a few months now. But we also haven’t reached the US recession that we’re forecasting for H2, which is giving markets scope to rally in the meantime. Indeed, we show in the piece this is also consistent with the historic pattern, with the S&P 500 only tending to turn significantly lower a few weeks before the recession on average. When it came to that release from the Conference Board, the -1.0% decline in December marked the 10th successive monthly decline for the leading index. Furthermore, it means that it’s now down -6.0% on a year-on-year basis, the most since June 2020. Bear in mind that on every other occasion the index has been down by that amount in a single year, the US economy has either been in a recession or was just emerging from one. So clearly not a positive sign by historic standards. For the time being at least, investors put aside their caution on a recession, with equities seeing a strong rally on both sides of the Atlantic. Tech stocks led the advance, which continues their very strong performance in January so far. The NASDAQ was up +2.01%, thus bringing its YTD gains to +8.58%. Meanwhile the FANG+ index of megacap tech stocks saw even larger gains, with a +4.03% advance that brought its own YTD performance to +14.80%, and puts it on track for its best monthly performance since August 2020. After the close there was a Bloomberg report that the US Justice Department was set to sue Google’s parent company Alphabet as soon as today about their digital ad dominance. Alphabet shares were down -0.9% in after-market trading, but futures for the NASDAQ 100 more broadly saw little reaction, and are only down -0.02% this morning. Elsewhere, the cyclical sectors outperformed in line with the risk-on tone for the day, but there was a broader underperformance in Europe, with the STOXX 600 only up +0.52%. Whilst equities were buoyant, sovereign bonds lost ground amidst the risk-off tone, with yields on 10yr Treasuries up by +3.1bps yesterday to 3.51%, followed up by a +0.7bps move overnight to 3.52% as we go to print. That was echoed in Europe too, with yields on 10yr bunds (+2.9bps), OATs (+3.2bps) and BTPs (+3.4bps) seeing similar rises of their own. Those moves came as there was some pushback from ECB speakers about the idea of slowing their rate hikes down from 50bps after the February meeting, with Slovakia’s Kazimir saying yesterday that “we need to deliver two more 50 basis-point moves”. After the close, we also heard from President Lagarde, who said that “We will stay the course to ensure the timely return of inflation to our target”. Looking forward, the main highlight today will be the flash PMIs for January, since they’ll provide an initial steer on how the global economy is performing into 2023. Last month both the US and the Eurozone composite PMIs were in contractionary territory, thus adding to fears about a potential recession. However, the year so far has brought some relatively good news, with European natural gas currently around its lowest in over a year, alongside clear signs that consumer confidence has begun to recover. When it comes to the PMIs, our European economists think the positive impact of easing uncertainty is more likely to come in services than manufacturing. Overnight, we’ve already had some initial PMI numbers from Japan and Australia, which have added to that picture that the global economy might be faring worse than feared. Starting with Japan, the composite PMI moved back into expansionary territory at 50.8, following two months beneath the 50 mark. The manufacturing PMI did remain in contractionary territory at 48.9, but services saw a stronger move higher to 52.4. Meanwhile in Australia, there was also a rise in the composite PMI overnight to 48.2 (vs. 47.5 previously), so still in contractionary territory but a change from three consecutive declines in the PMI. Those more positive PMI releases along with the US equity rally has boosted sentiment in Asian markets this morning, with the Nikkei (+1.52%) as well as the S&P/ASX 200 (+0.44%) both trading in positive territory. However, several major markets across the region remained closed for the Lunar New year holiday. Elsewhere, equity futures suggest that US stocks will hold onto yesterday’s gains, with those on the S&P 500 basically stable at +0.02%. Otherwise yesterday, there was a fair amount of optimism across different asset classes. For instance, Brent crude oil closed above $88/bbl for the first time in 2023 (+0.64% yesterday), which is a decent jump after trading beneath $78/bbl at the lows around the start of the month. Elsewhere, Bloomberg’s index of US financial conditions showed they were at their most accommodative levels since last February. And we also saw the Euro move above $1.09 in trading for the first time since April, before closing back at $1.087. Finally in other data yesterday, the European Commission’s preliminary consumer confidence indicator for the Euro Area in January rose to -20.9 (vs. -20.0 expected). That was beneath expectations, but still the strongest that reading has been since last February. To the day ahead now, and the main data highlight will be the January flash PMIs from Europe and the US. Elsewhere, central bank speakers include ECB President Lagarde, along with the ECB’s Knot and Vujcic. Earnings releases include Microsoft, General Electric, Danaher, Johnson & Johnson, Lockheed Martin, Texas Instruments, Union Pacific and Verizon Communications. Tyler Durden Tue, 01/24/2023 - 08:06.....»»

Category: blogSource: zerohedgeJan 24th, 2023

Statements Discouraging Market Timing / Price Discipline Are Wealth Destroyers

Irrational exuberance is nasty stuff. It appears when investors crave more in the way of stock gains than increases in economic productivity alone can generate. What makes irrational exuberance so difficult to combat is that the negative consequences that follow from it can be delayed for a long time. For so long as there are […] Irrational exuberance is nasty stuff. It appears when investors crave more in the way of stock gains than increases in economic productivity alone can generate. What makes irrational exuberance so difficult to combat is that the negative consequences that follow from it can be delayed for a long time. For so long as there are no visible negative consequences, investors experience only pretend gains that they believe to be real. So they make no effort to bring an end to the bull market generating the irrational exuberance and permit it to grow stronger and stronger. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2022 hedge fund letters, conferences and more   Eventually, of course, there are severe negative consequences. The market’s core job is to get prices right (this is the core job of all markets). When the market is not able to pull prices down through any other means for a long time, it crashes them. The huge loss in consumer buying power causes an economic contraction that causes hundreds of thousands of businesses to go under and millions of workers to lose their jobs and political frictions to escalate. If only we could pop bubbles before they got so out of hand! Engaging In Market Timing In theory, we could. Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns is the answer. If stock investors were warned on a daily basis of the dangers of Buy-and-Hold strategies (strategies that do not call for market timing in response to high valuation levels), market prices would be self-regulating – high stock prices would cause investors to lower their stock allocation and the stock sales would bring prices back to reasonable levels. We are obviously not in that magical place today; today’s CAPE value tells us that much. I’m always trying to think of ways to make clear to investors how dangerous it is to fail to engage in market timing. So long as investors practice price discipline when buying stocks, the market could continue functioning forever without there being another price crash or another economic crisis. But in a world in which Buy-and-Hold strategies are heavily promoted (the world we live in), prices go up and up and hardly anyone even frets about it. Until the crash and the economic crisis arrive. It doesn’t do much good to fret then because at that point the damage has been done both to millions of individual retirement plans and to our economic and political systems as a whole. So it would be useful if we could come up with a metric that made it clear in a simple way how much damage is being done each time investors are advised “there’s no real need to engage in market timing” or something along those lines. It is the individual acts of promotion of Buy-and-Hold strategies that do the damage but all that investors personally witness are the crashes and economic crises that the Buy-and-Holders blame on negative economic developments. To persuade investors to engage in market timing, we need to make clear to them the connection between everyday failures to engage in market timing (a lowering of one’s stock allocation in response to an increase in stock prices) and the negative consequences that inevitably follow from such behavior. Every time someone gives voice to the idea that market timing (exercising price discipline when buying stocks) is not necessary, $10,000 of wealth is destroyed.   Discouraging Market Timing / Price Discipline There is no scientific basis for that claim. I made the number up. My aim here is just to give an example of the type of statement that we all need to hear more often. If people were reminded regularly that discouraging market timing / price discipline comes with such a big price-tag attached, we would hear market timing discouraged a lot less frequently. The number sounds crazy. Recommending Buy-and-Hold strategies cannot possibly do that much damage. Right? I’m not so sure. In January 2000, when we hit the peak of the bull market, the CAPE value hit “44.” That translated into $12 trillion of excess market value. Say that market timing was discouraged once every day for 10 years. That would be 3,650 statements discouraging market timing. If each of those statements caused a loss of #10,000 in wealth, the total lost wealth would be 36,500,000. So, if it took 10 years for prices to drift up to the insane levels that applied in January 2000, the $10,000 rule would be a reasonable estimate of the damage done by statements discouraging market timing if there had been a daily average of 3.2 billion statements discouraging market timing during that time period. If there were fewer discouraging statements (as if almost certainly the case), the cost per discouraging statement would be higher than $10,000 each. Statements that discourage market timing / price discipline are extremely costly to all of us. We just do not realize how costly because it can take 10 years or even a bit longer for that cost to be brought home to us in the form of a price crash and an economic crisis. Rob’s bio is here......»»

Category: blogSource: valuewalkJan 24th, 2023

Disney’s Bob Iger and Salesforce’s Marc Benioff are the latest high-profile execs to come under pressure from activist investors

Insider's Phil Rosen explains the growing role activist investors are playing in brand-name companies. Happy Tuesday, readers. Phil Rosen here — at least for now. Ever-conscious of the rise of the bots, I wanted to compare investment advice between Wall Street experts and the splashy new language tool, ChatGPT. Surprise, surprise: The AI's strategy holds up just fine against the humans. (Gulp).ChatGPT took all of 30 seconds to lay out a five-part strategy for investing during a recession — you can read it here.To you financial strategists and journalists out there, don't say I didn't warn you.Now let's get to the news.If this was forwarded to you, sign up here. Download Insider's app here.Bob IgerValerie Macron/Getty Images1. Billionaire activist investors are putting pressure on top CEOs who were previously thought to be untouchable. Leaders of beloved brand names are coming under fire — and Marc Benioff of Salesforce and Disneys' Bob Iger are the two latest execs to feel the heat, as my colleague Matthew Fox writes.Like the rest of us who endured last year's bear market, top shareholders in once-high-flying companies are feeling the sting of underperformance, and that's painted a target on the back of corporate management teams. Nelson Peltz of the Trian Fund launched an activist investor campaign against Disney, and Paul Singer of Elliott Management did the same against Salesforce. The two companies are down about 49% and 35% from their peaks, respectively.Meanwhile, the Nasdaq 100 is down 30%.At the heart of their demands is more capital discipline, specifically when it comes to headcount. The activist targeting Google parent Alphabet, for instance, said that the 12,000 job cuts at the search giant were a step in the right direction but still not enough, and median salaries should also come down.  At first glance, the activism seems to be working.The stocks have climbed since the news of the two campaigns emerged — but it's a little more complicated than up or down moves, and last week Disney rebuffed Peltz's request for a seat on its board of directors.Much of last year's stock slump can be chalked up to the Fed's interest rate hikes, as well as investors' flight to non-tech stocks and safe havens like the dollar. That means activist investors, moguls they may be, still face an uphill battle in winning over shareholders and management teams.Read the full breakdown of the clash among billionaires. What's your take on this burgeoning wave of activist investors? Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know. In other news:Federal Reserve Board Chairman Jerome Powell speaks during a news conference after a Federal Open Market Committee meeting January 30, 2019 in Washington, DC. The Fed has decided to leave interest rates unchanged.Alex Wong/Getty Images2. US stock futures fall early Tuesday, as investors brace for the next wave of high-profile earnings and despite growing hopes for a mild recession. Here are the latest market moves.3. Earnings on deck: Microsoft, Visa, Johnson & Johnson, all reporting.4. These groups of 10 stocks can provide the foundation for a portfolio that can outperform during an economic slowdown. Goldman Sachs' top analysts put together two separate portfolios: one for an economy that keeps growing, and one for a recession. 5. Morgan Stanley's top strategist advised not to buy into the current stock rally. To Mike Wilson, the final stages of the bear market have yet to play out — and corporations appear on pace to hit an earnings recession.6. Investor optimism toward stocks is coming too soon, according to BlackRock. The asset manager said the Fed will inflict damage on the economy in order to rein in inflation. That means market bulls are operating on shaky ground as signs of a downturn mount.7. Stocks are about to crash as the "perfect bull market cocktail" of the last four decades comes to an end. That's according to Gateway Credit's chief investment officer, Tim Gramatovich, who told me that valuations look set to plunge and stay depressed even beyond 2023.8. This Navy officer built a $1 million real estate portfolio with $14,000. She explained how anyone can start buying property with little to no money down — here are five of her top strategies.9. Credit Suisse recommends investors buy these 39 cheap stocks right now. This batch of names are set for stronger earnings growth than their peers this year even in a weaker environment, strategists said. Get the full list.Bitcoin price on Jan. 24, 2023Markets Insider10. Bitcoin is hovering near its highest price in five months. And crypto-linked stocks are also rising with the token. Crypto bank Silvergate jumped 12% Monday. The world's most popular crypto is now up 36% in the past month.Curated by Phil Rosen in Los Angeles. Feedback or tips? Tweet @philrosenn or email prosen@insider.comEdited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.Read the original article on Business Insider.....»»

Category: smallbizSource: nytJan 24th, 2023