Advertisements



Ford recalls 518K SUVs in US over possible fuel leak, fire risk

The Ford Motor Company is recalling some Bronco Sport and Escape SUVs manufactured between the 2020 and 2023 model years due to a possibly cracked fuel injector......»»

Category: topSource: foxnewsNov 24th, 2022

Auto Roundup: Updates From General Motors (GM) & Ford (F) at the Forefront

Ford (F) and General Motors (GM) dominate last week's major news with the announcement of recalls, production halts and more. Major auto giants reported first-quarter 2022 vehicle sales numbers last week. Most of them suffered a double-digit decline in sales volumes. Overall, new vehicle sales declined more than 12% year over year for the January-March period due to escalating supply chain issues despite robust consumer demand. Sales plunged even more drastically in March as limited vehicle supply and tight inventories kept a lid on volumes amid compounded chip concerns over the Russia-Ukraine crisis. Per Cox Automotive, the seasonally adjusted annual rate for March declined to 13.09 million units from 14.1 million in February and 17.6 million in March 2021. More on this here: Do Dismal Q1 Sales Hint at Rough 2022 for U.S. Auto Market?Auto giants Ford F and General Motors GM issued a recall of some of their models last week on issues related to damaged parts or certain features that compromise the safety of other drivers on the roads. The companies were also prompted to temporarily suspend operations in some of their factories amid a shortage of chips.Automotive suppliers Magna International MGA and Meritor MTOR made news with the expansion of operations in Ontario and deal with Extreme Trailers, respectively. Auto retailer Penske Automotive PAG bolstered its position in the United Kingdom with the acquisition of three BMW MINI dealerships.Recap of Last Week’s Major News1. General Motors announced that it is setting up an organization called Commercial Growth Strategies and Operations to boost profitability, as it ramps up efforts to switch gears to electric. The new group will be responsible for GM Fleet, U.S. Sales Operations and EV Retail Innovation teams. The organization will be led by GM veteran executive Steve Hill, who has been the vice president (VP) of Chevrolet since November 2019. Scott Bell — currently the president and managing director of GM Canada — is set to replace Hill as the VP of Global Chevrolet. Marissa West — currently GM’s executive chief engineer for global midsize truck, medium-duty truck and van — will substitute Bell at GM Canada. These leadership changes are effective Apr 1, 2022.In another update, General Motors issued a recall of more than 680,000 SUVs due to a snag in their windshield wipers resulting from wear and tear in the ball joints. The recall consists of 2014-2015 Chevrolet Equinox and GMC Terrain vehicles.Meanwhile, General Motors also announced that it would cancel production at the Lansing Grand River assembly for one week ending Apr 10 due to a temporary part shortage. The plant builds the Cadillac CT4, Cadillac CT5 and Chevrolet Camaro. The auto biggie also declared a two-week production hiatus beginning Apr 4 at an assembly plant in Fort Wayne, IND, a site that builds the Chevrolet Silverado 1500 and GMC Sierra 1500 pickup trucks, due to the long-drawn semiconductor chip shortage.2. Ford issued two recalls covering more than 737,000 vehicles to fix oil leaks and malfunctioning trailer braking systems. If unchecked, a housing that has cracked can cause oil leakage onto engine parts, which can cause a fire hazard. The oil leak recall consists of the Ford Escape SUV from 2020 through 2022 and the 2021 and 2022 Bronco Sport SUV with 1.5-Liter engines. Dealers will replace the housing if need be. Owners will be informed of the same starting Apr 18. The recalls for trailer brake failures include F-150 pickups from 2021 and 2022 as well as the 2022 F-250, 350, 450 and 550. They also include the 2022 Maverick pickup, Ford Expedition and Lincoln Navigator SUVs. A software glitch can prevent trailers from braking, enhancing the risk of a crash. As a corrective measure, dealers will update the brake control software. Owners will be informed of the same starting Apr 18.In a separate development, Ford notified that it would stop production at the Flat Rock Assembly Plant, which manufactures the Mustang, for a week ending Apr 10 due to the global semiconductor shortage. Its remaining North American plants would be functional during this period.Meanwhile, Ford unveiled the 2023 F-150 Rattler, a new off-road variant truck package. The Rattler will be based on the four-wheel-drive F-150 XL model, including some of the equipment found in the FX4 package like an electronic locking rear differential, hill descent control and shock absorbers tuned for off-roading. The Rattler will only be available as a SuperCab or SuperCrew and is scheduled for sale this fall.3. Penske strengthened its footprint in the United Kingdom with the acquisition of three BMW MINI dealerships and a collision center. The acquired dealerships are located in South East England and North of London, which complement PAG’s existing 32 BMW MINI dealerships in the U.K. market. The acquisitions solidified Penske’s position as the biggest retail partner for the BMW and MINI brands in the United Kingdom.The deal has been financed using the existing capacity under PAG’s U.K.-based credit facility. The buyout would add $250 million in annualized revenues for Penske. Year to date, Penske has added roughly $550 million to annual revenues via buyouts and open points. PAG currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.4. Magna announced that it is expanding operations to Chatham-Kent, Ontario, as part of an extension of its current operations in St. Thomas to support new business from Ford. Magna, which is focused on accelerating electrification strides, is leveraging its top-class body and chassis expertise to provide innovative battery enclosures. MGA’s investment in Chatham-Kent will be a springboard for growth.The sprawling 170,000 square foot facility is supposed to create around 150 new jobs and manufacture battery enclosures for the Ford F-150 Lighting. This trailblazing offering would be the largest lightweight aluminum battery enclosure available in the market and the first on a work truck. Magna stated that commendable work by its employees at the Formet, St. Thomas facility has led to additional business for the company, allowing it to expand opportunities in Chatham to develop new technologies that have tremendous growth potential. Chatham-Kent is driven by green, innovative and futuristic technologies. Hence, Magna’s values complement it very well.5. Meritor entered into a three-year agreement with Extreme Trailers, per which it will supply MTA™ and MTA-Tec6™ suspensions with its latest generation EX+™ LS single-piston air disc brakes and the Meritor Tire Inflation System (MTIS™). Meritor’s collaboration with Extreme Trailers will aid the automotive equipment supplier to launch MTA-Tec6. The latest offering demonstrates Meritor's commitment to innovation and technological advancement.The MTA-Tec6 is Meritor's lightest-weight trailer suspension. The product will provide up to 23,000-pound capacity for tankers, flatbeds and other applications. MTA-Tec6 is equipped with a unique bolt-on lift kit, enabling seamless assembly and enhancing the application flexibility. Meanwhile, the MTIS would aid in keeping tires properly inflated to improve tire life and fuel economy.Price PerformanceThe following table shows the price movement of some of the major auto players over the past week and six-month period.Image Source: Zacks Investment ResearchWhat’s Next in the Auto Space?Industry watchdogs will keep an eye on March auto sales in China, likely to be released by the China Association of Automobile Manufacturers soon. Further, stay tuned for how automakers make changes in operations in the light of increasing supply chain snarls. 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 Ford Motor Company (F): Free Stock Analysis Report Penske Automotive Group, Inc. (PAG): Free Stock Analysis Report Magna International Inc. (MGA): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report Meritor, Inc. (MTOR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksApr 6th, 2022

Ford Recalls 519,000 Broncos And Escapes Over Cracked Fuel Injectors Sparking Engine Fires

Ford Recalls 519,000 Broncos And Escapes Over Cracked Fuel Injectors Sparking Engine Fires Ford Motor Company waited until Thanksgiving morning to announce a sizeable recall of more than 500,000 Bronco Sport and Escapes for possible cracked fuel injectors that could cause fuel and/or fuel vapor to leak onto a hot engine and cause fires. The Dearborn, Michigan, automaker said Bronco Sport and Escape owners with 3-cylinder, 1.5L engines are "urged" to visit the closest dealership for inspection.   Repairs aren't yet available. So Ford will provide an engine update to "detect whether the fuel injector is cracked and, if so, provide a dashboard message to customers to seek service." If fuel pressure drops, the "engine power will automatically be reduced to minimize any risk, while also allowing customers to drive to a safe locations, and stop the vehicle and arrange for service."  Dealers will also install a tube-draining fuel line from the cylinder head away from the engine and check for excessive fuel odor before a fix is available. "Once the repair is available, we will ask customers to schedule service with their preferred dealer. They can then take advantage of our complimentary pickup and delivery or a loaner to make sure the repair is completed at their earliest convenience," Jim Azzouz, Executive Director, Global CX Products & Customer Relations, wrote in a statement.  Reuters reported there had been 54 under-hood engine fires, including four with cracked fuel injectors. A leaking fuel injector caused about 13 others. Ford has yet to tell the owners of these sport utility vehicles to stop driving. AP said owners would be notified by mail about the engine issues and fire hazard risks on Dec. 19.  Tyler Durden Fri, 11/25/2022 - 10:20.....»»

Category: blogSource: zerohedgeNov 25th, 2022

Ford (F) & General Motors (GM) Recall Numerous Defective Cars

Ford (F) and General Motors (GM) announce recalls on the back of malfunctioning auto parts. Two auto giants, Ford Motor F and General Motors GM have announced recalls in the event of defective body parts.Ford has issued two recalls that cover over 737,000 vehicles to fix oil leaks and malfunctioning trailer braking systems. If unchecked, a housing that has cracked can cause oil leakage onto engine parts, which can lead to a fire hazard.The oil leak recall consists of the Ford Escape SUV from 2020 through 2022 and the 2021 and 2022 Bronco Sport SUV with 1.5-Liter engines.Dealers will replace the housing if need be. Owners will be informed of the same starting Apr 18.The recalls for trailer brake failures include F-150 pickups from 2021 and 2022, as well as the 2022 F-250, 350, 450 and 550. They also include the 2022 Maverick pickup, Ford Expedition and Lincoln Navigator SUVs.A software glitch can prevent trailers from braking, enhancing the risk of a crash. As a corrective measure, dealers will update brake control software. Owners will be informed of the same starting Apr 18.General Motors has issued a recall of more than 680,000 SUVs due to a snag in their windshield wipers resulting from a wear and tear in the ball joints.The recall consists of 2014 to 2015 Chevrolet Equinox and GMC Terrain vehicles.The National Highway Traffic Safety Administration (“NHTSA”) has estimated that 1% of cars have this defect and the recall plan covers 681,509 units.The NHTSA has stated that owners will receive notification letters on May 2. Dealers will repair or replace the windshield wipers free of cost for them.GM had issued the same recall in 2017 for the 2013 Chevrolet Equinox and GMC Terrain.Zacks Rank & Key PicksBoth F and GM carry Zacks Rank #3 (Hold) currently.Some better-ranked players in the auto space include Harley-Davidson HOG and Tesla TSLA, each sporting a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.Harley-Davidson has an expected earnings growth rate of 2.2% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised around 28.1% upward in the past 60 days.Harley-Davison’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters. HOG pulled off a trailing four-quarter earnings surprise of 77.6%, on average. The stock has decline 4.7% over the past year.Tesla has an expected earnings growth rate of 42.3% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 4.5% upward in the past 60 days.Tesla’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 33.3%, on average. The stock has gained 59% over the past year. Just Released: Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top buy-and-hold tickers for the entirety of 2022? Last year's 2021 Zacks Top 10 Stocks portfolio returned gains as high as +147.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buysAccess Zacks Top 10 Stocks for 2022 today >>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 Ford Motor Company (F): Free Stock Analysis Report HarleyDavidson, Inc. (HOG): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksApr 4th, 2022

Fiat Chrysler recalling 51,000 Jeep Cherokees because of fire risk

Fiat Chrysler Automobiles says it is not aware of any injuries or accidents related to the fire issue, where fuel supply tubes could leak......»»

Category: topSource: moneycentralMay 22nd, 2018

U.S. Natural Gas: Analysis of the EIA"s Weekly Inventory Data

Despite some hiccups along the way, natural gas prices have appreciated significantly in 2022, lifting shares of companies like RRC, EQT and CRK. The U.S. Energy Department's weekly inventory release showed a smaller-than-expected decrease in natural gas supplies. The negative inventory numbers, coupled with other factors, meant that futures plunged more than 14% week over week.Despite this, the market has been kind to natural gas in 2022, with the commodity trading considerably higher year to date and hitting $10 for the first time since 2008. Natural gas stocks like Range Resources RRC, EQT Corporation EQT and Comstock Resources CRK have been some of the prime beneficiaries of the price appreciation.EIA Reports a Withdrawal Smaller Than Market ExpectationsStockpiles held in underground storage in the lower 48 states fell 81 billion cubic feet (Bcf) for the holiday-shortened week ended Nov 25, below the guidance of 88 Bcf decline per the analysts surveyed by S&P Global Commodity Insights.However, the decrease was above last year’s pull of 54 Bcf for the same corresponding week and the five-year (2017-2021) average net shrinkage of 34 Bcf.The second draw of the winter heating season puts total natural gas stocks at 3,483 Bcf, which is 89 Bcf (2.5%) below the 2021 level at this time and 86 Bcf (2.4%) lower than the five-year average.The total supply of natural gas averaged 106.4 Bcf per day, down 0.6 Bcf per day on a weekly basis due to lower shipments from Canada, partly offset by an increase in dry production.Meanwhile, daily consumption slumped 13.7% to 108.6 Bcf from 125.9 Bcf in the previous week, mainly reflecting a weaker power burn and decreased residential/commercial demand on the back of above-normal temperatures.Natural Gas Logs a Big Weekly LossNatural gas prices tumbled last week, following the lower-than-expected inventory draw. Futures for January delivery ended Friday at $6.281 on the New York Mercantile Exchange, falling around 14.3% from the previous week’s closing. The decrease in natural gas realization — for the first time in four weeks — is also the result of forecasts for milder weather and the extended shutdown of the Freeport LNG export plant in Texas.As is the norm with natural gas, changes in temperature and weather forecasts can lead to price swings. The latest models anticipate tepid temperature-driven consumption over the near term (with less extensive use of heaters across homes and businesses), which is a negative for prices.The one thing supporting natural gas is a stable demand catalyst in the form of continued strong LNG feedgas deliveries. LNG shipments for export from the United States have been robust for months on the back of environmental reasons and record-high prices of the super-chilled fuel elsewhere.Now, with the Russia-Ukraine conflict, LNG has become even more coveted. As a matter of fact, earlier this year, the United States entered into a partnership with the EU to export additional LNG to wean the bloc off its dependence on Russian natural gas supplies. This means that LNG deliveries are poised to rise further, especially with squeezed natural gas supplies from Moscow to Europe, following leaks in the key Nord Stream pipeline.However, the protracted downtime associated with the fire breakout at the Freeport LNG export plant in Texas has drowned out some of the positives as of now. The Quintana, TX facility — responsible for around 15% of U.S. liquefaction capacity — was knocked offline by the Jun 8 blast and is expected to only partially restart by the end of December after several missed target dates. Consequently, some of the LNG cargoes due for export are likely to have been diverted to the domestic market despite huge demand abroad. Final ThoughtsDespite some hiccups in between, the natural gas market is still up almost 70% so far this year. While fundamental indicators continue to suggest strong price levels, the natural gas market is currently quite unpredictable and spooked by the sudden changes in weather. As such, investors are rather unsure of what to do. As of now, the lingering uncertainty over the fuel means that they should preferably opt for fundamentally strong stocks like Range Resources, EQT and Comstock Resources.Range Resources: The upstream firm has a strong footing in the prolific Appalachian Basin. In the gas-rich resource, RRC has huge inventories of low-risk drilling sites that are likely to provide production for several decades.Range Resources has a projected earnings growth rate of 151.5% for the current year. Valued at around $6.5 billion, this Zacks Rank #3 (Hold) company reported EPS of $1.37 for the third quarter, reflecting a 0.7% surprise over consensus. RRC shares have climbed 45.2% in a year.You can see the complete list of today’s Zacks #1 Rank stocks here.EQT: EQT is primarily an explorer and producer of natural gas, with the primary focus on the Appalachian Basin in Ohio, Pennsylvania and West Virginia. In terms of average daily sales volumes, EQT is the largest natural gas producer in the domestic market.The company has an expected earnings growth rate of 348.9% for the current year. The Zacks Consensus Estimate for EQT’s 2022 earnings has been revised 2.5% upward over the past 90 days. EQT — valued at around $14.7 billion — has soared 104% this year.Comstock Resources: The company is active in the Haynesville shale in North Louisiana and East Texas — a premier natural gas basin. As of now, CRK has a projected earnings growth rate of 218.1% for the current year.Comstock Resources, with a market capitalization of $3.9 billion, enjoys a Zacks Value, Growth and Momentum Style Score of A each, and an overall VGM Score of A. CRK shares have surged 117.6% so far this year. 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 Comstock Resources, Inc. (CRK): Free Stock Analysis Report Range Resources Corporation (RRC): Free Stock Analysis Report EQT Corporation (EQT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksDec 5th, 2022

Enbridge (ENB), Bad River Tribe to Form Line 5 Oil Spill Plan

Enbridge (ENB) and the Bad River tribe have to submit a joint proposal or provide their proposals if no agreement can be reached by Dec 24. Enbridge Inc. ENB and the Bad River tribe have been ordered by a federal judge to reach a decision to shut down and remove Line 5, as it could result in a catastrophic oil leak on the Bad River.The judge ordered Enbridge and the Bad River tribe to establish a strategy to prevent the oil flow, if a rupture occurs, and stop the erosion along the Bad River by Dec 17. Enbridge and the Bad River tribe have to submit a joint proposal or provide their proposals if no agreement can be reached by Dec 24.The rupture of Line 5 could have disastrous consequences in the Bad River watershed and Lake Superior. Hence, the court believes that a pipeline rupture would be an irrational intervention against the Band’s rights.Line 5, which is part of Enbridge’s larger Mainline and Lakehead systems, extends from Wisconsin through Michigan and into Ontario. The pipeline is a major source of 540,000 barrels per day of propane and crude oil supply for Michigan and nearby areas.In 2019, the Bad River Band of Lake Superior Chippewa sued Enbridge in federal court and forced the company to shut down Line 5 as it poses an unreasonable threat to health and safety due to the risk of a potential rupture.Enbridge has already taken actions to prevent a rupture of Line 5, which involves a more robust shutdown plan, more monitoring, installing emergency flow restricting device shutoff valves, accelerating the purging process to clear the portion of the pipeline near the meander, proposing remediation to fight the erosion and working on reroute plans.The Bad River Band has constantly asked Enbridge to completely and permanently shut Line 5. Enbridge plans to develop a $450-million pipeline running 41 miles around the Bad River reservation in response to Bad River’s lawsuit. Meanwhile, the Line 5 oil and gas pipeline will continue to operate.Price PerformanceShares of Enbridge have underperformed the industry in the past six months. The stock has lost 7.8% compared with the industry’s 11.4% decline. Image Source: Zacks Investment Research Zacks Rank & Stocks to ConsiderEnbridge currently carries a Zack Rank #3 (Hold).Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Murphy USA Inc. MUSA reported third-quarter 2022 earnings per share of $9.28, beating the Zacks Consensus Estimate of $7.82. The outperformance can be attributed to a rise in the retail gasoline price and a higher retail margin of 37.6 cents per gallon, up 41.4% year over year.In more good news for investors, MUSA’s board of directors recently declared a quarterly cash dividend of 35 cents per share to its common shareholders of record as of Nov 8. The payout, which represents a 9% sequential increase, will be made on Dec 1.MPLX LP MPLX is a master limited partnership that provides a wide range of midstream energy services, including fuel distribution solutions. MPLX’s third-quarter earnings of 96 cents per unit beat the Zacks Consensus Estimate of 81 cents.MPLX’s distribution per unit was 77.5 cents for the third quarter, indicating a 10% hike from the prior distribution of 70.5 cents. The distribution will be paid out on Nov 22, 2022, to common unitholders of record as of Nov 15, 2022.Exxon Mobil Corporation XOM reported third-quarter 2022 earnings per share of $4.45, excluding identified items, beating the Zacks Consensus Estimate of $3.88. Strong earnings have resulted from higher realized commodity prices and oil-equivalent production, and strong refining margins.ExxonMobil has announced a fourth-quarter dividend of 91 cents per share, indicating an increase of 3.4% from the last dividend payment of 88 cents. The dividend is payable on Dec 9. 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 Exxon Mobil Corporation (XOM): Free Stock Analysis Report Enbridge Inc (ENB): Free Stock Analysis Report Murphy USA Inc. (MUSA): Free Stock Analysis Report MPLX LP (MPLX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksNov 30th, 2022

UK Power Prices Skyrocket As Wind Generation Collapses

UK Power Prices Skyrocket As Wind Generation Collapses Good thing the UK recently "war gamed" emergency plans to deal with energy shortfalls because a collapse in wind power has skyrocketed electricity prices, and network operator National Grid Plc might ask homes and businesses to reduce power use on Tuesday.  Some hourly power contracts for Tuesday jumped above £1,200 ($1,445.92) a megawatt-hour on Epex Spot SE as wind generation is set to come to an abrupt halt, reported Bloomberg.  Britain has one of the largest offshore wind farms in the world but is prone to energy shortfalls when the wind doesn't blow -- making this type of renewable energy not so reliable. For the first time, tight power supplies could force National Grid to deploy a new measure that pays households to reduce power consumption during peak demand hours.  Thousands of households with smart meters have signed up for the demand reduction program that has been pilot-tested. It could be used for the first time, according to a warning issued by National Grid.  National Grid had initially warned blackouts are possible this winter due to natural gas supply cuts following Russia's war in Ukraine.  The collapse in wind power this week could be a perfect storm as temperatures are expected to be colder than average in the first half of the week, which will send electricity demand higher. The grid operator expects peak power consumption of around 41.1 gigawatts this evening and 42.4 gigawatts on Tuesday, indicating spare capacity would tighten as the grid struggles to produce enough electricity to satisfy demand.  Bloomberg said the UK would need to fire up fossil fuel power generators due to the gap in wind power that will persist through Thursday.  It's not even the middle of winter, and the UK's grid is already at risk of failure. This doesn't bode well over the coming months if winter is harsh.  Tyler Durden Tue, 11/29/2022 - 04:15.....»»

Category: blogSource: zerohedgeNov 29th, 2022

Ford (F) Recalls 634K+ SUVs Over Malfunctioning Fuel Injectors

Ford (F) is recalling more than 634,000 SUVs due to faulty fuel injectors that may cause fuel or vapor leakage increasing the risk of fires. Ford Motor F recently announced that it is recalling more than 634,000 SUVs worldwide on the grounds of a cracked fuel injector that can cause fuel spillage or vapor leakage onto a hot engine leading to fires.The recall covers Bronco Sport and Escape SUVs from the 2020 through 2023 model years equipped with three 1.5-liter cylinder engines.Ford has received 20 incidents of fires, including three that ignited nearby structures. The company also stated that it has four reports of fires that were caused less than five minutes after the engines were turned off. Apart from these, the automaker has four injury claims not concerning burns and 43 legal claims attributed to the problem.Ford is yet to come up with repairs, and once they are made available, owners will need to schedule service with a preferred dealer. Owners will be notified by letters starting Dec 19.Owners may take their SUVs to the dealer and get a free loaner, free pickup and delivery. Dealers will inspect the injectors and replace them if necessary. Ford has also said that it's extending warranties to cover cracked fuel injectors for up to 15 years. Moreover, dealers will update the vehicles' engine-control software so that a cracked injector can be detected. Drivers will receive a dashboard message to get service. In the event of a pressure drop in the injectors, engine power will be cut off to minimize risk, and drivers will get the space to go to a safe location to stop and call for service.In September, the company recalled 277,040 passenger cars and pickup trucks in the United States because there are chances of the rearview camera lens getting cloudy and reducing visibility for the driver. The vehicles impacted by the recall have a 360-degree camera system.The recall covered certain F-Series trucks, namely F-250, 350 and 450 trucks, and the Lincoln Continental, all belonging to the 2017 through 2020 model years.Of late, Ford has gone through a spate of recalls over quality issues. In June, it issued the first recall of its Ford F-150 Lightning electric pickup trucks. This was due to a safety issue pertaining to the tire pressure monitoring system. It covered trucks with 20-inch or 22-inch all-season tires.Previously, it recalled 58,000 F-150 trucks over the driveshaft issue. In another instance, nearly 49,000 Mustang Mach-E SUVs were called back due to a malfunction that could result in the engine not starting abruptly or losing propulsion power while in motion leading to dangerous situations, especially on busy roads.Shares of F have lost 29% over a year compared with the industry’s 51% decline.Image Source: Zacks Investment ResearchZacks Rank & Key PicksF currently carries a Zacks Rank #3 (Hold).Here are some better-ranked players in the auto space – CarParts.com PRTS, sporting a Zacks Rank #1 (Strong Buy), and Allison Transmission Holdings ALSN and Genuine Parts Company GPC, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.CarParts has an expected earnings growth rate of 85% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 72.7% upward over the past 30 days.Allison has an expected earnings growth rate of 26.1% for the current year. The Zacks Consensus Estimate for ALSN’s current-year earnings has been revised 3.8% upward in the past 30 days.Genuine Parts has an expected earnings growth rate of 18.1% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 0.2% downward over the past 30 days. 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 Ford Motor Company (F): Free Stock Analysis Report Genuine Parts Company (GPC): Free Stock Analysis Report Allison Transmission Holdings, Inc. (ALSN): Free Stock Analysis Report CarParts.com, Inc. (PRTS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksNov 25th, 2022

Petrobras stock sinks below $10 on NYSE-leading volume after UBS swings to a sell rating

The U.S.-listed shares of Petroleo Brasileiro S/A sank 3.3% in very active afternoon trading Tuesday, putting them in track for the first sub-$10 close in exactly a year, after UBS swung to bearish on the Brazil-based oil and gas giant, citing concerns over "three transformational points": fuel prices, investments and overhead. Trading volume swelled to 49.1 million shares, making the stock the most actively traded on the New York Stock Exchange (NYSE). Analyst Luiz Carvalho doubled downgraded the stock to sell from buy, while slashing his price target by more than half, to $8.50 from $18.10. "On fuel prices, there is no definition of the company's new pricing policy, and we expect refining margin compression," Carvalho wrote in a note to clients. "We also think a key risk lies in higher investments as, in the past, Petrobras was unable to diversify from non-core integrated oil profitability, a trend that could potentially return." He added that diversification into renewables and energy transition would require the company to become larger, and overhead becomes a concern. The stock has tumbled 29.6% over the past three months, while front-month crude oil futures hvae dropped 8.9% and the S&P 500 has shed 3.6%.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Category: topSource: marketwatchNov 22nd, 2022

Tuesday Morning Corporation Announces First Quarter Fiscal 2023 Results

DALLAS, Nov. 22, 2022 (GLOBE NEWSWIRE) -- Tuesday Morning Corporation (NASDAQ:TUEM), a leading off-price retailer of home goods and décor, today announced its results for the first quarter fiscal 2023 ended October 1, 2022. Andrew Berger, Chief Executive Officer, stated, "Our first quarter sales performance was inline with our expectations as our teams navigated a challenging consumer environment as well as the previously discussed disruption in receipt flow due to the timing of the finalization of our strategic investment late in the quarter. As we look ahead to the remainder of the year and beyond, I look forward to working with our teams to execute our plans to drive traffic and profitability for Tuesday Morning." First Quarter Fiscal 2023 Results of Operations As of the end of the first quarter fiscal 2023, the Company operated 487 stores compared to 489 stores at the end of the first quarter fiscal 2022. Comparable store sales decreased 10.4% in the first quarter of fiscal 2023 versus the first quarter of fiscal 2022, with store inventory ending lower by 6.4% compared to the first quarter of fiscal 2022. Net sales were $157.1 million in the first quarter of fiscal 2023 as compared to $176.9 million for the first quarter of fiscal 2022. Gross margin was $34.6 million and gross margin rate was 22.0% for the first quarter of fiscal 2023. Gross margin was $51.0 million and gross margin rate was 28.8% for the first quarter of fiscal 2022. This year over year decline in gross margin was primarily due to lower sales as well as increased recognized costs related to supply chain and transportation expenses. SG&A was $60.5 million in the first quarter of fiscal 2023. As a percentage of net sales, SG&A was 38.5% for the first quarter of fiscal 2023. In the first quarter of fiscal 2022, SG&A was $60.3 million, and as a percentage of sales was 34.1%. Operating loss for the first quarter of fiscal 2023 was $25.9 million compared to an operating loss of $11.7 million in the first quarter of fiscal 2022. The Company reported a net loss of $28.2 million, or ($0.29) per share, for the first quarter of fiscal 2023. Net loss for the first quarter of fiscal 2022 was $14.6 million, or ($0.17) per share. EBITDA, a non-GAAP measure, was negative $22.7 million for the first quarter of fiscal 2023 compared to negative $9.5 million for the first quarter of 2022. Adjusted EBITDA, a non-GAAP measure, was negative $20.0 million for the first quarter of fiscal 2023. Adjusted EBITDA was negative $5.7 million for the first quarter of fiscal 2022. A reconciliation of GAAP and non-GAAP measures is provided below. The Company ended the first quarter of fiscal 2023 with $6.9 million in cash and cash equivalents, $31.4 million outstanding under its line of credit, and availability on the line of credit of $25.3 million, compared to $4.6 million in cash and cash equivalents,$22.4 million of outstanding borrowings under its line of credit and availability on the line of credit of $39.7 million in the prior year. Inventories at the end of the first quarter of fiscal 2023 were $132.5 million compared to $148.5 million in the prior year. Outlook On November 4, 2022, the Company announced changes to its leadership team including the appointment of Andrew Berger to Chief Executive Officer along with his assumption of Chief Financial Officer responsibilities. Given this recent change in leadership, the Company is withdrawing its previous guidance for full year fiscal 2023. About Tuesday MorningTuesday Morning Corporation is one of the original off-price retailers specializing in name-brand, high-quality products for the home, including upscale home textiles, home furnishings, housewares, gourmet food, toys and seasonal décor, at prices generally below those found in boutique, specialty and department stores, catalogs and on-line retailers. Based in Dallas, Texas, the Company opened its first store in 1974 and currently operates 487 stores in 40 states. More information and a list of store locations may be found on the Company's website at www.tuesdaymorning.com. Cautionary Notice Regarding Forward-Looking Statements This press release contains forward-looking statements, which are based on management's current expectations, estimates and projections. Forward-looking statements include statements regarding management's plans and strategies, execution of management's plans and strategies and future financial performance. The forward-looking statements in this press release are subject to risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Reference is hereby made to the Company's filings with the Securities and Exchange Commission, including, but not limited to, "Item 1A. Risk Factors" of the Company's most Annual Report on Form 10-K for the fiscal year ended July 2, 2022 for examples of risks, uncertainties and events that could cause our actual results to differ materially from the expectations expressed in our forward-looking statements. These risks, uncertainties and events also include, but are not limited to, the following: the effects and length of the COVID-19 pandemic; changes in economic and political conditions which may adversely affect consumer spending; our ability to identify and respond to changes in consumer trends and preferences; our ability to mitigate reductions of customer traffic in shopping centers where our stores are located; increases in the cost or a disruption in the flow of our products, including the extent and duration of the ongoing impacts to domestic and international supply chains from the COVID-19 pandemic; impacts to general economic conditions and supply chains from the disruption in Europe; impacts of inflation and increasing interest rates; any inability to effectively launch our proposed e-commerce platform or to realize anticipated benefits from the proposed Pier 1 licensing arrangement; our ability to continuously attract buying opportunities for off-price merchandise and anticipate consumer demand; our ability to obtain merchandise on varying payment terms; our ability to successfully manage our inventory balances profitably; our ability to effectively manage our supply chain operations; loss of, disruption in operations of, or increased costs in the operation of our distribution center facility; our ability to generate sufficient cash flows, maintain compliance with our debt agreements and continue to access the capital markets; unplanned loss or departure of one or more members of our senior management or other key management; increased or new competition; our ability to maintain and protect our information technology systems and technologies and related improvements to support our growth; increases in fuel prices and changes in transportation industry regulations or conditions; changes in federal tax policy including tariffs; the success of our marketing, advertising and promotional efforts; our ability to attract, train and retain quality employees in appropriate numbers, including key employees and management; increased variability due to seasonal and quarterly fluctuations; our ability to protect the security of information about our business and our customers, suppliers, business partners and employees; our ability to comply with existing, changing and new government regulations; our ability to manage risk to our corporate reputation from our customers, employees and other third parties; our ability to manage litigation risks from our customers, employees and other third parties; our ability to manage risks associated with product liability claims and product recalls; the impact of adverse local conditions, natural disasters and other events; our ability to manage the negative effects of inventory shrinkage; our ability to manage exposure to unexpected costs related to our insurance programs; increased costs or exposure to fraud or theft resulting from payment card industry related risk and regulations; our ability to meet all applicable requirements for continued listing of our common stock on The Nasdaq Stock Market, including the minimum bid requirement of $1.00 per share; and our ability to remediate our material weakness in internal control over financial reporting and to maintain an effective system of internal controls over financial reporting. The Company's filings with the SEC are available at the SEC's web site at www.sec.gov. The forward-looking statements made in this press release relate only to events as of the date on which the statements were made. Except as may be required by law, the Company disclaims obligations to update any forward-looking statements to reflect events and circumstances after the date on which the statements were made or to reflect the occurrence of unanticipated events. Investors are cautioned not to place undue reliance on any forward-looking statements. INVESTOR RELATIONS:Caitlin ChurchillICR203-682-8200TuesdayMorningIR@icrinc.com MEDIA:TuesdayMorning@edelman.com   Tuesday Morning Corporation           Condensed Consolidated Balance Sheet           (In thousands)                         October 1, 2022   July 2, 2022                 Cash and cash equivalents $ 6,912   $ 7,816     Inventories   132,464     148,462     Prepaid expenses and other   8,492     7,505     Current assets   147,868     163,783                 Property and equipment, net   26,423     28,442     Operating lease right of use assets   156,705     156,945     Other   9,839     5,006     Total Assets $ 340,835   $ 354,176                 Current portion of long term debt $ 313   $ 250     Accounts payable   52,071     40,797     Accrued liabilities and other   35,600     33,491     Operating lease liabilities   46,390     52,258     Total current liabilities   134,374     126,796                 Operating lease liabilities - non-current   120,565     115,926     Borrowings under revolving credit facility   31,355     62,191     Long term debt   37,443     28,730     Derivative liability   9,768     —     Other non-current liabilities   1,497     1,546     Total Liabilities   335,002     335,189                 Stockholders' Equity   5,833     18,987                 Total Liabilities and Equity $ 340,835   $ 354,176               Tuesday Morning Corporation         Condensed Consolidated Statement of Operations         (In thousands, except per share data)                              .....»»

Category: earningsSource: benzingaNov 22nd, 2022

Rates, Risk, & Taylor Swift

Rates, Risk, & Taylor Swift By Peter Tchir, chief strategist at Academy Securities Rates, Risk and Taylor Swift Ok, I have nothing useful to add about Taylor Swift, but I couldn’t think of anything else to act as “clickbait” for today’s T-Report. With the holiday season upon us, it seems like a good time to review a few key drivers that impact the performance (and our views) on rates and risk: Inflation. We will add some new bullet points to our inflation has rolled over narrative. The Fed. They are going to sound hawkish but the data is likely to betray them. Jobs. Sill strong, but I’m looking for cracks in the foundation to appear. Russia and Ukraine. It seems that we are at a potential inflection point. China and COVID. Are we just getting “false positive” and hearing what we want to hear, or is there more to the story? Crypto and Disruption. This continues to be a story and the wealth destruction continues. We think it remains an important issue, not just for those directly involved in the asset, but because of the drag on the economy. Framing out our view on these issues let’s us set up our views on risk for the coming weeks. Inflation Energy commodity futures took a beating last week, with WTI down 10% on the week and starting to head into some very favorable year on year comparisons. Housing data was weak, again, with the NAHB (who I view as an optimistic bunch) came in at 33, which is the lowest (except for a brief plunge as COVID shutdown the U.S.) since the 2007-2012 period. This looks bad and I see no reason for optimism given where rates are. Housing is such an important part of the economy and our own sense of net worth, this is somewhere between problematic and terrifying. A few of the “home supply” retailers seem to deliver better sales than some other areas of retail, but I’m highly suspicious that is because many people are following up on what realtors said they should do to make their house sellable. Probably a bit too cynical, but…. You can also peruse Inflation Dumpster Dive and More Inflation Dumpster Diving for thoughts that are laid out in more detail, but I also wanted to leave you with one new chart. There was a certain degree of hesitancy to use this chart, since I’m not that familiar with it and it almost looks like a typo, but it does fit my assertion that supply chain issues have been dissipating and are practically non-existent which will help keep inflation in check! Inflation data will generally drift lower and we have more than 3 weeks before the December meeting and a “lifetime” of data ahead of the February meeting. The Fed and Jobs The Fed speakers will generally steer the market towards more hiking. They will point to higher stock prices as a problem. Why anyone still thinks that the stock market is an effective judge of anything over the short term is beyond me. I fully expect hawkish leaning rhetoric that markets will ignore more and more as they see the inflation (or even deflation) story developing along the lines we’ve laid out. On jobs, there is a large divergence between the Household and Establishment portions of the NFP surveys. The last month had a surprisingly large number of jobs attributable to the birth/death model. Finally, jobs are always lagging, and will be more lagging this time as HR will be extremely reluctant to fire people after spending 2 years struggling to higher people. Weakness will first show up in service providers as companies cut costs in a variety of ways other than letting people go. Firing people will be an absolute last resort and pushing the economy to that point would be a huge mistake! Finally, we’ve been having a lot of discussions about the Tchir Job Impact Index™. Okay, there is no such index and presumably if I look hard enough, I will find one that gets me the information I’m looking for, which is: # of Jobs Lost Average Wage of Jobs Lost I expect that the job losses we see will be smaller than in past recessions, but will hit at a much higher average pay level. The jobs that will be cut (and are already getting cut) aren’t your basic minimum wage worker, they are more senior and better paying jobs. If economists make a mistake this time around, it will be focusing on the number of jobs, rather than the type of job, because it takes far fewer high paying job cuts to hit the economy than lower paying jobs (the low income job cuts hurt those families and that is awful, but from a broad economic standpoint, fewer but higher paying jobs are drivers). If someone knows of an index that tracks that, please let me know, otherwise I will start playing with that Tchir Index – the data has to be there somewhere! Russia and Ukraine We had a moment of heightened fear of escalation this week as discussed in this SITREP. There is evidence that we are at an inflection point: Putin seems to be very weak and seems willing to make some peace or truce overtures (possibly at the request of China). Ukraine seems convinced they can kick Russia out with enough weaponry. At the same time the infrastructure damage is mounting as we head into a season where you wouldn’t want to live in Ukraine without heat! NATO seems torn between the desire to provide more and better equipment to Ukraine and the mounting costs of these operations, especially with no clear endgame that is acceptable. The mass migration of Ukrainians is impacting countries and there is an increasing risk that the longer the fighting lasts in Ukraine, the more destruction, the more roots get established elsewhere, the less likely Ukrainians are to return. More energy sanctions are scheduled, and it is increasingly difficult to see how that hurts Russia any more than it hurts us. Frozen Rivers. The Geopolitical Intelligence Group continues to point out that Russia’s last best chance at making an East to West push in Ukraine is when the rivers (which flow North to South) freeze and they can cross at places other than easily defendable bridges. Most of the GIG doesn’t think a resolution is likely, but I’m leaning towards those who think it can be done. It will be difficult to convince Zelensky to give up anything, but the reality is he is fighting with money that isn’t his own and the mounting humanitarian and economic risk create enough incentives to try and get through this winter, at the least. Any peace would send energy prices plummeting! China For the past few decades, we seem to have two issues with messaging from China: They say what they think we want them to say, because it works and they don’t care if they don’t follow their own messaging. They say what they mean and we interpret it to be the message we were hoping for, not the one they actually gave. I must not be too cynical, especially around COVID 0 policy, because that seems to be in their own best interests to change, but I suspect their current negotiating stance is that they realize our attitude has shifted so much against them, that they should at least pretend to play nice. They know that if we think they are playing nice in the sandbox we will back off and give them breathing room to do what they were going to anyways, Some nice rallies in Chinese stocks, but it is still un-investible to me! China will alter their COVID 0 policy but that is a next year event, and despite the boost that would give to commodity demand, it is likely to be deflationary as a whole, since supply chain issues are already minimal and turning their factory back on, would just add to the supply (and inventory) glut that we are building towards. China is in a resource accumulation “struggle” with us, and is aligning with the autocratic, resource rich nations in the world and that is not changing. That is my overriding premise on China. Crypto and Disruption I have long said, half-jokingly that if the nuclear industry had just hired the crypto marketing people, we’d have more nuclear energy than we know what to do with. As more information comes out about the money spent on advertising, naming rights, lobbyists and “influencers” of all shapes and sizes, even I’m aghast. I had a “funny” little tweet a few weeks ago – “What is the difference between a #beaniebaby and a #FTXToken? At least you can hug a beanie baby as you cry yourself to sleep” I am coming to realize that the amount of money spent trying to pump up crypto is possibly orders of magnitude greater than what was spent on advertising beanie babies and is likely a huge driver of ad spending and social media influencers. That is money that won’t find its way into the economy right now, at least not on anything like the scale prior to that! (though there ae some great spoofs on the Matt Damon “fortune favors the brave” commercial). I see no way that the wealth destruction that has occurred that looks unlikely to be recouped any time soon, doesn’t hit the economy! This week all eyes are on the Greyscale trusts, that are now trading at large discounts to NAV and have hit retail investors hard – please read The Difficulty of Calculating NAV in the Crypto Space. There are ways it could resolve itself positively and that is the hope, but there are a couple of paths that could occur that would give crypto another kick in the teeth. Definitely tune in to Academy’s Crypto – A Brave New World webinar on Tuesday at 1pm! We are lucky to have Chris Perkins, President of CoinFund and an Academy Advisory Board member lead a discussion on the space. He knows the people involved, very well and is a thought leader in the space! I do think there is a chance, that if crypto takes another leg down, we see miners start to disappear which would be bad for crypto but great for energy prices! Rates I like rates. I like owning bonds. Yes, it is a bet on the data coming in weak. It is a bet that if the data comes in weak, it reduces FX volatility and thinking that will also help bond yields globally. I’m definitely in the camp that the recession is coming sooner (January) and will be deeper and longer than consensus. As such, I have to be long treasuries! The road to hell is paved with carry, and I hate relying on carry, but you are finally getting paid to take rate risk for the first time in years! I like bonds. It is a pound the table moment for me! I want to be long bonds (pretty much anywhere on the curve) from now to year-end unless something radical changes my view! Risk Risk is a little bit more nuanced. My face is flushed from pounding the table on bonds, but now I have to compose myself as the risk story is far more nuanced. First stage, weaker risk assets for the moment (and I literally mean for the moment). I think crypto and the disruptive space have one more leg down and it will be difficult for risk to do well as that occurs. Sentiment indicators are moving too quickly! We swing from overbought to oversold in record time. CNN is back to Greed. The AAII survey has more bulls than any other week this year! While RSI charts (one technical I like) are not overbought, they are certainly not oversold any more. The Fed wants to talk down the market and will take shots at stocks. I will be watching Wednesday very closely! If we are going to get a nice “seasonal” bounce, we should get it coming into Wednesday. With my view on rates, I should be comfortable that we get that seasonal rally, but it seems such a consensus trade, I’m not sure it will happen. Second stage, more “everything rally”. I could be convinced that this should be the first stage, but I think The pressure in equities in particular, that started on Wednesday is not over. Consensus is too bullish. If we don’t get a nice bump into Thanksgiving, my little “almanac”, actually one of the best traders I talk to, tells me that is bad. The “everything” rally into year end would be nice and I am convinced on the bond leg of that! Final stage, is “risk-off” If my current view on the economy is correct, then the data will start to come in bad enough that bonds rally and risk sells off. We aren’t there yet, but to be honest, there have been a few more moments where it felt like the market is sniffing out this trade, and maybe we’ve already have stage 2 and are into stage 3? Bottom Line Like bonds. Like steepeners. Risk, slightly cautious on at the moment: Most nervous about the energy sector and crypto related sectors. Anyone exposed to excess inventories is poised to underperform. Least nervous about credit and “income oriented” equities. We saw this week that municipal bonds, for example, were well bid, even when treasuries were getting hit. I think the bond rally is powerful enough that it will help these areas outperform other types of risk (credit spreads may leak wider, but will outperform general equities, for example). From my perspective Russia and China have the greatest potential to be “game changers” to my forecast. Maybe something will happen, outside of those factors to change my tune on the economy, inflation and jobs, but I think the market will continue to move in my direction too many who got “transitory” wrong last year and are now in the process of getting it wrong in the other direction right now. Good luck! Hopefully my views on risk weren’t too confusing and now we can get back to our hunt for cheap Taylor Swift tickets. Tyler Durden Mon, 11/21/2022 - 07:40.....»»

Category: blogSource: zerohedgeNov 21st, 2022

Labour MP Diane Abbott Says Rape Of Teenage Boy At Refugee Hotel "Is What Happens When You Demonize Migrants"

Labour MP Diane Abbott Says Rape Of Teenage Boy At Refugee Hotel "Is What Happens When You Demonize Migrants" Via Remix News, After two sexual assaults at a refugee hotel housing both child and adult asylum seekers, Labour MP Diane Abbott criticized Home Secretary Suella Braverman for her anti-migrant rhetoric... Former shadow home secretary for the U.K. Labour party, MP Diane Abbott A U.K. Labour MP is under fire for suggesting the rape of a teenage boy at a hotel accommodating asylum seekers in northeast London last month “is what happens when you demonize migrants.” Diane Abbott, the former shadow home secretary in ex-Labour leader Jeremy Corbyn’s shadow cabinet, made the remarks in a tweet published on Thursday afternoon. She referenced the plight of a teenage boy who was raped at a hotel housing asylum seekers in the London borough of Waltham Forest. The attack reportedly took place on Oct. 5 but has only just come to light. “Officers attended and spoke to the victim, a boy in his teens, and his family,” a spokesperson told Sky News on Thursday. “Specialist support is being provided. “A man, aged in his 30s, was arrested at the scene and taken into custody,” they added. Abbott called the incident a “terrible case,” before suggesting that “it is what happens when you demonize migrants and take no responsibility for safeguarding migrant children.” She ended the tweet by calling for the ousting of current Home Secretary Suella Braverman. The accommodation facility in Waltham Forest is currently housing both child and adult asylum seekers. There are reportedly 150 children and 250 adults residing at the facility. It is not known whether the children are all unaccompanied asylum seeking children (UASC) or children who have arrived with parents. Another incident allegedly took place at the same facility, which saw a male claiming to be aged 17 arrested on Sept. 11 and charged with one count of sexual touching of a child under 13. Labour MPs have called for the resignation of Braverman due to the overcrowding of facilities, including at the Manston immigration processing center in Kent, a facility that has a capacity for 1,600 people, is intended to be used solely for processing, and is currently accommodating around 3,500 asylum seekers. Braverman has vowed to tackle the crisis, as well as bring down the cost to taxpayers for housing those awaiting processing for asylum. Her promise came after it was revealed by Home Office staff during a parliamentary select committee hearing last week that Britons are paying almost £7 million a day to house asylum seekers in hotels. “The number of people arriving in the UK via small boats has reached record levels and continues to put our asylum system under incredible pressure,” a Home Office spokeswoman explained. “We urge anyone who is thinking about leaving a safe country and risk their lives at the hands of criminal people smugglers to seriously reconsider. Despite what they have been told, they will not be allowed to start a new life here,” she added. Braverman recently described the current numbers arriving in Kent as an “invasion,” and although her rhetoric was heavily criticized by Albania’s Prime Minister Edi Rama on Wednesday, many supporters of Braverman say there is no other way to describe Britain’s current migration crisis. More than 12,000 of the 40,000 arrivals this year to Britain via the English Channel have originated from Albania, despite Rama admitting on Wednesday that it is a “safe country of origin.” He suggested that rather than fuel xenophobia by highlighting the number of Albanian arrivals, the British government should better focus its efforts on securing its own borders. Tyler Durden Wed, 11/09/2022 - 05:00.....»»

Category: blogSource: zerohedgeNov 9th, 2022

Costco stock cut to market perform at Wells Fargo on headwinds

Wells Fargo analyst Edward Kelly on Monday cut his rating on Costco Wholesale Corp. to equal weight from overweight and reduced the retailing giant's price target to $490 a share from $600 a share. "COST remains a high-quality name, but we see a number of hurdles in the path of this rich multiple stock moving forward," Kelly said. Risks include slower price increases in food, weakening consumer spending and an eventual pullback in fuel margins, as well as currency exposure. "We see more risk to consensus estimates going forward than upside potential, not a good set-up for this name given its valuation," Kelly said. A potential hike in membership fees and a special dividend in 2023 provide some support for the stock, but "both seem anticipated at this point," he said. Shares of Costco fell 1.6% in premarket trades. The stock is down 14.3% in 2022, compared to a 20.9% loss by the S&P 500 .Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Category: topSource: marketwatchNov 7th, 2022

Is Following ESG Criteria Breaking The Law?

Is Following ESG Criteria Breaking The Law? Authored by Kevin Stocklin via The Epoch Times (emphasis ours), One problem for CEOs who direct their companies to follow the goals of environmental, social, and governance (ESG) criteria is that in doing so, they may be breaking the law. According to legal experts, ESG initiatives can cause companies to break antitrust, civil rights, and Employee Retirement Income Security Agency (ERISA) laws. “The way ESG is being implemented is completely antidemocratic, which is to say that they are just flouting laws,” George Mason University law professor Todd Zywicki told The Epoch Times. “They’re flouting democratically elected laws and bringing things about that are often illegal.” A judge's gavel. (Dreamstime/TNS) Violation of Antitrust Laws According to a report titled “Liability Risks for the ESG Agenda” (pdf), by Washington D.C. law firm Boyden Gray, companies that take part in coordinated actions against other companies or industries could be violating U.S. antitrust laws. The report states, “Federal law prohibits companies from colluding on group boycotts or conspiring to restrain trade, even to advance political or social goals.” It cites the Sherman Act of 1890, which prohibits “every contract, combination … or conspiracy in restraint of trade or commerce.” Supreme Court Justice Thurgood Marshall wrote on this subject, commenting that “antitrust laws in general, and the Sherman Act in particular, are the Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our free-enterprise system as the Bill of Rights is to the protection of our fundamental personal freedoms.” Hundreds of the world’s largest corporations have signed joint pledges through international clubs such as Climate Action 100+, the Glasgow Financial Alliance for Net Zero (GFANZ), the Net Zero Banking Alliance, the Net Zero Asset Managers Alliance, and others to reduce the use of fossil fuels. GFANZ, which includes 550 global corporations as members, states that “all members have independently committed to the goal of net zero by 2050, in addition to setting interim targets for 2030 or earlier and reporting transparently on progress along the way.” GFANZ banking members include Bank of America, Citibank, JPMorgan Chase, Wells Fargo, BlackRock, Morgan Stanley, and Goldman Sachs. Climate Action 100+ includes 700 investment companies representing $68 trillion in assets; it also includes 166 companies with a combined market capitalization more than $10 trillion. Among the hundreds of members of Climate Action 100+ are some of the world’s largest and most powerful companies, including Boeing, BP, Caterpillar, Chevron, Dow, Exxon, Ford, Honda, Lockheed Martin, Mercedes, Nestle, Nissan, PepsiCo, Proctor & Gamble, Raytheon, Siemens, Coca Cola, Toyota, United Airlines, American Airlines, Walmart, BlackRock, State Street, Goldman Sachs, Fidelity, PIMCO, and Allianz. It also includes America’s largest state pension funds, such as CalPERS, CalSTRS, New York City Pension Funds, and New York State Common Retirement Fund. The Boyden Gray report notes that the argument that ESG advocates make—that companies which follow ESG guidelines are better investments —“relies heavily on bandwagon effects.” In other words, if enough asset managers collaborate to shift their investments toward ESG-compliant companies, the shares of those companies become more valuable; and even more so if governments subsidize industries like wind and solar, while punishing fossil fuel companies. Violation of Civil Rights Laws Beyond antitrust, another area where ESG may run afoul of America’s laws is where the push for racial and gender equity violates the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, sex, religion, or national origin. In step with ESG social justice goals, United Airlines announced in April 2021 that it would set racial and gender quotas when hiring pilots. The company stated that “our flight deck should reflect the diverse group of people on board our planes every day. That’s why we plan for 50 percent of the 5,000 pilots we train in the next decade to be women or people of color.” A number of recent court rulings have underscored the validity of U.S. laws regarding racial discrimination. In June 2021, a federal judge ruled that the Biden administration’s farming grants, which gave preference to racial minorities, were illegal. In a separate case, the courts ruled that COVID-relief grants by the Biden administration that excluded white restaurant owners were also illegal. But America’s civil rights laws go beyond government policy to include private industry as well, opening companies up to lawsuits from employees. In August, for example, American Express became the latest company to face an employee lawsuit for racial discrimination. Brian Netzel, a decade-long employee who was fired in 2020 on what he claims are racial grounds, stated in his class-action lawsuit that American Express “gave preferential treatment to individuals for being black and unambiguously signaled to white employees that their race was an impediment to getting ahead in the company.” In October 2021, a white male employee was awarded $10 million by a jury that agreed with his claim that he was fired as part of a race-based policy by his employer, Novant Health. After five years of positive work reviews, David Duvall was fired “without warning or cause as part of an intentional campaign to promote diversity in its management ranks; a campaign [Novant] has boasted about publicly,” his suit stated. “It’s been well known for decades that quotas are illegal,” Zywicki said. “But when you start looking at things like racial sensitivity training, they’re engaging pretty much in rampant stereotyping, negative stereotyping of certain groups, and they are engaging in rampant preferences for others. All of this runs pretty clearly up against existing civil rights laws.” Diversity, Equity, and Inclusion (DEI) programs, a component of ESG, are coming under fire, both as mandatory employee training and as hiring criteria. It was reported on Nov. 2 that University of North Carolina’s School of Medicine “forces applicants, students, and professors to constantly prove their commitment to the tenets of diversity, equity, and inclusion as a prerequisite to advancement, rather than basing such decisions on merit alone.” This was based on a report by a nonprofit called Do No Harm, which charged that one of UNC’s main criteria for hiring and promotion of teachers was “a positive contribution to DEI efforts.” Stanley Goldfarb, the chairman of Do No Harm, stated in a letter to the school that “it is inappropriate to require that candidates for promotion and tenure demonstrate their commitment to a political ideology. Forcing candidates to declare their support for DEI when many undoubtedly oppose it would compel dishonesty.” This report comes amid a case before the U.S. Supreme Court wherein UNC was charged with having unconstitutional race-based admission standards. Violation of Fiduciary Laws A third area where ESG clashes with U.S. law regards the legal obligation of fund managers and corporate executives to act in good faith and in the best interests of investors and shareholders. The Employee Retirement Income Security Act, passed in 1974 to address corruption and misuse of pension money, requires that private pension fund managers invest “solely in the interests of participants and beneficiaries.” It set what is called a “prudent expert” standard of care for fund managers and allows fund beneficiaries to sue managers for failing to uphold this standard. While ERISA applies to corporate pension funds, many U.S. states have applied similar language to public pension funds. Currently, 24 states forbid ideological investing for their public pension funds, including ESG. An August letter to BlackRock, signed by 19 state attorneys general, for example, charged that BlackRock had a “duty of loyalty” to state pensioners who invested in its funds and that “your actions around promoting net zero, the Paris Agreement, or taking action on climate change indicate rampant violations of this duty, otherwise known as acting with ‘mixed motives.’” In response, BlackRock wrote that “one of [its] most critical tasks as a fiduciary investor for our clients is to identify short- and long-term trends in the global economy that may affect our clients’ investments.” The letter states that “governments representing over 90 percent of global GDP have committed to move to net-zero in the coming decades. We believe investors and companies that take a forward-looking position with respect to climate risk … will generate better long-term financial outcomes.” State attorneys general disagreed, stating that despite climate-change rhetoric, “governments are not implementing policies to require net zero … In particular, the United States has not implemented net-zero mandates. Despite doing everything in his power at the beginning of his presidency to shut down fossil fuels, even President Biden is appearing to reverse course given the harm his inflationary policies have inflicted on the American people.” In October, Swiss bank UBS downgraded the shares of BlackRock, stating that “as [BlackRock’s] performance deteriorates and political risk from ESG has increased, we believe the potential for lost fund mandates and regulatory scrutiny has recently increased.” In addition to the risk that ESG asset managers violate their fiduciary duty to investors, there is also the risk that corporate managers violate their duty to act in the best interest of the shareholders of the company. Read more here... Tyler Durden Sat, 11/05/2022 - 14:30.....»»

Category: blogSource: zerohedgeNov 5th, 2022

New videos from a sailor show "horrible" polluted drinking water on a US Navy aircraft carrier

Videos obtained by Insider show gray, murky water gurgling from the Lincoln's drinking fountains, water recently confirmed to have been polluted. Right to left: Water from a fountain on the USS Abraham Lincoln; the USS Abraham Lincoln.Courtesy of USS Abraham Lincoln sailor; Bettmann/Getty Images The US Navy found drinking water on an aircraft carrier was polluted with bacteria and bilge water. Videos shared with Insider by a USS Abraham Lincoln sailor show murky water bubbling out of drinking fountains and sinks on September 21-22. The sailor told Insider that the water smelled and tasted "horrible" and said "you can't escape it." Videos from aboard the US Navy aircraft carrier USS Abraham Lincoln obtained by Insider just days after the Navy determined that the ship's drinking water was contaminated by bilge water show gray, murky water coming out of drinking fountains and sinks.One sailor told Insider "it was horrible" and that at times the water the crew used to drink, bathe, and cook appeared "black." Another could be heard in a video saying it smelled "like shit."Sailors on the Lincoln first noticed an unusual "odor and cloudy appearance" in the ship's water on September 21 while at sea, according to a statement released by the Navy earlier this month. Testing the next day revealed the presence of E. coli bacteria in a few of the Lincoln's potable water tanks, the Navy said.But the E. coli didn't cause the smell and discoloration. On October 21, a month after issues were first detected aboard the carrier, the sea service said that it determined that the ship's water supply had been polluted by bilge water, wastewater that collects in the bowels of the ship.A sailor, whose identity is known to Insider but is being withheld due to concerns about the possibility of retribution, told Insider that the polluted water was inescapable. The sailor said they reported stomach issues after drinking the water last month but were told to go back to work. Other shipmates, the sailor added, reported experiencing rashes. The Navy, however, said earlier this month that no sailors experienced any health issues related to the ship's water quality.'You still can't escape it'  The sailor recalled feeling thirsty when they woke up for breakfast on September 21 and heading to a water fountain for a quick sip."It tasted just horrible," they said.The sailor thought it tasted like fuel, but they figured they were just being affected by the smells from the flight deck.At breakfast, however, the sailor heard other shipmates complaining that water from fountains and sinks around the ship smelled strange. In footage shared with Insider, one sailor can be heard saying the water "smells like shit." Still, the sailor said, the crew was drinking it.The sailor said the Lincoln's commanding officer "didn't come on and make an announcement about it until after everyone had already taken their showers and drank the water."The commanding officer did eventually speak to the crew,  the sailor said, but she told people not to worry, stressing that there was no jet fuel contaminating the water like there was recently on another aircraft carrier, USS Nimitz.The commanding officer later acknowledged the presence of E. coli bacteria in the ship's water, but expressed uncertainty as to whether it was "good or bad," the sailor said, adding that they "were never told not to drink the water." Insider obtained recordings of the announcements made to the crew.The Navy said bottled water was provided to the crew, but the sailor said it was difficult to find.The ship's vending machines and store sold out of water immediately and weren't restocked, the sailor said. Crewmembers eventually started relying on Gatorade and soda. "Even if we opted out of not drinking water for a few days, you still can't escape it because we still have to shower," the sailor said. "We still were eating the food … they cook everything with water."Bilge water in the water tanksBy October 3, the Lincoln had returned to San Diego's Naval Air Station North Island, where it was connected to the city's local water supply, the Navy said in an October 13 statement on the presence of E. coli bacteria in the water.The Nimitz-class aircraft carrier USS Abraham Lincoln transits the Indian Ocean.Stocktrek Images/Getty Images"The three tanks that were found to have water with E. coli also contained the water with the odor and cloudiness," Naval Air Forces Cmdr. Zach Harrell explained to Insider. "Those tanks were immediately isolated and secured from the potable water system." The sailor Insider spoke with said the ship's commanding officer made an announcement on October 21 saying that more tests were being conducted as it was unclear what had caused the water to become discolored and develop an unusual smell.Navy officials released a statement the same day, however, disclosing that the day before it had been determined that "bilge water entered one of the potable water tanks through a hole that was found in the tank's air vent line, causing the cloudy appearance and odor in the ship's potable water."Bilge water is excess water that drains from the upper decks or interior areas of a ship and is collected in the lowest compartments, according to the Environmental Protection Agency.This water can seep down from the flight decks and hangars were aircraft are stored and readied, or originate in the engineering spaces deep down in the ship where the crew maintains the many systems that keep the ship running. The consistency of a ship's bilge water can vary, but it is wastewater that can contain any number of potentially hazardous substances like fuel, oil, paint, so-called "forever chemicals" in fire-fighting foam, and even sewage.'It's always the mission in their mind'Though the Navy has said there were no related illnesses, the sailor said they experienced some stomach issues — initially believing it may have been related to food poisoning — and even sought medical attention for the issue, but they were only given Pepto-Bismol and told to go back to work. They said a few of their friends had developed rashes but didn't go seek medical treatment. Instead, they just "sucked it up" and waited for it to pass."I felt like we were going crazy because [the commanding officer] was sitting here telling us that there's nothing in it, but we're sitting here drinking it and smelling it and it just smells horrible," the sailor said. The Nimitz-class aircraft carrier USS Abraham Lincoln transits the Pacific Ocean.US Navy photo by Petty Officer 3rd Class Travis K. MendozaThe sailor accused the Navy of downplaying the severity of the contamination and said all they want from the ship's leadership is transparency."It's always the mission in their mind. That's what they say all the time. It's always the mission that comes first to them, even if it's putting other lives at risk," the sailor said.  The sailor said the water's strange smell and appearance still lingers in some places, though the Navy said it abated weeks ago.The Lincoln is the second aircraft carrier to deal with water contamination within the last few weeks. Just days before issues were first reported on the Lincoln, the Navy discovered what it described as "traces" of jet fuel in the water aboard the USS Nimitz. A sailor on that ship, and their parents,  told Insider that the contamination was much worse than what the Navy originally revealed publicly. And contaminated water on Navy ships is not limited to these two aircraft carriers. Navy and Marine Corps veterans recently told Insider that sailors on flattops, aircraft carriers and amphibious assault ships, have grappled with water contaminated by jet fuel for decades.The Navy did not respond to Insider's request seeking comment on allegations and concerns raised by sailors, the problem of contaminated water on its aircraft carriers and other vessels, or service plans to proactively prevent the issue from coming up again.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 27th, 2022

Kia recalls 72,000 Sportage models, says park outside due to engine fire risk

Kia Sportages are being recalled for a second time over what the National Highway Traffic Safety Administration is calling a fire risk in the engine area......»»

Category: topSource: foxnewsOct 27th, 2022

They Blinked: Bank of Canada Hikes Less Than Expected, Sparking Debate If Fed Will Also "Surprise" Next Week

They Blinked: Bank of Canada Hikes Less Than Expected, Sparking Debate If Fed Will Also "Surprise" Next Week First it was Australia, now it is Canada's turn to hike less than expected. Moments ago Canada’s central bank unexpectedly slowed its pace of hiking, increasing its benchmark interest rate by just 50 basis points (to 3.75%) rather than the 75-basis-point hike expected by both markets and most economists. This was the smallest hike since June (July was 100bps, September 75bps). It appears a bigger move was too much to stomach in a decision that also saw Governor Tiff Macklem and his officials raise the prospect the economy could fall into a technical recession. To justify its decision, the bank revised down its growth forecasts, predicting the economic expansion will stall and possibly even contract in coming months. The Bank of Canada also expects inflation will fall sharply to below 3% by the end of next year - within its target range for the first time since early 2021 - as higher borrowing costs curb spending. “Future rate increases will be influenced by our assessments of how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflationary expectations are responding,” the bank said in the rate statement. To somewhat ease the impression it is turning dovish, the Bank of Canada reiterated that it “expects” to continue raising interest rates saying that "given elevated inflation and inflation expectations, as well as ongoing demand pressures in the economy, the Governing Council expects that the policy interest rate will need to rise further", and retained hawkish language on inflation. But the surprise move will raise questions about the central bank’s appetite to impose further damage on Canada’s economy. Officials said consumer price gains remain broad- based with core measures showing no “meaningful evidence” that underlying pressures are easing, adding that near-term expectations are still elevated, “increasing the risk” that inflation becomes entrencheed. That said, there was little in the statement that would indicate what it all means for the terminal rate, currently expected by markets to hit 4.5% by early next year. According to Bloomberg, the central bank may just want to get there more slowly, but officials also may be rethinking how much the nation’s highly indebted households can cope with higher borrowing costs. Macklem may have more to say on this at his 11 a.m. press conference. The Bank of Canada reiterated in its Monetary Policy Report that it estimates its nominal “neutral rate” for the economy at about 4.5%, similar to the US. “We are resolute in our commitment to restore price stability for Canadians and will continue to take action as required to achieve the 2% inflation target,” the bank said. But what is most important, is that the half-point hike means the Bank of Canada - viewed by some as a "leading indicator" for the Fed - could be moving out of step with the US Federal Reserve, which is expected to hike by 75 basis points next week. It’s a risky attempt at divergence that will merely weaken Canada’s currency, loosen financial conditions, drive up prices for imported goods and fuel inflation further. Essentially, unless inflation does slow sharply, the BOC will merely have to hike more. It is also true that the smaller-than- expected rate hike comes amid an increasingly pitched political debate over monetary policy in North America. Macklem is taking fire from both sides of the political spectrum in Canada (and at least one former official in the Liberal government) and the decision will raise questions about whether the political heat is getting too hot for Macklem. Come to think of it, following yesterday's letter from the Democratic head of the US Senate banking committee calling on Jerome Powell to stay focused on employment as the Fed attempts to stabilize prices, i.e., stop hiking or any spike in unemployment will see Democrats squarely blaming the Federal Reserve. The Bank of Canada also joins Australia’s central bank in easing off the brakes -- with officials in both countries sharing worries about the impact of higher rates on highly indebted households. The Reserve Bank of Australia ended its streak of half-percentage-point hikes on Oct. 4, opting instead to raise the cash rate by 25 basis points to 2.6%. Canadian policymakers have hiked interest rates by 3.5 percentage points since March, one of the most forceful tightening cycles in the central bank’s history. Before the announcement, markets were anticipating a couple of smaller increases in coming months. But in the rate statement, Macklem and his officials said tighter monetary policies globally are beginning to weigh on activity around  the world. The Bank of Canada is now forecasting hardly any economic growth in the US next year. While the Canadian economy continues to operate in excess demand, the effects of higher borrowing costs “are becoming evident in interest-sensitive areas,” the bank said. “Economic growth is expected to stall through the end of this year and the first half of next year as the effects of higher interest rates spread.” The central bank cut its gross domestic product forecast for 2023 by half to 0.9%. It predicted economic growth will decelerate to an annualized 0.5% pace in the fourth quarter of this year. Officials in Canada may also be increasingly worried about growing financial stability risks associated with higher interest rates. In the MPR, the bank highlighted how “financial stresses” have increased globally. Predictably, in kneejerk reaction the Canadian dollar tumbled after the central bank hiked by less than expected... ... while Canadian bonds surged, dragging US Treasries behind them. Canada 2-year yield tumbled to 3.931% at 10:06 am ET, down as much as 22 basis points from its level just before the decision came out, while Canadian 10-year note futures surged through 123.00 level and onto highest since Oct. 5. , supporting front-end US rates as the 2s10s curve re-steepens. US yields richer by 9bp to 11bp across the curve, following wider gains across the Canadian curve; 10-year US futures top at 111-08+ with more than 30k contracts traded over 3-minute period, highest volume spike of the session. Bottom line: as more and more central banks are openly blinking, we may finally be on the verge of the long-awaited pivot. Tyler Durden Wed, 10/26/2022 - 10:18.....»»

Category: worldSource: nytOct 26th, 2022

US Futures Stabilize After Rollercoaster Session As Yuan, Chinese Stocks Crater

US Futures Stabilize After Rollercoaster Session As Yuan, Chinese Stocks Crater US stock futures steadied following a rollercoaster move earlier in the session and after Friday’s sharp rally as traders assessed moves by Chinese President Xi Jinping to tighten his grip on the nation’s leadership while keeping an eye on macro data now that the Fed is in a chatterbox blackout. Contracts on the S&P 500 edged 0.7% higher at 7:30a.m. in New York after earlier rising as much as 1.3% and dropping 0.7%, while the yield on the 10-year Treasury slipped for a second session. Nasdaq 100 futures were up 0.4% after bouncing between gains and losses earlier. Both underlying gauges are coming off their best week since June, and are entering the busiest week of the earnings season with 46% of the S&P 500’s market cap due to announce third-quarter results. A gauge of the dollar’s strength rose sharply unwinding some of Friday's losses, supported by a risk-off mood sparked by a rout across Chinese markets which saw the Hang Seng plunge 6.4%, the biggest one day drop since 2008! The offshore yen resumed its decline, tumbling by 1.3% - the biggest one-day slide since August 20019, to a record of 7.31, while the pound outperformed on bets for fiscal caution from the next UK prime minister. “Market sentiment could remain cautious near-term on China, on concerns of a shift of focus toward more state control versus a market-driven approach under the new leadership team,” said Xiaojia Zhi, the chief China economist at Credit Agricole CIB. “The exit path from zero-Covid is not yet clear.” Chinese economic data that was delayed last week and published Monday showed a mixed recovery, with unemployment rising and retail sales weakening despite a pickup in growth. Yet Xi’s Covid-zero campaign looks likely to continue to drag on the economy and there has been speculation that his “common prosperity” goal may even lead to property and inheritance taxes. “It’s clear demand is slowing but so far we’ve seen pockets of tech like software, cloud computing still being quite resilient,” said Laura Cooper, a senior investment strategist at BlackRock International Ltd., on Bloomberg TV. “We will be watching for any signs of cracks coming through that could put a dent to some of these earnings expectations.” In premarket trading, US-listed Chinese stocks tumbled, dragged lower by major internet and EV names including Alibaba, Baidu and Li Auto, which closed down more than 11%; search company Baidu was 12% lower while food delivery firm Meituan tanked more than 14%. The moves come after Chinese President Xi Jinping paved the way for an unprecedented third term as leader and packed the Politburo standing committee with loyalists. Tesla shares dropped after the company cut prices in China, reversing hikes imposed earlier this year.US stock futures steadied after Friday’s rally as traders assessed moves by Chinese President Xi Jinping to tighten his grip on the nation’s leadership. Other notable premarket movers: US-listed Macau casino stocks are also down, declining along with Chinese ADRs. Las Vegas Sands (LVS US) -7.9%, Wynn Resorts (WYNN US) -6.8%, Melco Resorts (MLCO US) -8.6% FedEx (FDX US) declines 1.9% in premarket trading after it was cut to equal-weight from overweight at Wells Fargo on concern that the revenue implications are not yet “fully captured” as the company pivots from growth and toward efficiency. Keep an eye on Williams-Sonoma (WSM US) stock as it was downgraded to underperform from hold at Jefferies, with broker saying it sees the home furnishing store operator underperforming ahead of a softer macroeconomic environment. Watch NXP Semiconductors (NXPI US) and Analog Devices (ADI US) shares as they were downgraded at Barclays, with the brokerage saying it expects cuts in the analog chip sector in the coming year and recommended “rotating out of the sub-sector sooner rather than later.” US investors have begun looking beyond the Federal Reserve’s ongoing tightening to a stage when it may begin to slow rate hikes. St. Louis Fed President James Bullard and his San Francisco counterpart Mary Daly made it clear they expect discussion at the November meeting to include debate on how high to raise rates and when to ease the pace. At the same time, Morgan Stanley’s Michael Wilson expects stocks to grind higher as markets transition to expectations of falling inflation and lower interest rates. The strategist, who correctly predicted this year’s slump, sees the S&P 500 Index bouncing as much as 15% if it breaches its 200-week moving average of 3,605 points, about 4% below Friday’s close. A similar view is held by Stifel Nicolaus & Co. strategists, who said in a separate note they see the benchmark rallying to 4,300 points in the next 6 months. "With the back end of the bond market offering real value for the first time since early 2021, rates are poised to come in," Wilson in a note on Monday. “Such a move could provide the necessary fuel for the next leg of the tactical rally in stocks until we get full capitulation on 2023 earnings estimates, something we think may take a few more months.” By contrast, Goldman Sachs Inc. strategists led by David Kostin are more cautious, seeing rising rates and slowing US growth hurting cyclicals and tech stocks. They recommend being overweight defensive sectors, as well as energy. In Europe, the Stoxx Europe 600 Index held an advance of about 1.3%. Media, utilities and travel are the strongest-performing sectors in Europe while miners and energy lag. IBEX outperforms peers, adding 0.9%, FTSE 100 lags, dropping 0.4% after Boris Johnson pulled out of the race to lead the UK’s ruling Conservative Party, placing Rishi Sunak closer to becoming the next prime minister.  A 12% slump in Prosus NV shares amid the China concerns pushed the technology sector into the red, while basic resources and energy stocks weighed on the benchmark amid lower commodity prices. Michelin shares rose as much as 3.7% in Paris trading and are the day’s top performers on the Stoxx 600 Automobiles & Parts Index, with the French tiremaker set to give a quarterly sales update on Tuesday. Here are the biggest European movers: Pearson shares jump as much as 7.8%, reaching the highest since January 2019, after the publishing and education company reported a 7% increase in underlying revenue in the first nine months of the year. Indivior gains as much as 7.6%, the most since February, after Morgan Stanley upgrades to overweight from equal-weight, describing the stock as a “value, growth and margin expansion story.” Auto Trader rises as much as 4.3% after announcing the disposal of Webzone Ltd. Peel Hunt upgrades to buy from hold, saying the sale shows the company’s “dedication to its key market.” Temenos climbs as much as 8.2%, the most intraday since mid-June, after Dealreporter reported that Goldman Sachs and Citi are sounding out interest in the buyout of the Swiss banking software developer. Prosus falls as much as 14% in Amsterdam and parent Naspers sinks as much as 14% in Johannesburg, with both declines the sharpest since March. Naspers holds a 28% stake in Tencent, which plunged in Hong Kong trading following President Xi Jinping’s move to stack his leadership ranks with loyalists. Galp drops as much as 6.1% after reporting third-quarter profit that missed the average analyst estimate. Philips falls as much as 4.5% to the lowest since 2011 after saying it would cut 4,000 jobs as part of a EU300 million cost-saving package, which analysts say may imply liquidity problems for the Dutch medical technology firm. Asian stocks fell, dragged by Chinese shares as President Xi Jinping’s move to tighten his leadership deepened investor worries, offsetting advances in Australia, South Korea and Japan. The MSCI Asia Pacific Index erased an earlier gain to drop as much as 1.2%, with Internet giants Tencent and Alibaba the biggest drags.  A selloff in Chinese stocks deepened in afternoon trading, as the Hang Seng plunged by more than 6%, its biggest drop since Lehman while the Hang Seng Tech Index crashed 9.7% to the lowest since February 2016, after Xi filled China’s most powerful bodies with close allies while securing a precedent-breaking third term. He installed six trusted associates alongside him on the Politburo’s supreme Standing Committee and put his former chief of staff Li Qiang in line for the premiership. Investors remained jittery as a leadership reshuffle highlighted Xi’s unquestioned grip over the ruling party, with allies set to take up key economic posts. An early loosening of Covid restrictions seemed less likely, while a set of long-delayed economic data showed a mixed recovery, further damping market sentiment. “The latest rally underlines our view that markets will remain volatile, and investors should prepare for large moves in both directions,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “Incremental improvements in inflation or labor market data, indications of economic resilience, any softening of language from the Fed, has the potential to drive a market bounce, as we have seen in recent days.” “Markets may be hoping now that the leadership transition is finalized, the focus will turn to the economy and mending the property sector,” said Marvin Chen, a strategist at Bloomberg Intelligence, adding that property investment is still a weak spot for the economy. “Still, these may take time. We may not see much change to Covid policies in the near term.” The declines in Chinese shares contrasted with the upbeat mood elsewhere in Asia, buoyed by declines in US Treasury yields and Federal Reserve officials’ indications of a potential slowing of rate hikes. Markets were closed for holidays in Singapore, India, Malaysia, Thailand and New Zealand In FX, the Bloomberg Dollar Spot Index rose, paring some of Friday’s losses and the greenback was steady or higher against all of its Group-of-10 peers. The pound jumped and gilts led Treasuries and European bonds higher as investors bet that Rishi Sunak would bring more stability to the country’s financial markets. Initial moves were however tempered, and the pound inched lower, sliding back under 1.13 after earlier rallying by as much as 0.9% to $1.1409. China’s offshore yuan led the decline in most emerging Asian currencies as traders assessed the impact of President Xi Jinping’s consolidation of power. Indonesia’s rupiah outperformed peers, supported by higher nickel prices. China’s onshore yuan weakened to a 14-year low while stocks headed for their biggest daily plunge in Hong Kong since the 2008 global financial crisis. Market setbacks following the reshuffle highlighted President Xi Jinping’s unquestioned grip over the ruling party and showed deep disappointment over a likely continuation of policies staked on Covid Zero and state- driven companies. The euro retreated after earlier rising to more than a two-week high of $0.9899. Eurozone composite PMI fell to 47.1 in October; economists had expected 47.6 The yen fell by more than 1%, to trade above 149 per dollar, after earlier surging to as much as 145.56 after suspected interventions by Japanese authorities Australian dollar declined against all of its G-10 peers after the Reserve Bank said it isn’t yet worried about the risk of imported inflation from a falling currency. Reports of fresh Covid restrictions in Guangzhou helped fuel a drop in China stocks and the yuan, pushing the Aussie even lower In rates, Treasuries trade off best levels of the session, although intermediate and long-end yields remain richer by 5bp-6bp. Gilts lead a global bond market rally, with front-end yields down nearly 40bp after Rishi Sunak emerged as the frontrunner to become new UK Prime Minister.  10-year TSY yields trade around 4.15%, richer by ~7bp on the day, trailing gilts by 18bp, bunds by 4bp in the sector; US 2s10s is ~5bp flatter on the day while gilt curve steepens. Treasuries extended their late-Friday rally during Monday’s Asia session, adding to a move sparked by comments from Fed’s Daly, who said policy makers should start planning for a reduction in the size of interest-rate increases, and a WSJ article predicting they will debate the size of future hikes in November. According to Bloomberg, dollar issuance slate includes OKB $1b 3Y and Cades 3Y; $20b of new bond sales are expected this week as companies emerge from earnings blackout periods; banks including JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and Bank of America Corp. could all come to market soon. Commodities were clipped as the USD rebounded and recessionary concerns mount (again); crude benchmarks are hampered on such factors, though similarly to US equity futures have recently eased off lows. Specifically, WTI and Brent benchmarks post downside of circa. USD 1.00/bbl compared to losses just shy of USD 2.00/bbl at worst. Both precious and base metals are broadly speaking under pressure; currently, Gold is impaired by circa. USD 10/oz and has been pushed back below the 10-DMA at USD 1650/oz. QatarEnergy head said the Co. is open to discussing working with Shell (SHEL LN) in all energy sectors, via Reuters. Looking at today's calendar, we get the US October PMIs, and September Chicago Fed national activity index, we also get PMI updates from Japan, UK, Germany, France and the Eurozone. Market Snapshot S&P 500 futures up 0.7% to 3,792 STOXX Europe 600 up 0.5% to 398.32 MXAP down 1.1% to 134.36 MXAPJ down 2.0% to 431.12 Nikkei up 0.3% to 26,974.90 Topix up 0.3% to 1,887.19 Hang Seng Index down 6.4% to 15,180.69 Shanghai Composite down 2.0% to 2,977.56 Sensex up 0.2% to 59,307.15 Australia S&P/ASX 200 up 1.5% to 6,779.36 Kospi up 1.0% to 2,236.16 German 10Y yield down 0.2% at 2.41% Euro down 0.3% to $0.9831 Brent Futures down 1.8% to $91.86/bbl Gold spot down 0.6% to $1,647.67 U.S. Dollar Index up 0.25% to 112.29 Top Overnight News from Bloomberg A sense of exasperation swept across Chinese markets as President Xi Jinping moved to stack his leadership ranks with loyalists, with stocks capping their worst day in Hong Kong since the 2008 global financial crisis and the yuan weakening to a 14-year low The ECB is priming another hefty hike in interest rates this week as the attention increasingly switches to how high it will eventually push Japan’s government will set out its expectation that the central bank watches the impact of moves in financial markets while emphasizing the two sides’ cooperation on policy, according to a draft of an upcoming stimulus plan obtained by Bloomberg Most of Japan’s currency intervention, confirmed and suspected, took place outside of regular trading hours, with the exception of probable action Monday -- unlike moves in 2010 and 2011 to weaken the yen. In contrast to that period, the government has only stated it intervened once, with the reluctance to do so seen as an additional tool to deter speculators Much of continental Europe is poised for an unusually warm end to the month, with Paris seeing temperatures more common on a summer day than well into the heating season A more detailed look at global markets courtesy of Newsquawk Asia-Pacififc stocks traded mixed after the initial optimism from Wall Street on Friday began to fade. ASX 200 was boosted by its commodities sector as the rise in underlying metals supported mining names in the region. Nikkei 225 was also  firmer but lagged behind peers (ex-China) following the touted FX intervention on Friday and again on Monday. KOSPI was led by gains in its IT names, but the region felt some jitters following an exchange of fire between North and South Korea after a North Korean boat crossed the South Korean maritime border. Shanghai Comp. initially traded flat after Chinese President Xi secured an unprecedented third term as the party leader, as expected. Chinese President Xi also suggested China's economy has high resilience and sufficient potential. The index also saw some brief upside after China released a myriad of delayed economic data, with Q3 GDP Y/Y topping forecasts and Trade Balance printing a larger surplus than expected, whilst exports also increased more than forecast, although these gains pared back. Hang Seng buckled as Xi’s leadership overhaul could prove to result in prolonged oversight and less autonomy for Hong Kong, with the Hang Seng Tech Index slumping over 5% and Alibaba, Tencent, JD.com, Baidu and Meituan shedding as much as 7-10%. Asia Data Recap Chinese GDP (Q3) Y/Y 3.9% (Exp. 3.3%, Prev. 0.4%); Q/Q 3.9% (Exp. 3.5%, Prev. -2.6%) Chinese Trade Balance (Sep) (USD) Y/Y 84.7bln (Exp. 80.3bln, Prev. 79.39B); Exports +5.7% (Exp. +4.0%, Prev. 7.1%), Imports +0.3% (Exp. 1.0%, Prev. 0.3%) Chinese Retail Sales (Sep) Y/Y 2.5% (Exp. 3.0%, Prev. 5.4%); YTD Y/Y 0.7% (Exp. 0.9%, Prev. 0.5%) Chinese Industrial Output (Sep) Y/Y 6.3% (Exp. 4.8%, Prev. 4.2%); YTD Y/Y 3.9% (Exp. 3.7%, Prev. 3.6%) Chinese Fixed Investments (Jan-Sep) 5.9% (Exp. 6.0%) Australian Composite PMI (Oct) 49.6 (Prev. 50.9); Services PMI (Oct) 49.0 (Prev. 50.6); Manufacturing PMI (Oct) 52.8 (Prev. 53.5) Japanese Jibun Manufacturing PMI (Oct) 50.7 (Prev. 50.8); Services PMI (Oct) 53.0 (Prev. 52.2); Composite PMI (Oct) 51.7 (Prev. 51.0) Top Asian News China suspended in-person schooling and dining-in at restaurants in a district in Guangzhou, "stoking concerns about the potential for disruption in the southern Chinese manufacturing hub that’s home to about 19mln people", Bloomberg reported. PBoC injected CNY 10bln via 7-day reverse repos at a maintained rate 2.00% for a daily injection of CNY 8bln. Japan's Top Currency Diplomat Kanda will not comment on whether they intervened in FX markets and said there is no change in stance that "we are ready to take action 24/7" and will continue to take appropriate action, via Reuters. Japan's Top Currency Diplomat Kanda offered no comments on intervention on Monday morning. Japanese Finance Minister Suzuki said no comment on FX intervention; currently trying to confront speculators; monitoring FX with a high sense of urgency. USD/JPY drop on Monday likely due to intervention, according to market participants cited by Reuters. Japanese government urges the BoJ to remain vigilant to the impact of sharp market moves, according to a draft document cited by Reuters. The Japanese government and the BoJ decided to intervene in FX on Friday by buying the Yen and selling the Dollar, according to Nikkei sources citing sources. Japan's FX intervention on October 21st is estimated at JPY 5.4-5.5tln, according to market sources and calculations cited by Reuters. BoJ Governor Kuroda said CPI growth beyond next FY likely to fall below 2%, will continue to put all effort into achieving price target along with rise in wages. Japanese gov't expects the BoJ to watch the impact of market moves, via Bloomberg citing a document; to collaborate closely with the BoJ on the policy mix; Finance Minister will not comment on FX intervention. Japan is to ease rules in relation to brokerages offering investment advice, according to reports citing Nikkei. Japanese Economy Minister Yamagiwa is planning to step down, according to NHK. South Korea is to expand its corporate-bond buying program, according to the finance minister cited by Reuters. RBA's Kent reiterated the Board expects to increase interest rates further in the period ahead; size and timing of rate increases in Australia will depend on incoming data. European bourses are mixed, though are well off lows, as initial strength faded following the open amid renewed USD strength and as PMIs flash ongoing recessionary/inflationary concerns. Sectors are a touch mixed amid the above action, Energy remains the standout laggard amid the complex's broader price action. US futures have managed to make their way back to being essentially unchanged on the session, as the initial bout of underperformance eases as US participants enter the fray pre-PMIs. Top European News UK's Boris Johnson has pulled out of the Conservative Party leadership contest, according to The Times' Swinford. UK's Boris Johnson and Rishi Sunak failed to strike a deal in talks on Saturday, according to the Times. UK leadership candidate Rishi Sunak so far received support from 147 MPs vs 24 for Penny Mordaunt. The deadline to reach the 100 threshold is at 14:00BST/09:00EDT on Monday. UK leadership candidate Penny Mordaunt will stay in the race as she reportedly sees a route to 100 nominations now Boris Johnson is out, according to sources cited by Bloomberg's Wickham. UK Chancellor Hunt backs Rishi Sunak for PM, via The Telegraph. UK Chancellor Hunt is said to be mulling up to GBP 20bln of tax rises in the October 31st budget, according to The Telegraph. The October 31st fiscal statement could be delayed after PM Truss' resignation, according to the FT. UK Chancellor Hunt is expected to extend the current freeze in income tax and allowances into the next parliament, according to FT citing sources. BoE's Mann said bond purchases for financial stability were targeted and temporary, and the start of bond selling on Nov 1st shows the BoE does not feel like its hands are tied. Mann said it is the BoE's job to address financial stability risks. Moody's affirmed UK's rating at Aa3; revised outlook to "Negative" from "Stable. FX Dollar regroups after Friday's reversal on less hawkish Fed dynamic and reports of Japanese intervention, DXY above 112.500 at best vs 111.760 low. Sterling underpinned ahead of deadline in race to be next UK PM with Sunak hot favourite to succeed, Cable holding within 1.1400-1.1300 range. Yen reverses from peaks as official buying momentum wanes, USD/JPY up to 149.70 from sub-145.50 at one stage. Aussie underperforms ahead of Budget that is expected to see growth forecast downgraded, AUD/USD under 0.6300 and Kiwi down in sympathy on NZ Labour Day as NZD/USD declines through 0.5700. Offshore Yuan below 7.3000 vs Buck as China tightens COVID restrictions in key southern manufacturing hub. Euro fades from a fraction below 0.9900 towards 0.9800 after broadly weak PMIs and amidst heavy option expiry interest. PBoC set USD/CNY mid-point at 7.1230 vs exp. 7.1173 (prev. 7.1186); weakest fix since June 1st 2020. Commodities Commodities clipped as the USD regains poise and recessionary concerns mount; crude benchmarks are hampered on such factors, though similarly to US equity futures have recently eased off lows. Specifically, WTI and Brent benchmarks post downside of circa. USD 1.00/bbl compared to losses just shy of USD 2.00/bbl at worst. Both precious and base metals are broadly speaking under pressure; currently, Gold is impaired by circa. USD 10/oz and has been pushed back below the 10-DMA at USD 1650/oz. QatarEnergy head said the Co. is open to discussing working with Shell (SHEL LN) in all energy sectors, via Reuters. China sold 100% of wheat offered at auction of state reserves on Oct 19th, according to Reuters citing the traded centre; sold at an average price of CNY 2,829/t. CCP National Congress Chinese President Xi secured an unprecedented third term as Chinese Communist Party (CCP) leader, as expected. The CCP amended its constitution to include "two establishes" and "two safeguards" to "cement" Xi Jinping's status as the core of the party, according to Reuters. Chinese President Xi is to head the communist party's central commission for discipline inspection, according to state media. The new CCP Politburo Standing Committee includes Li Qang, Li Xi, Ding Xuexiang, Cai Qi, Zhao Leji, Wang Huning, according to state media. The new Central Committee (comprising of 171 alternate members) does not include Liu He, Han Zheng, Sun Chunlan, Yi Gang, Guo Shuoing, Chinese President Xi said China's economy has high resilience, sufficient potential and has room for manoeuvre. Xi said China will open its doors even wider. Xi said China must ensure the CCP continues to be the backbone people can lean on, according to state media. Geopolitics Russian Defence Minister held phone calls with the US Pentagon Chief, UK Defence Minister, and the French Armed Forces Minister, according to Interfax and Reuters. French Armed Forces Minister has confirmed Russian Defence Minister told him Russia fears that Ukraine may use a "dirty bomb" on Russian territory. Russia's Shoigu warns of 'uncontrolled escalation' in Ukraine conflict, via Reuters. Ukraine's Foreign Minister spoke with US Defence Secretary Blinken and said they both agreed the Russian rhetoric on "dirty bombs" is aimed at creating a pretext for a false flag operation. They also discussed further practical steps to boost Ukraine’s air defense. Russian forces continued to target Ukraine's energy and military infrastructure over the weekend, according to the Russia Defence Ministry cited by Interfax. Russian authorities said two pilots died in a military plane crash into a residential building in Irkutsk, Russia, according to Interfax. Russian Deputy Foreign Minister said Russia completely reject any demilitarized zones in the vicinity of the Zaporozhye station, Via Al Jazeera. Russia continues to use Iranian uncrewed aerial vehicles (UAVs) against targets throughout Ukraine, according to the UK Ministry of Defence. US Event Calendar 08:30: Sept. Chicago Fed Nat Activity Index, est. -0.10, prior 0 09:45: Oct. S&P Global US Manufacturing PM, est. 51.0, prior 52.0 09:45: Oct. S&P Global US Composite PMI, est. 49.2, prior 49.5 09:45: Oct. S&P Global US Services PMI, est. 49.5, prior 49.3 DB's Jim Reid concludes the overnight wrap Morning from the middle of a forest in Center Parcs. We’ve had a biblical amount of rain, flash flooding in the resort and a weekend of over excitable children. We’re off to a safari park today where monkeys jump on your car. Only 24 hours before I can escape on a plane to New York. As we start a new week where we’re now in the Fed blackout period ahead of next week’s FOMC, we’re perhaps starting the 6th attempt this year at the Fed pivot trade. This only started on Friday as well-connected Nick Timiraos (WSJ) suggested that while a 75bps hike at the Fed’s next meeting was set to go ahead, officials were also likely to discuss “whether and how to signal plans to approve a smaller increase in December.” Whether this gets any further than the previous failed attempts to reprice markets only time will tell but with markets pricing in a terminal rate of over 5% prior to this, at least this is the first one that starts from anything vaguely resembling a realistic starting point given where inflation is. San Fran Fed President Daly also said on Friday that the Fed should start planning for a shift down in the pace of hikes but added that they are not there yet. The news helped price -8.0bps less Fed tightening by year-end on Friday, whilst also triggering a significant one-day decline in the 2yr Treasury yield of -13.8bps (-16bps post Timiraos). In turn the S&P 500 completed its strongest weekly performance since June, advancing +4.74% (+2.37% Friday). Futures are +0.3% this morning. The longer end rallied 12bps off the highs but was only -1.2bps on Friday as the same article discussed how the Fed could also signal a higher dot plot for 2023. Net net this left the biggest curve steepening since the pandemic (-12.2bps) which given that its not a huge move shows how massively flatter the curve has been since then. This morning in Asia 2 and 10yr yields are -4.3bps and -6.7bps lower respectively and this continuing the momentum from Friday. In the cold light of day (and it’s cold and dark in the forests of Center Parcs this morning), these more dovish stories are all plausible but between next week’s FOMC and the December equivalent we have CPI and NFP twice. So plenty of cold or hot water to flow under the bridge before then. On balance there are few signs at the moment that core inflation is about to see a rapid about turn and the Fed will be data dependent so it'll be impossible to have high conviction on what they do next without a strong view on the data. Before we examine the week ahead we should note that overall the 10yr yield ended last week up by +19.8bps (-1.2bps Friday), which marked its 12th consecutive weekly rise, and is also its longest run since 1984 when Paul Volcker was Fed Chair. So we need to put things into some perspective. In light of all this maybe the most interesting data this week comes on Friday with the Q3 employment cost index (DB at +1.1% vs. +1.3% last month) and the September personal income (+0.1% vs. +0.3%) and consumption (+0.3% vs. +0.4%) report, including the core PCE deflator (+0.58% vs. +0.56%). With respect to core PCE, our economists expect the Fed's preferred measure of inflation to rise by 40bps to 5.3%. Our economists highlight that as the median forecast for 2022 core PCE inflation in the Fed's Summary of Economic Projections from the September 21st meeting was 4.5%, it’s going to be tough to signal a downshift in December. Elsewhere this week the main highlights are the ECB (Thursday) and the BoJ (Friday) decisions and a huge round of earnings with big Tech the highlight. We’ll also have a new UK Prime Minister by Friday with a possibility we may have one after today’s ultra compressed rounds of Parliamentary votes. After Boris Johnson pulled out late last night it is possible that only tactical voting will stop ex-Chancellor Sunak being declared PM tonight. We’ll also see US Q3 GDP (Thursday) and flash PMIs in the US and Europe (today) and October CPIs and GDP for many European countries (Friday). There are other data which are in the day by day guide at the end as usual for a Monday but let’s take a brief look at the highlights outside the already discussed PCE. The ECB's decision on Thursday will be a big event with our European economists expecting another +75bps hike (72.3bp priced in), followed by +75bps in December (c.62bps priced in), +50bps in February (c.38bps priced), and +25bps in March, reaching a terminal rate of 3%. The press conference as ever will be a focal point and there’ll be lots of attention on technical things surrounding TLTROs and excess reserves. For more on the options here see our fixed income strategists blog from Friday here. Staying with central banks, over in Japan, the BoJ announces its decision on Friday amidst continued downward pressure on the yen, which hit a 32-year low against the dollar of 151.95 on Friday before surging again to end the week at 147.65 - c.3.5% swing while the Japanese slept after Nikkei reported fresh intervention from the Japanese authorities. The Yen has again seen a wild session in Asia. After falling again to 149.67 it surged to 145.65 and now trades at 148.88 as we go to press with no clarity on if and what intervention has been done. For US Q3 GDP this week, our US economists expect real growth to rebound to +3.0% from Q2's -0.6%. Q3 GDP figures will also be out for European countries on Friday, including for Germany and France with the former likely to be slightly negative and the latter slightly positive. Overall it’s likely to be the start of growth grinding towards or below zero and then staying negative for a few quarters. On European CPI on Friday remember September readings saw Germany's CPI reaching 10% for the first time since 1950. Earnings will come thick and fast this week, featuring the big tech, oil majors and key automakers and staples. In tech alone we have Microsoft, Alphabet (tomorrow), Meta (Wednesday) and Apple and Amazon (Thursday). A huge slug (20% by market cap) of the S&P 500 in 48 hours. Other notable tech firms reporting results will include Intel, Twitter, SAP and Samsung. The other main reporters are in the day by day week ahead at the end. Asian markets are higher outside of China/HK this morning with the Nikkei (+0.62%) and the KOSPI (+0.87%) up but with the Hang Seng (-4.99%) and the Shanghai composite (-0.89%) lower as markets worry about the policy direction of travel after the ending of the 20th Party Congress. We've also finally seen the monthly data dump out of China and despite a beat on Q3 GDP (+3.9% vs +3.3% expected) and industrial production (+6.3% vs 4.8%), we saw weaker retail sales (+2.5% vs +3.0%) and jobless rate (5.5% vs 5.2%). Looking back to last week, we've already discussed the US rates and equities pricing at the top. Over in Europe, gilts outperformed other sovereign bonds over the week as a whole thanks to the government’s Monday U-turn on the mini-budget. However, they became a major underperformer again on Friday as investors contemplated the likelihood that former Prime Minister Johnson could return to office. All-in-all that left 10yr yields down -28.2bps over the week (+14.1bps Friday), and after the close we heard that Moody’s had affirmed the UK’s credit rating but cut the outlook to negative. Elsewhere in Europe though there was a similar pattern to Treasuries, with 10yr bund yields also rising for a 12th week in a row with a +7.0bps gain over the week (+1.4bps Friday). At the same time, the STOXX 600 put in its best week since July, with a +1.27% advance (-0.62% Friday). Finally last week, European natural gas futures fell -20.02% (-10.67% Friday) to €114 per megawatt-hour after EU leaders endorsed a plan to cap gas prices. Tyler Durden Mon, 10/24/2022 - 08:12.....»»

Category: smallbizSource: nytOct 24th, 2022

A "Record" Number Of Real Estate Agents Will Quit Due To Economy, Realtor Predicts

A "Record" Number Of Real Estate Agents Will Quit Due To Economy, Realtor Predicts Submitted by QTR's Fringe Finance Since Fringe Finance has started, I’ve scoured the Earth far and wide to try and bring a perspective on real estate to the blog that is going to be both no bullshit and an unfiltered on-the-ground opinion that I know and trust (and could add value to my readers). After all, it’s an asset class that I am not nearly as in-tune with as I am with equities and, well…beer. And to be honest, I didn’t have to scour much, as a good friend of mine is a brilliant up and comer in the world of real estate in Philadelphia. I’ve worked with her several times and have known her for years - she’s insightful, pragmatic, conscientious and has a serious pulse on the industry. I know for a fact that she works her ass off, eating, sleeping and breathing real estate on the daily. As such, my kind friend, award-winning realtor Kira Mason, has agreed to drop in once in a while to offer up her take on the pulse of the industry for benefit of my readers. Kira runs the Substack Gritty City Real Estate, which you can read & follow free here and she is @kmasonrealtor on Twitter. Today’s post - free to read - is being syndicated with Kira’s permission. She will continue to contribute exclusive content for Fringe Finance readers as well. Real Estate Agents Are Feeling The Burn In the economic maelstrom within which we find ourselves thrashing around this fall, there’s been plenty of talk about the potential housing crash ahead and the future layoffs that could fuel it, but I’ve seen only a few passing comments on the job losses and pay cuts we’re almost certain to sustain within the real estate industry itself. There are more than 3 million people holding active real estate licenses in the United States, according to the Association of Real Estate License Law Officials (ARELLO). The vast majority of these are unsalaried, receive no benefits, and earn a 100% commission-based income. Due to the extreme and immediate sensitivity of agent and broker earnings to market conditions, they might be among the first to have their wages severely impacted by the recession. Even if home prices stay relatively stable in 2023 (a big if), depressed sales activity is likely to gouge away a sizable percentage of the earnings of those 3 million agents. Existing home sales in September were down 23.8% YoY, according to the National Association of Realtors. At this rate, an agent who makes $100k/year would see their annual income drop to something in the family of $76,000 if sales don’t go down any further and prices stay the same. With ample reason to believe that both of these metrics will decline in 2023, let’s just say the forecast is pretty grim. I’m going to share my story at the risk of revealing the wet spots behind my ears, because I think it’s an illustrative one. In the summer of 2019, I got my real estate license and sold a few homes part time. I left my job when COVID hit and subsequently dove into real estate full time (and then some). Although I already had my license, I was effectively part of that record-breaking wave of agents who entered the industry in 2020 and 2021. In those two years put together, more than 156k new agents began their careers; that’s 60% more than in the two years prior. Get 50% off: If you enjoy this article, would like to support my work and have the means, I would love to have you as a subscriber and can offer you 50% off for life: Get 50% off forever While the real estate licensure exam is no joke, getting started as an agent is almost embarrassingly easy relative to other careers with a similar earnings potential. The mandatory pre-licensing course can be completed in 3 months for about $400 (less with a Groupon; I’m not kidding). There are longer, more rigorous, and more expensive routes to the same destination, but as every agent will tell you, 95% of what must be memorized in order to pass the test is useless once you begin your career. Real estate is truly an apprenticeship profession. For this reason, many agents-in-training opt for the quick n’ dirty path to licensure. At least 20% of US workers decided to change careers during the pandemic. Real estate’s low barrier to entry, high earnings potential, and a record-busting housing boom were all potent motivators. According to Google Search Trends, the top job-related search in 2021 was “how to become a real estate agent”. That year, we all repeatedly heard the media quip about there being more agents in the USA than there were homes for sale. And while low inventory did mean that one’s work with a buyer was likely to be prolonged and arduous, for those who were willing to put in the hours, making money in real estate was like shooting fish in a barrel. Everyone and their brother was buying, and at least in my area, most serious shoppers were eventually ending up in new homes. As a newly full time agent in spring of 2020, the fire under my ass was a profession to which I was not eager to return. I worked about 70 hours a week almost every week for two years. Hard work paired with a booming market allowed me to double my 5-year sales goal in my first year as a full time agent.   The truth is, similarly motivated new agents are unlikely to have the same results in 2023. It’s tough to get started in real estate. In order to be any good, you really need to treat learning the ropes like a full time job. It’s essentially an unpaid internship; you don’t make any money until you manage to convince someone that you know what you’re doing, and for a while, you don’t. In the meantime, you have to pay a laundry list of dues and fees in order to keep the machinery running. It is for this reason that 87% of agents put their licenses in escrow before their 5 year anniversary. I predict that a record number of agents will hang up their Realtor® hats and find a different way to pay the bills in 2023. Many first-time buyers, the population most likely to work with newer agents, are getting priced out of the market and opting to rent. And older agents who were approaching retirement might decide that this is an opportune time. We’ve seen this before. In 2005-2006, 250k Americans got their real estate licenses (even more than 2020-2021). After the 2008 crash, 10% of agents left the industry. If you ever find me wearing this hat, please give me a wet willy. What we’re expecting to see in 2023 is a “flight to quality”; fewer transactions will be consummated, and the buyers and sellers who remain in the market are likely to be anxious and in need of an expert to help them navigate it. The experienced and the highly scrappy alone will persevere. With an oversaturated pool of real estate professionals and a housing market farting its way into oblivion like a rapidly deflating balloon, there’s no other way. I haven’t even brushed on the many real-estate-adjacent professions that are poised to share in the pain: lenders, inspectors, brokers, title companies, wholesalers, appraisers, real estate lawyers, developers, contractors, and more. My favorite Philly home inspector recently told me that he hasn’t had this little business in 16 years. We’re talking about a massive sector of the workforce; depressed transaction volume will affect all of them, regardless of what prices do. What makes agents particularly vulnerable to these housing market shifts is the fact that if we don’t close deals, we don’t get paid… not in six months, but today. There is no security net. Those of us who make it through the next few years will need a high pain tolerance, a high skill level, and a high savings account balance. About Kira Mason Kira is a realtor with Berkshire Hathaway Fox & Roach and The Kevin McGillicuddy Team, winner of the 2021 Chairman's Circle award and ranked within the top 1% of the national Berkshire Hathaway HomeServices network. She independently won Homesnap's "Fastest Growing Agent" award in 2021 and specializes in the purchase and sale of residential real estate in Philadelphia.  Kira runs the Substack Gritty City Real Estate, which you can read & follow free here and she is @kmasonrealtor on Twitter. She can be reached via e-mail at the address: contact@kiramasonrealtor.com. QTR’s Disclaimer: I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. This is not a recommendation to buy or sell any stocks or securities or any asset class - just my opinions of me and my guests. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. Positions can change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. Also, I just straight up get shit wrong a lot. I mention it three times because it’s that important. Tyler Durden Sun, 10/23/2022 - 10:30.....»»

Category: blogSource: zerohedgeOct 23rd, 2022

Natural Gas Stalls for 8th Week, Still Up Significantly YTD

Natural gas-oriented companies like EQT Corporation (EQT), Comstock Resources (CRK) and Range Resources (RRC) have seen solid gains in 2022. The U.S. Energy Department's weekly inventory release showed a larger-than-expected increase in natural gas supplies. The negative inventory numbers, coupled with other factors, meant that futures fell for the eighth week in a row to settle at its lowest level in almost three months.Despite this, the market has been kind to natural gas in 2022, with the commodity trading considerably higher year to date and hitting $10 for the first time since 2008. Natural gas stocks like EQT Corporation EQT, Comstock Resources CRK and Range Resources RRC have been some of the prime beneficiaries of the price appreciation.EIA Reports a Build Larger Than Market ExpectationsStockpiles held in underground storage in the lower 48 states rose 125 billion cubic feet (Bcf) for the week ended Oct 7, exceeding the guidance of a 123 Bcf addition per the analysts surveyed by S&P Global Commodity Insights.The increase was also well above last year’s injection of 86 Bcf for the same corresponding week and the five-year (2017-2021) average net build of 82 Bcf.The latest increment puts total natural gas stocks at 3,231 Bcf, which is still 126 Bcf (3.8%) below the 2021 level at this time and 221 Bcf (6.4%) lower than the five-year average.The total supply of natural gas averaged 105.4 Bcf per day, down 1.1 Bcf per day on a weekly basis due to a dip in dry production (from its record level) and lower shipments from CanadaMeanwhile, daily consumption rose 1.8% to 91.3 Bcf from 89.7 Bcf in the previous week, mainly reflecting a stronger power burn and increased residential/commercial demand.Natural Gas Logs its Eighth Straight Weekly FallNatural gas prices tumbled last week, following the higher-than-expected inventory build. Futures for November delivery ended Friday at $6.453 on the New York Mercantile Exchange, falling around 4.4% from the previous week’s closing. The decrease in natural gas realization — for the eighth straight week — is also the result of a boom in supplies and the prediction of mild ‘shoulder season’ weather.As is the norm with natural gas, changes in temperature and weather forecasts can lead to price swings. The latest models anticipate light temperature-driven consumption over the near term (with little use of air conditioning or heater across much of the Lower 48), which is a negative for prices.An increase in natural gas production has also kept the commodity in check. With the upstream operators finally responding to price incentives and ramping up volumes in the last two months, daily production has topped or hovered around 100 Bcf in recent weeks. This wave of new supply is expected to largely neutralize concerns that the market might enter the winter withdrawal season with gas in storage well below normal. Having said that, current inventories are still pretty tight and remain more than 6% below their five-year average.The one thing supporting natural gas is a stable demand catalyst in the form of continued strong LNG feedgas deliveries. LNG shipments for export from the United States have been robust for months on the back of environmental reasons and record-high prices of the super-chilled fuel elsewhere. Now, with the Russia-Ukraine conflict, LNG has become even more coveted. As a matter of fact, earlier this year, the United States entered into a partnership with the EU to export additional LNG to wean the bloc off its dependence on Russian natural gas supplies. This means LNG deliveries are poised to rise further, especially with natural gas supplies from Moscow to Europe squeezed following leaks in the key Nord Stream pipeline.However, the protracted downtime associated with the fire breakout at the Freeport LNG export plant in Texas has drowned out most of the positives as of now. The Quintana, TX facility — responsible for around 15% of U.S. liquefaction capacity — was knocked offline by the Jun 8 blast and is expected to only partially restart in November. Consequently, some of the LNG cargoes due for export are likely to have been diverted to the domestic market despite huge demand abroad. Final ThoughtsDespite posting an eighth straight down week with combined losses of around 30% during this period, the natural gas market is still up almost 75% so far this year. As one would expect, the loss in momentum since mid-August has also pushed gas stocks down. However, certain companies like EQT, Comstock Resources and Range Resources have handsomely benefited from the windfall from higher natural gas prices year to date. Image Source: Zacks Investment Research EQT: EQT is primarily an explorer and producer of natural gas, with a primary focus on the Appalachian Basin in Ohio, Pennsylvania and West Virginia. In terms of average daily sales volumes, EQT is the largest natural gas producer in the domestic market.The company, carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 365.2% for the current year. The Zacks Consensus Estimate for EQT’s 2022 earnings has been revised 12.3% upward over the past 60 days. EQT — valued at around $15.2 billion — has soared 88.6% n this year.You can see the complete list of today’s Zacks #1 Rank stocks here.Comstock Resources: The company is active in the Haynesville shale in North Louisiana and East Texas — a premier natural gas basin. Currently, a Zacks #2 Ranked stock, CRK has a projected earnings growth rate of 231.9% for the current year.The Zacks Consensus Estimate for Comstock Resources’ 2022 earnings has been revised 10.6% upward over the past 60 days. CRK shares have surged around 113.9% so far this year.Range Resources: The upstream firm has a strong footing in the prolific Appalachian Basin. In the gas-rich resource, RRC has huge inventories of low-risk drilling sites that are likely to provide production for several decades.Range Resources has a projected earnings growth rate of 167.8% for the current year. The Zacks Consensus Estimate for this Zacks Rank #3 (Hold) natural gas player’s 2022 earnings has been revised 1.3% upward over the past 60 days. RRC shares have climbed 51% year to date. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 Comstock Resources, Inc. (CRK): Free Stock Analysis Report Range Resources Corporation (RRC): Free Stock Analysis Report EQT Corporation (EQT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 17th, 2022