MORNING READS
- Corruption to Unlock Door to West
- Japan’s Consumer Inflation Hits Fresh 40-Year High
- Egg Prices Surge to Records as Bird Flu Hits Poultry Flocks
- As Cases Explode, China’s Low Covid Death Toll Convinces No One
- China’s Future Isn’t What It Used to Be
- France Desperately Needs Workers
- Why America’s Economy Remains Surprisingly Strong
- It’s Boom Times for Santa
- For Many Wall Street Bankers, This Year’s Bonus Season Is a Bust
- Why New Year’s Eve Revelers Will Find Fewer Places
- BlackRock’s Pitch for Socially Conscious Investing
- YouTube Paying Roughly $2 Billion a Year for NFL Sunday Ticket
- Elon Musk Says He Will Not Sell More Tesla Stock for About Two Years
- Meta Agrees to Pay $725 Million Over Cambridge Analytica Scandal
- SBF’s $250 Million Bail Is One of the Largest in US History. It Doesn’t Mean He Has That Much
- Bankman-Fried’s ‘Epic’ Legal Battle
Futures
Options
PREMIUM
PREPPER
"Dear Santa, please bring equities for next year" is the simple message from the latest Seeking Alpha poll. More than 2,300 readers responded to this week's Wall Street Breakfast poll. Asked where they would deploy most of their investing capital in 2023, a vast majority of readers said "stocks."
More than 62% of respondents will tilt most of their investments to equities (SPY) (QQQ) (IWM) (URTH), according to the results. For the more risk-averse, cash (SPRXX) at 17.5% was a favorite over bonds (TBT) (TLT) (SHY) (JNK) (LQD) (BNDW) at 12.2%, indicating that those investors are skeptical of Fed rate cuts coming next year.
The latest Summary of Economic Projections "shows the 'median' FOMCer expects short rates to rise to 5.1%, and remain there for the entirety of 2023, inflation to remain hundreds of basis points above target through the end of next year, the yield curve to remain in inversion for two more years (given the current level of long rates) and the unemployment rate to 'only' rise 110 bps from recent trough to prospective peak," MKM strategist and economist Michael Darda wrote in a note (emphasis his).
Rounding out the results, 5.4% said they will put most of their capital to work in commodities (USO) (GLD) (DBC), nudging out crypto (BTC-USD) (ETH-USD) (OTC:GBTC) at 2.7%.
Wall Street skeptical: The confidence in stocks from those surveyed is in sharp contrast to the expectations from Wall Street strategists.
Strategists expect below-average returns for the S&P 500 (SP500) (SPY) in 2023, with many of their colleagues on the economics side predicting a global recession. On average, the 2023 end price target for major Wall Street shops is 4,080, a little less than a 7% rise from current levels.
On the top end, Fundstrat's Tom Lee is the most bullish with a target of 4,750. BNP Paribas' Greg Boutle is the most bearish, predicting a drop to 3,400. Among other notable calls, J.P. Morgan's Dubravko Lakos-Bujas is expecting the S&P to close out next year at 4,200, a view also shared by Wells Fargo's Chris Harvey. Goldman Sachs' David Kostin, Citi's Scott Chronert and BofA's Savita Subramanian all predict a mostly sideways year with a target of 4,000.
No Santa yet: The stock market would need a major rally on this Friday for a Santa Claus rally to appear. The S&P is currently down 1.45% for the week leading into Dec. 25 and the three-day Christmas weekend. But opinion is divided on when exactly a Santa Rally appears.
For those in the camp that it is the week leading up to Jan. 2, there is a chance bulls could prompt some outsize gains in next week's holiday-shortened, low-volume trading. (3 comments)
Tesla (TSLA) CEO Elon Musk said he will not sell any more Tesla stock for about two years. While speaking in a Twitter Spaces audio chat, Musk also said he expects the economy to be in "serious recession" in 2023, reducing demand.
His comments came after a Tesla stock selloff deepened on Thursday over worries about softening demand for electric cars and Musk's distraction with Twitter and his stock sales. Shares have been down for five sessions in a row.
"I won't sell stock until I don't know probably two years from now. Definitely not next year under any circumstances and probably not the year thereafter," Musk said, responding to a question from TSLA investor Ross Gerber, who clashed in tweets with Musk earlier this week. (25 comments)
FTX co-founder and former CEO, Sam Bankman-Fried posted a bond of $250M and will be allowed to live in his parent's house in California while waiting for his trial on charges of fraud. Assistant U.S. Attorney Nicolas Roos had proposed the bail terms and alleged that Bankman-Fried "perpetrated a fraud of epic proportions."
Magistrate Judge Gabriel W. Gorenstein, who agreed to the bond and the house arrest proposal, said Bankman-Fried will be required to get an electronic monitoring bracelet. Bankman-Fried was arrested in the Bahamas 10 days ago, after the U.S. filed criminal charges against him. On Wednesday, he waived his right to fight extradition to the U.S. and flew back to the U.S. accompanied by FBI agents and the U.S. Marshals Service. (49 comments)
Shares of AMC (AMC) slumped, but came well off session lows, while preferred units (APE) surged after the proposal from the cinema chain to swap all preferred stock for common shares, which would then undergo a reverse split.
The company also said it intended to have a special shareholder meeting to vote on proposals from its board of directors to convert APE units into common stock and reverse split its stock at a 1-10 ratio.
AMC also said it was raising $110M in equity, selling APE shares to Antara Capital at a weighted average price of $0.66 per share. In addition, AMC said it cut its debt load by $100M, reducing its 2nd lien notes due in 2026 that were held by Antara in exchange for the 91M APE units. (101 comments)
Today's Markets
In Asia, Japan -1.03%. Hong Kong -0.44%. China -0.24%. India -1.61%.
In Europe, at midday, London +0.32%. Paris +0.44%. Frankfurt +0.17%.
Futures at 6:30, Dow +0.17%. S&P +0.05%. Nasdaq -0.09%. Crude +2.25% to $79.23. Gold +0.60% to $1806.10. Bitcoin +0.18% to $16,856.2.
Ten-year Treasury Yield +3 bps to 3.70%.
Today's Economic Calendar
8:30 Durable Goods
8:30 Personal Income and Outlays
10:00 New Home Sales
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
Companies reporting earnings today »
What else is happening...
Chinese EV battery-swapping tech developer U Power (UCAR) files for $25M IPO.
YouTube scores with new deal for NFL Sunday Ticket.
Microsoft (MSFT) responds to FTC lawsuit to block $69B Activision (ATVI) deal.
FTX (FTT-USD) creditors pick Paul Hastings for bankruptcy proceedings.
Scott Minerd, Guggenheim’s managing partner, has passed away.
Medical Properties (MPW) stock jumps after its largest tenant extends line of credit.
U.S. home sales plunge 35% in November as high mortgage rates bite: Redfin.
Senate passes $1.7T spending bill, clearing way for House vote.
Vanguard bolsters ETF lineup with a new Short-Term Tax-Exempt Bond.