READS
- Canal Traffic Is Being Throttled by Climate Change Impact
- Maersk Slumps After Forecasting Weak Global Trade Until 2026
- China Foreign Investment Gauge Turns Negative For First Time
- In the Long Run, Investing Is All About the Economy*
- US Money Market Funds Draw Biggest Weekly Inflow in Seven Months
- Ruin: Money, Ego & Deception at FTX
- Sam Bankman-Fried Convicted of Fraud in Stunning FTX Crash
- Cathie Wood Says Bitcoin Is ‘Digital Gold’ as Deflation Hedge
- Buffett’s Berkshire Poised for Boost as Rates Burnish Cash Pile
- Macquarie’s First-Half Profit Falls, to Launch Up to A $2 Billion Buyback
- US October Jobs Report to Mark End of Blowout Payroll Gains
- UAW’s Fain Sees ‘Ugly’ Labor Strife Ahead at Ford Battery Plants
- How ‘Salts’ Get Into Labor Movements
- Apple’s Disappointing Outlook Spotlights Growing China Woes
- Walgreens Is Cancelling Corporate Bonuses as Big Pharmacies Face Increasing Difficulties
- Junk Food’s $30 Billion Opening Is India’s Next Health Crisis
- Restaurant Brands Revenue Disappoints Wall Street as Burger King Same-Store Sales Miss Estimates
- Shoppers Keep Splurging on Little Luxuries Like Starbucks, Fried Chicken
- Americans Are Walking 36% Less Since Covid
- Fall Auctions Woo Rich Bargain Hunters With $2.5 Billion in Art
- N.F.L., on Lookout for Growth, Finds Open Arms in Germany
- Why the Jet Stream Is Helping Some International Flights Arrive Early
- A Giant Leap for the Leap Second. Is Humankind Ready?
Open Interest Changes
PREMIUM
Prepper
South Korea is prohibiting stock short-selling until June 2024, in a move that triggered a big rally for equities and increased trading volumes. The benchmark KOSPI and the tech-heavy KOSDAQ soared 5.7% and 7.3%, respectively, resulting in both indexes closing out their best session since late March 2020. Short-selling is an investment strategy in which traders or hedge funds sell borrowed shares with the aim of buying them back later at a lower price. It's a risky and costly strategy that requires a margin account and collateral, with the potential for unlimited losses as the stock's price can rise indefinitely.
Snapshot: "The [South Korean] measure is aimed at fundamentally easing 'the tilted playing field' between institutional and retail investors," Financial Services Commission Chairman Kim Joo-hyun said at a news briefing. "Amid continued uncertainty in financial markets, major foreign investment banks have been engaged as a matter of practice in unfair trades... and we determined that it would be impossible to maintain fair trading discipline." The regulator added that it will also implement a zero-tolerance approach to illegal practices like naked short-selling, with a special investigation team to be established and "perpetrators facing criminal prosecution." Naked Short Selling: What It Is & How It Works
To note, South Korea had already banned short-selling during the coronavirus pandemic. The ban was lifted in May 2021 for trades of companies on the KOSPI and KOSDAQ with large market caps, but the restrictions have remained in place for more than 2,000 equities. It comes as a vocal group of retail investors has continued to complain about the impact of shorting, influencing public perception ahead of general elections for the National Assembly in April. However, according to exchange data, short-selling in South Korea only accounts for a fraction of the market, about 0.6% of the KOSPI and 1.6% of the KOSDAQ.
Over in the U.S.: The SEC has issued controversial bans on the short-selling of certain stocks before, covering hundreds of financial equities during the financial crisis of 2008, and it was again discussed during the banking crisis earlier this year. Many have cited that regulatory intervention was needed, at times, to protect companies and stabilize the market, which could have real-world effects like spooking depositors or prompting bank runs. Others have argued that the restrictions were not only unnecessary, but actually harmed market quality, stability and discovery. In turn, those could impact liquidity and pricing efficiency, while short-sellers may use other instruments like futures, options and swaps to get around any bans. SEC approves new rules on short sales and securities lending disclosures
Record cash
Investors were watching Warren Buffett's performance over the weekend as Berkshire Hathaway (BRK.B) (BRK.A) reported a 41% Y/Y jump in Q3 operating earnings. The results were driven by strong numbers in its insurance divisions, which were partially offset by profit declines in utilities, energy and railroad businesses. Berkshire's cash pile also grew to a record $157B, prompting some acquisition speculation. SA analyst Cavenagh Research was surprised by Buffett's decision to slow down stock buybacks, but said he "continues to favor investment in Treasuries over equities." About 78% of Berkshire's $318.6B of equity holdings, at fair value, were concentrated in American Express (AXP), Apple (AAPL), Bank of America (BAC), Coca-Cola (KO), and Chevron (CVX). (239 comments)
#Plantbased
Burger King, owned by Restaurant Brands International (QSR), will not expand its plant-based offerings in the U.S. in the near term. "It's not a big part of the current focus," said Restaurant Brands CEO Josh Kobza, but noted that demand for such options is stable. Kobza added that plant-based options are more popular internationally, particularly in western Europe. Producers of plant-based meat substitutes have been buckling under fading popularity and weak consumer demand. Beyond Meat (BYND) previously provided a grim outlook, while Archer-Daniels-Midland (ADM) warned of demand softness and destocking in the plant-based protein market persisting into 2024. (1 comment)
Epic battle
Fortnite maker Epic Games is now taking Alphabet's (GOOG, GOOGL) Google to court over antitrust claims related to the Play Store's payment system. Epic, which will open arguments in a jury trial today, is not seeking financial compensation, but is calling for changes to Google's practices. The gaming company claimed that Google has been illegally driving up fees and restricting rivals from distributing apps directly. "These claims are baseless," responded Wilson White, VP of government affairs & public policy at Google. Epic filed a similar case against Apple (AAPL) in 2021, but it lost on most counts and both companies have asked the Supreme Court to review the ruling. Google is already facing a landmark antitrust case from the Department of Justice, one that has made Barclays increasingly concerned. (2 comments)
Today's Markets
In Asia, Japan +2.4%. Hong Kong +1.7%. China +0.9%. India +0.9%.
In Europe, at midday, London flat. Paris -0.5%. Frankfurt -0.3%.
Futures at 7:00, Dow +0.1%. S&P +0.2%. Nasdaq +0.3%. Crude +1.6% to $81.80. Gold -0.3% to $1,994.20. Bitcoin +0.4% to $35,236.
Ten-year Treasury Yield +4 bps to 4.60%.
Today's Economic Calendar
12:30 PM Investor Movement Index
Companies reporting earnings today »
What else is happening...
Recap: S&P 500 (SP500) caps stunning reversal from correction territory.
Elon Musk unveils ChatGPT rival Grok with real-time access to X info.
Oil prices edge up after Saudi Arabia, Russia stick to production cuts.
Rising retail theft seen threatening brick-and-mortar model's viability.
More failures? Silicon Valley Bank (OTCPK:SIVBQ) was not a one-off.
EV stocks have lost their buzz - partnerships could be the new plan.
Ant Group gets Chinese government nod for release of AI products.
Biden admin proposes carbon storage projects in national forests.
Palo Alto (PANW) may shell out $600M-$700M for Israeli cyber startup