- Global Hunt for Water Profit Risks Draining Cities Dry
- Ethiopia to Suspend Debt Service, Plans to Restructure Eurobond
- Japan’s Economy Shrinks for First Time in Three Quarters
- Biden, Xi Eye Economic and Military Thaw in High-Stakes Meeting
- U.K. Inflation Slows to 4.6 Percent, Lowest in Two Years
- An Optimistic Inflation Report Reduces Pressure on the Fed to Raise Rates
- The Elusive Soft Landing Is Coming Into View
- The Inflation Rally Goes Global
- House Approves Spending Plan, Easing Risk of Government Shutdown
- Carson Block, Nate Anderson Become SEC Tipsters for Cash Payouts
- Ken Griffin Sees Miami Possibly Replacing NYC as Finance Capital
- Wall Street Is Tapping Women, Minority-Owned Banks For Billion-Dollar Bond Deals
- Schonfeld Ends Millennium Partnership Talks, Secures Billions Elsewhere
- What to Watch in the Retail Report: Is Spending Cooling as Holidays Arrive?
- At REI, a Progressive Company Warns That Unionization Is Bad for Vibes
- So Thieves Nabbed Your Catalytic Converter. Here’s Where It Ended Up
- Goodyear to Explore Strategic Alternatives for Chemical Business, Dunlop Brand
- Target Sales Slump as Shoppers Pull Back
- How David Zaslav Blew Up Hollywood
- Aristocrat Leisure Raises Dividend After FY Profit Jumps 53%
- Young and Rich: China’s Scions Set to Inherit $120 Billion in Wealth Transfer
- China Mulls $137 Billion of New Funds to Aid Housing Market
- The Rise and Fall of the World’s Most Successful Joint Venture
- Why Xi Can No Longer Brag About the Chinese Economy
- Elon Musk and Jane Fraser Among CEOs Wooing Xi Jinping
- US Inflation Report to Keep Fed Leaning Toward More Rate Hikes
- US Bank Regulators to be Grilled by Congress on Capital Hike Plan
- UBS Predicts Tricky Start to 2024 for Emerging Market Assets
- UBS Climate Change’s $150 Billion Hit to the U.S. Economy
- How Wall Street Makes Millions Selling Car Loans Customers Can’t Repay
- Bankers Brace for Smaller Bonuses With No Relief Seen Next Year
- CEOs Aren’t Hearing A Lot of ‘Great Quarter, Guys’ This Earnings Season
- With Interest Rates Above 9%, Small Businesses Slam the Brakes
- Rolex, Patek Prices Hit Fresh Two-Year Lows: Subdial Index
- Facing Financial Ruin as Costs Soar for Elder Care
- How Microsoft’s Legal Legacy Shapes the Antitrust Case Against Google
- What Google Argued to Defend Itself in Landmark Antitrust Trial
- Glencore Wins Teck Coal Business, Paving Way for Its Own Split
- Fisker Shares Fall More Than 10% After EV Startup Cuts Production Target
- Home Depot Sales, Earnings Fall but Top Analyst Estimates
- Insider Co-Founder Henry Blodget Steps Down as CEO Amid Strategy Shift
- Can Tequila Really Go Global? This Booze Boss Is Giving It a Shot
Open Interest Changes
Investors are bringing out their champagne glasses to celebrate the latest CPI report, which was "clearly a shock to the consensus" as the rate of inflation fell more than expected in October. Stocks soared and Treasury yields tumbled after headline inflation flatlined month-on-month, an impressive feat that has so far excluded the start of a recession. Core inflation numbers were also striking, with the figure climbing by a lower-than-expected 4% Y/Y to mark the lowest reading since September 2021.
SA commentary: "I have been preaching for the past year that the rate of inflation would fall as fast as it rose, and this report supports that assertion," Investing Group Leader Lawrence Fuller, author of The Portfolio Architect, wrote to the applause of many subscribers. "Today's report ends the discussion of rate hikes and should also end the discussion about rates staying higher for longer... It looks like the little guy was one step ahead of Wall Street this time around. The professional money management community has been extraordinarily bearish as of late, which means there is plenty of fuel left for our year-end rally."
That couldn't be seen any clearer than in the latest 13F filing from famed "Big Short" investor Michael Burry. While the quarterly filings don't signal exactly when he exited his Q2 stake, or outline precisely what hedge funds are up to, Burry's Scion Asset Management said it no longer held 2M puts on the SPDR S&P 500 ETF (SPY) and 2M puts on the Invesco QQQ Trust (QQQ), which totaled about $1.6B. The bearish bets follow many forecasts by Burry in recent years that predicted "the mother of all crashes," and rhetoric that referred to the current market environment as the "greatest speculative bubble of all time by two orders of magnitude," and "as I said about 2008, it is like watching a plane crash."
What to watch: The market's celebration saw the Nasdaq (COMP.IND) exit correction territory on Tuesday, with the "Magnificent Seven" adding more than $200B to their market caps. But it wasn't just the elite group of tech stocks. Small-caps, which have lagged their large-cap peers in 2023, also played some major catch-up over the session, with the Russell 2000 (IWM) closing up 5.4% and lifting the index into positive territory for the year. Following the enthusiasm, Lawrence Fuller had one more insight to add when sizing up Fedspeak ahead of the last FOMC meeting of the year. "Powell has to keep the hawkish bent for fear that what is happening today continues... a melt up in stocks and collapse in market rates - that can be inflationary." (2 comments)
Kicking the can?
U.S. House lawmakers have passed a temporary spending bill, in a win for the newly-elected Speaker Mike Johnson. The bill will now go to the Senate for a vote, where it is widely expected to pass. Senate Majority Leader Chuck Schumer lauded the measure "that excludes hard-right partisan cuts and poison pills with a strong bipartisan vote," while hardline Republican Representative Mike Garcia said it wasn't ideal, "but a shutdown is a far worse world to be in." The two-part stopgap bill would fund some government operations through Jan. 19 and the rest through Feb. 2, meaning there could be another shutdown deadline on Groundhog Day. (8 comments)
Back to business
All eyes are on California, where President Biden and his Chinese counterpart Xi Jinping will meet on the sidelines of the APEC summit today to help cool escalating tensions between the countries. "It would be naive to expect this meeting to result in breakthrough developments, but I am optimistic this meeting will steer the two countries in the right direction to manage geopolitical risks better," said Investing Group Leader Dilantha De Silva. Catering to multinationals that might boost the Chinese economy, Xi will also meet with a group of high-profile CEOs to shore up investor confidence. Meetings are expected with Tesla's (TSLA) Elon Musk, Microsoft's (MSFT) Satya Nadella, Exxon Mobil's (XOM) Darren Woods, and Citigroup's (C) Jane Fraser, among other executives. (1 comment)
Wall Street South
Noting that Florida has an environment that encourages growth, Ken Griffin, founder of hedge fund Citadel, believes Miami could eventually replace New York as the world's financial center. Major Wall Street firms have been shifting to the Sun Belt in recent years on account of lower taxes, cheaper real estate and labor, and warmer weather compared to New York. Citadel already moved its global headquarters to Miami from Chicago in 2022, close on the heels of hedge funds owned by Carl Icahn and Paul Singer relocating to Florida from New York. The exodus of big money can also have other big implications, like the billions in tax revenues paid to states. (2 comments)
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In Asia, Japan +2.5%. Hong Kong +3.9%. China +0.6%. India +1.1%.
In Europe, at midday, London +1.1%. Paris +0.7%. Frankfurt +0.8%.
Futures at 7:00, Dow +0.3%. S&P +0.4%. Nasdaq +0.6%. Crude -0.6% to $77.82. Gold +0.5% to $1,976.90. Bitcoin -0.2% to $36,232.
Ten-year Treasury Yield +2 bps to 4.46%.
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 Producer Price Index
8:30 Retail Sales
8:30 Empire State Mfg Survey
9:30 Fed's Barr: "Oversight of Prudential Regulators"
10:00 Business Inventories
10:00 Atlanta Fed's Business Inflation Expectations
10:30 EIA Petroleum Inventories
3:30 PM Fed's Barkin: "The Housing Challenge"
Companies reporting earnings today »
What else is happening...
Home Depot (HD) beats even as customers opt for smaller projects.
YouTube will require creators to disclose AI-generated videos.
Amazon (AMZN) to run in-app shopping ads on Snapchat (SNAP).
Warren Buffett's Berkshire (BRK.B) exits GM (GM), Activision bets.
Ray Dalio's Bridgewater boosts stake in 3M, exits Apple (AAPL).
Bill Ackman's Pershing Square ups stake in Alphabet (GOOG).
The best-selling sedan in America has gone all-hybrid.
Boeing (BA) trails Airbus (OTCPK:EADSF) in October jet deliveries.
Pfizer’s (PFE) Paxlovid linked to far higher rate of COVID rebound.
Adobe (ADBE) may face EU antitrust warning on $20B Figma deal.