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☆ Bank earnings become a post-Covid parlor game
▼ + stars: | 2023-01-23 | by ( John Foley | ) www.reuters.com time to read: +6 min

Chief among the mysteries is how much interest banks will harvest in 2023 and beyond. Even then, the link between benchmark interest rates and the rate banks actually charge is getting harder to forecast. Bank of America boss Brian Moynihan said that depositors who used to have roughly $3,500 with the bank now have almost four times more. Goldman just laid off 6% of its workforce, but it remains bigger than it was in 2019; Bank of America says it’s still hiring. To that end, the fog is arguably less troublesome for Goldman and Morgan Stanley than it is for JPMorgan, Bank of America and Citigroup (C.N).

☆ Goldman says non-U.S. stocks will beat the S&P 500 this year — and gives several ways to play it
▼ + stars: | 2023-01-23 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

"We expect non-US equities to outperform the S & P 500 in 2023, and many clients agree." One way to play the trend is through companies with foreign revenue exposure, according to Goldman. The Wall Street firm said its China Sales Exposure basket, which contains Russell 1000 companies with the highest sales exposure to China, has outpaced the S & P 500 by 5 percentage points as the dollar declined. Investors should also look at S & P 500 stocks with high international sales exposure, Goldman said. Netflix is one of the stocks with high international revenue exposure.

☆ Get ready for a deluge of data next week that will shape the Fed's next moves
▼ + stars: | 2023-01-21 | by ( Zev Fima | ) www.cnbc.com time to read: +8 min

Within the portfolio, we'll get the latest earnings from Danaher (DHR), Halliburton (HAL), and Johnson & Johnson (JNJ) on Tuesday before the opening bell. While the results will be important as always, we are most interested in the earnings call with analysts and investors. Housing Starts fell 1.4% in December to a seasonally adjusted annual rate of 1.38 million, slightly above the 1.36 million expected. Building permits dropped 1.6% in December to a seasonally adjusted annual rate of 1.33 million, below expectations of 1.37 million. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade.

☆ Earnings could keep the market on edge in week ahead as investors wait for Fed
▼ + stars: | 2023-01-20 | by ( Patti Domm | In | ) www.cnbc.com time to read: +8 min

I do think that will happen even more in the week ahead as the Fed is in a blackout period. S & P Global PMI data is released for both services and manufacturing Tuesday. "The market continues to think the Fed does not have to administer as much medicine as the Fed tells us they plan to. Earnings, earnings, earnings Stocks were lower in the past week, with the S & P 500 off by 1.8%. "It's a mild earnings recession, but it's an earnings recession.

☆ Breakingviews: Layoffs take Big Tech back to more modest future
▼ + stars: | 2023-01-20 | by ( Robert Cyran | ) www.reuters.com time to read: +3 min

NEW YORK, Jan 20 (Reuters Breakingviews) - Alphabet’s (GOOGL.O) plan to cut 12,000 jobs adds to the sense that U.S. technology firms are preparing for a more modest future. Tech firms based in the United States announced over 97,000 job cuts in 2022 according to consulting firm Challenger, Gray and Christmas, the most since the dot-com crash. Moreover, new job postings fell sharply at the end of 2022, according to trade group CompTIA. If all tech firms did the same, that would leave employment at 4.2 million, or about 5% larger than it was at the end of 2019. loadingCONTEXT NEWSAlphabet plans to eliminate about 12,000 jobs, according to a memo seen by Reuters on Jan. 20.

☆ Disney investors pay twice for half-leadership
▼ + stars: | 2023-01-18 | by ( Jennifer Saba | ) www.reuters.com time to read: +3 min

NEW YORK, Jan 18 (Reuters Breakingviews) - Walt Disney’s (DIS.N) poor succession planning is costing its shareholders twice over. That takes Disney to $60 million in total pay for the duo. Warner Bros Discovery (WBD.O), a fraction of Disney’s size, awarded its boss David Zaslav a $247 million compensation package in 2021. For the 2023 fiscal year, his target compensation package in 2023 is approximately $28 million. Disney urged shareholders to vote for its slate of directors at the company’s upcoming annual meeting.

☆ Breakingviews: Disney investors pay twice for half-leadership
▼ + stars: | 2023-01-18 | by ( Jennifer Saba | ) www.reuters.com time to read: +3 min

NEW YORK, Jan 18 (Reuters Breakingviews) - Walt Disney’s (DIS.N) poor succession planning is costing its shareholders twice over. That takes Disney to $60 million in total pay for the duo. Warner Bros Discovery (WBD.O), a fraction of Disney’s size, awarded its boss David Zaslav a $247 million compensation package in 2021. For the 2023 fiscal year, his target compensation package in 2023 is approximately $28 million. Activist investor Nelson Peltz, through his company Trian Fund Management, has challenged Disney by seeking a seat on the board.

☆ Activist investing cries out for some pushback
▼ + stars: | 2023-01-18 | by ( ) www.reuters.com time to read: +2 min

The number of aggressive investing campaigns led by firms such as Paul Singer’s Elliott Management and Nelson Peltz’s Trian Fund Management swelled last year, including from a record arrival of rookie practitioners. It represents a 36% increase from 2021 and the busiest year since 2018, when there were 249. There were also 55 first-time activists last year, who initiated more than a third of the campaigns. If the result is no better than a coin flip, it gives shareholders and boards fresh reason to question an activist’s arrival. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ A leaked Google memo compared it to slime mold
▼ + stars: | 2023-01-17 | by ( Jake Swearingen | ) www.businessinsider.com time to read: +5 min

It's like the start of a joke: What do Google and slime mold have in common? A lot, says a memo from an ex-Googler comparing the org to a "slime mold." (A key difference: Stanford grads aren't desperate to intern at a slime mold.) But with ChatGPT setting off alarm bells inside and outside the org, Google should probably move faster and with more intention than slime mold. The most memorable part of the memo compares Google's bottom-up organizational structure to a "slime mold," highlighting how both Google and a slime mold can work independently but still come together to solve complex problems.

☆ Goldman slams into unwelcome sort of volatility
▼ + stars: | 2023-01-17 | by ( John Foley | ) www.reuters.com time to read: +4 min

NEW YORK, Jan 17 (Reuters Breakingviews) - The similarities between Goldman Sachs (GS.N) and Morgan Stanley (MS.N) are drawing attention to what makes them different. Investment banking fees halved year-on-year for each, though Goldman generated roughly 50% more from deal advice and underwriting stocks and bonds than its archrival. During the decade before he took over, Goldman traded at a premium to Morgan Stanley. Separately, rival Morgan Stanley reported earnings per share of $1.26 for the same three-month period, 37% less than for the same span in 2021, and slightly higher than analysts’ forecasts, according to Refinitiv. Goldman reported a $2 billion full-year loss for its new “platform solutions” division, which includes the credit card it offers alongside iPhone maker Apple.

[1/5] A Chinese police officer stands guard at in the mainland port area of West Kowloon High-Speed Train Station Terminus on the first day of the resumption of rail service to mainland China, during the coronavirus disease (COVID-19) pandemic in Hong Kong, China, January 15, 2023. REUTERS/Tyrone SiuHONG KONG/BEIJING, Jan 15 (Reuters) - China resumed on Sunday high-speed rail services between Hong Kong and the mainland for the first time since the beginning of the COVID-19 pandemic, as it dismantles travel curbs after Beijing scrapped quarantine for arrivals a week earlier. Operations at West Kowloon station have been smooth, with a flow of about 1,400 passengers by 10 a.m., said Cheung Chi-keung, head of operator MTR Corp’s (0066.HK) cross-boundary operations. Hong Kong's transport secretary, Lam Sai-hung, said he could not confirm when long-haul journeys would resume, but that would be after talks with mainland authorities. Reporting by Joyce Zhou and Donny Kwok in Hong Kong and Martin Quin Pollard and Shuyan Wang in Beijing; Editing by Clarence FernandezOur Standards: The Thomson Reuters Trust Principles.

☆ Banks dress up for a business-casual recession
▼ + stars: | 2023-01-13 | by ( John Foley | ) www.reuters.com time to read: +4 min

NEW YORK, Jan 13 (Reuters Breakingviews) - A recession is coming for U.S. banks, but it’s wearing comfortable shoes. Bank of America is writing off 1.7% of its card loans, on an annualized basis, compared with an average of 2.7% since 2013. America’s collective credit card limit is growing at a 9% annual clip, according to the New York Federal Reserve, the fastest since 2008. Citi has put aside enough to cover 7.6% of its credit card loans going up in smoke - more than triple the current level. It said 1.7% of credit card loans had been written off, on an annualized basis, compared with a 2.7% average rate since 2013.

☆ BlackRock edges closer to its Blackstone roots
▼ + stars: | 2023-01-13 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, Jan 13 (Reuters Breakingviews) - BlackRock (BLK.N) is taking a page from the Blackstone (BX.N) family album. So-called illiquid alternatives were the only one of 13 BlackRock buckets to get fuller. Despite accounting for only about 1% of assets, fees from the unit represented 7.1% of revenue, up from 4.5% in the fourth quarter of 2021. Rising income from beyond traditional stock and bond offerings, and particularly the harder-to-sell variety, may yet turn out to be more of a game-changer for BlackRock. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

The wealth gap remains a harsh reality for women of color, which makes it harder to build wealth. "Decide on what you're going to save and invest on a monthly basis," she says. You might not have been exposed to building wealth, the tenets of investing and paying taxes, and basic financial planning. Don't worry about getting it perfectFor first-generation women of color, it starts with learning more and doing more. You're going to make mistakes and you're going to trip along the way.

☆ China consumer inflation accelerates in Dec; PPI falls with soft demand
▼ + stars: | 2023-01-12 | by ( ) www.reuters.com time to read: +2 min

REUTERS/Lam YikBEIJING, Jan 12 (Reuters) - China's annual consumer inflation rate accelerated in December, driven by rising food prices even as domestic demand wavered amid restrained economic activity during the month. The consumer price index (CPI) was 1.8% higher than a year earlier, rising faster than the 1.6% annual gain seen in November, data from the National Bureau of Statistics (NBS) showed on Thursday. The producer price index (PPI) showed an annual drop for a third straight month. In December it was down 0.7% from a year earlier, falling less than an annual contraction of 1.3% seen in November. read moreReporting by Liangping Gao, Joe Cash and Liz Lee; Editing by Bradley PerrettOur Standards: The Thomson Reuters Trust Principles.

☆ Inflation drop gives Fed leeway to save jobs
▼ + stars: | 2023-01-12 | by ( ) www.reuters.com time to read: +2 min

WASHINGTON, Jan 12 (Reuters Breakingviews) - Americans’ jobs may just have a chance to survive the Federal Reserve’s fight against inflation. The Fed has two main, specific, tasks: keeping inflation around 2% and ensuring all those who want to have jobs do. The central bank has more recently prioritized the former goal at the expense of the latter, with Fed Chair Jerome Powell arguing that permanently higher inflation would be more harmful to Americans than temporarily higher unemployment. Inflation data released Thursday suggests Fed might not have to choose between the two. The inflation battle isn’t over yet, but it’s looking increasingly likely the Fed won’t have to sacrifice jobs to win it.

☆ Southwest and Twitter are on a similar flight path
▼ + stars: | 2023-01-11 | by ( Robert Cyran | ) www.reuters.com time to read: +3 min

NEW YORK, Jan 11 (Reuters Breakingviews) - Twitter has slashed about three-quarters of employees since Elon Musk completed his buyout. But it’s also possible Twitter is building up what software developers call “technical debt” – where today’s underinvestment becomes tomorrow’s liability. The holiday meltdown at Southwest Airlines (LUV.N) is an example of how technical debt can build up even in non-technology companies. Twitter doesn’t have airplanes to keep aloft, but it too could be building up a kind of technical debt. The company had about $6 billion of operating costs in the four quarters before it went private, compared with $5 billion of revenue, which suggest there was fat to cut.

NEW YORK, Jan 10 (Reuters Breakingviews) - Microsoft (MSFT.O) is mulling a heads-I-win, tails-I-also win, AI deal. A mooted $10 billion investment, reported by Semafor, in the maker of the popular ChatGPT, could reshape Microsoft’s software business. And the investment is a pittance compared to Microsoft’s market capitalization of $1.7 trillion and $107 billion of cash on hand. Even then, Microsoft’s investment may not be wasted. The proposed investment means OpenAI can grow its business faster, which also benefits Azure, a part of Microsoft that investors value highly.

☆ McDonald’s ex-CEO fine: not a nothing burger
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, Jan 10 (Reuters Breakingviews) - McDonald’s (MCD.N) ex-boss is in the frying pan. The $196 billion Big Mac purveyor sued and successfully clawed back Easterbrook’s bounty of over $100 million in compensation. The SEC’s order also dings McDonald’s for not better clarifying why he was dismissed without cause. The slap against McDonald’s suggests the company also was not being forthcoming. Still, Easterbrook’s $400,000 fine adds to his pain, and he is also barred from serving as a public officer or director for five years.

☆ Mainland Chinese citizens are eager to travel — for the West's mRNA Covid vaccines
▼ + stars: | 2023-01-10 | by ( Lee Ying Shan | ) www.cnbc.com time to read: +4 min

Passengers prepare to enter Shenzhen through the Lok Ma Chau Spur Line Control Point on the first day of the resumption of normal travel between Hong Kong and mainland China on Jan. 8, 2023 in Hong Kong. Analysts expect that the list of destinations for vaccine tourism will grow. 'Natural first destination': Hong Kong"I believe that the natural first destination of the Chinese vaccine tourism is Hong Kong. "It's been long since I went to Hong Kong. But Hong Kong won't provide free Covid vaccinations to short-term travelers.

☆ Wells Fargo labors under $100 bln sin discount
▼ + stars: | 2023-01-10 | by ( John Foley | ) www.reuters.com time to read: +6 min

Wells Fargo shows what happens when misbehavior becomes a feature rather than a bug. TRAGIC NUMBERSerial mischief has cost Wells Fargo investors in three ways. Second, there are the expenses Wells Fargo has incurred from its internal deep clean. A little more than seven years ago, Wells Fargo, Bank of America (BAC.N) and JPMorgan (JPM.N) were roughly the same size in terms of market cap. At $161 billion, Wells Fargo now sits $110 billion short of Bank of America and a whopping $243 billion below JPMorgan.

☆ Brazil protests expose lack of U.S. risk premium
▼ + stars: | 2023-01-09 | by ( Robert Cyran | ) www.reuters.com time to read: +3 min

Like the United States, Brazil was until recently led by an autocratic president who refused to concede electoral defeat. It’s perhaps no surprise that Transparency International’s Corruption Perception Index scores Brazil at 38, below the global average, where 100 reflects a society nearly free of malfeasance. The United States scores substantially better at 67, but still below other developed nations. But if investors ever decide to demand a risk premium, it has a long way to fall. The Brazilian real weakened roughly 1% against the U.S. dollar in spot trading, while the benchmark Bovespa stock index fell 0.5%.

☆ Investors should buy these 33 stocks for the best shot at outperformance in 2023 — according to a Deutsche Bank group that's seen its stock picks double in value in five years
▼ + stars: | 2023-01-08 | by ( Marley Jay | ) www.businessinsider.com time to read: +2 min

Deutsche Bank updated its list of favorite stock picks to include its 33 best ideas for 2023. The firm says its portfolio of top ideas has doubled in value in a little more than five years. Today, its best ideas include significant bets on industrials and consumer-focused companies. Deutsche Bank isn't expecting a repeat of that dynamic — at least, not to the same degree. This week the firm updated its quarterly list of its highest-conviction stock ideas, and there are no oil and gas companies represented among its analysts' 33 favorites picks.

☆ Southwest will soar again into open U.S. skies
▼ + stars: | 2023-01-06 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, Jan 6 (Reuters Breakingviews) - The costs of Southwest Airlines’ (LUV.N) Christmas debacle landed on Friday. The company expects that some 17,000 flight cancellations will eat away between $725 million and $825 million of fourth-quarter pre-tax profit, creating a net loss in the period. Despite experiencing major disruptions before, $20 billion Southwest always manages to resume cruising altitude. Southwest, United Airlines (UAL.O), Delta Air Lines (DAL.N) and American Airlines (AAL.O) account for about two-thirds of the market. The Southwest enterprise now trades below 4 times expected 2023 EBITDA, a discount to peers.

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