Stocks pushed higher Friday, with the S&P 500 and Dow Jones indexes recording their highest levels in more than a year, after Federal Reserve Chair Jerome Powell supported the market consensus view that key interest rates have peaked. Powell said “tight monetary policy” was slowing economic activity, which traders chose to elucidate as a signal that the Fed likely is done with rate hikes, even if the central bank hasn’t actually said so. The strong rally in stocks since early November has been attributed to easing inflation, declining long-term U.S. Treasury yields and expectations for rate cuts next year. The benchmark 10-year Treasury yield, which hit 5% in October, fell 24 basis points this week to end at 4.225%, its lowest yield since early September. The three major stock market indexes ended the week higher for the fifth straight week, with the Dow rallying 2.4%, the S&P rising 0.7% and the Nasdaq Composite climbing 0.4%. Read Seeking Alpha’s Catalyst Watch for a preview of next week’s major stock market events.
Fast-fashion giant Shein confidentially filed for a U.S. IPO, targeting a valuation of $80B-$90B, which would make it the biggest U.S. listing by a Chinese-founded company. Shein has steadily grown to become the world’s largest fashion retailer, thanks to its “real-time retail” business model, under which suppliers have three days to produce new designs or risk being cut off. However, Shein has come under fire for alleged worker exploitation, which could bar its IPO if found to be true. “For the time being, investors should continue to collect information about this promising – but potentially complicated – listing,” cautioned SA analyst Luckbox Magazine. Meanwhile, the market is abuzz with reports of other potential IPOs, including casual dining group Panera Bread, Kim Kardashian’s shapewear brand Skims and social media firm Reddit.
Montana was set to become the first state in the nation to ban TikTok, which is owned by the Chinese tech giant ByteDance (BDNCE), but it looks appreciate the proceed is running into familiar roadblocks. Federal evaluate Donald Molloy blocked the Montana bill set to go into effect on Jan. 1, 2024, saying the measure “violates the Constitution in more ways than one” and “oversteps state power.” While individual users would not have been punished, the law could have imposed fines of $10,000 on any “entity” – namely the app stores of Apple (AAPL) and Google (GOOG, GOOGL), or TikTok itself – each time someone was “offered the ability” to access or download the TikTok app. See what SA analysts had to say about how restrictions could impact TikTok’s rivals. (16 comments)
Traders did not seem so impressed with the Cybertruck launch event at Tesla’s (TSLA) Gigafactory in Austin. Shares fell 1.7% during the regular session on Thursday and dropped another 2.1% AH, with the electric pickup needing to verify itself before getting a final round of applause. Starting prices of the futuristic vehicle will start at $60,990, more than 50% higher than quoted when it was first unveiled in 2019. The base edition will also only be available in 2025, while many of the touted specs appreciate 0-60 in 2.6 seconds, 130 MPH top speed, and beastly torque and horsepower, will only be offered on its most high-end variant known as the “Cyberbeast.” Range also fell short of the originally promised 500 miles and would only achieve close to there via a range extender that takes up a third of the truck bed. (254 comments)
U.S. crude oil surrendered early gains and fell more than 2% Thursday, even after OPEC+ announced some member nations agreed to voluntary cuts approaching 2M bbl/day starting in January. Market participants were disappointed by the smaller-than-expected numbers and lack of details on quota enforcement. At least 1.3M bbl/day of the cuts were also an extension of the voluntary reductions that Saudi Arabia and Russia already had in place, sparking skepticism over whether they will actually be delivered. Meanwhile, Angola already rejected its new output target, saying it will continue pumping as usual, while the biggest news may have been the addition of Brazil. (61 comments)
Charlie Munger, Warren Buffett’s right-hand man, peacefully died this week at a hospital in California at the age of 99. “Berkshire Hathaway (BRK.A) (BRK.B) could not have been built to its present status without Charlie’s inspiration, wisdom and participation,” Buffett said in a statement. Munger was vice chairman of Berkshire and one of its biggest shareholders, with an estimated net worth of about $2.5B. Together with Buffett, the pair transformed Berkshire from a textile manufacturer into a giant conglomerate in a partnership that lasted nearly six decades. Read Investing Group Leader Samuel Smith’s breakdown of Munger’s recent investment advice, as well as the best quotes from the legend himself. (342 comments)
