Month: December 2023

© Reuters.

Investing.com — Here is your Pro Recap of the biggest insider trades and institutional investor headlines you may have missed this week: Walt Disney turns down Trian request for Board representation, Elliott takes $1 billion stake in Phillips 66 and seeks board seats, and top brass buys at Arbor Realty Trust , Agilon Health, and 3D Systems.

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Walt Disney turns down Trian Fund Management request for Board representation

Trian Fund Management, led by activist investor Nelson Peltz, announced that their request for board representation at Walt Disney (NYSE:DIS) was rejected. Holding about $3 billion in Disney shares, Trian disclosed that despite discussions with Disney’s CEO and an invitation to meet with the board, their proposal for board seats, including one for Peltz, was declined.

This comes after reports stated that Peltz might nominate at least three directors for Disney’s board.

“Since we gave Disney the opportunity to prove it could ‘right the ship’ last February, up to our re-engagement weeks ago, shareholders lost ~$70 billion of value,” said Trian in its statement, noting low investor confidence and looming key strategic questions.

Trian’s latest statement follows the appointment of James P. Gorman, Morgan Stanley’s chairman and CEO, and veteran media executive Jeremy Darroch as new Disney directors. While acknowledging these appointments as positive, Trian believes they are insufficient to regain investor trust or address the fundamental problems under the current board’s oversight. Trian plans to take the case for change directly to shareholders.

Elliott takes $1B stake in Phillips 66, seeks board seats

Elliott Investment Management has taken a position worth $1B in Phillips 66 (NYSE:PSX) and is pushing to appoint two board members at the oil refining company.

In a letter on Wednesday, Elliott proposed strategies for Phillips 66 to address its performance issues, enhance execution, rebuild investor trust, and significantly increase shareholder value, estimating approximately 75% upside to the current stock price.

Elliott expressed support for the company’s 2025 goals but noted investors’ doubts about the company’s capability to achieve these targets. The letter highlighted the need for the Phillips 66 management team, led by Mr. Lashier, to make tangible progress towards these goals to maintain investor support. However, Elliott also recognized the market’s skepticism and urged the board to take steps “to reassure investors that Phillips 66 is in the best possible position to achieve its value-creation potential”.

Elliott’s call to action comes amid Phillips 66’s underperformance compared to industry peers like Marathon Petroleum (NYSE:MPC) and Valero Energy (NYSE:VLO) over the past three years.

In response, Phillips 66 stated its intention to maintain constructive talks with Elliott Investment Management. Phillips 66 retained two top financial and legal advisers for its duel with activist investor Elliott Investment Management, according to Reuters, which cited people familiar with the matter.

This news, along with Elliott’s proposals positively impacted investor sentiment. Phillips 66’s stock price experienced a significant increase in the last two days, closing the week with more than an 8% gain.

Insider buys

Arbor Realty Trust (NYSE:ABR) saw a couple of insider buys on Wednesday. Chairman, CEO and President Ivan Kaufman purchased 40,000 common shares, or worth around $480,000, at $11.86-$12.05. Meanwhile, CFO, Paul Elenio, bought 5,000 common shares, or worth around $60,000, at $11.90-$12.03

Shares gained more than 3% yesterday.

agilon health (NYSE:AGL) Director, Jeffrey Schwaneke, purchased 22,300 common shares, or worth over $250,000, at $11.22. Schwaneke owns a total of 31,931 shares following the latest purchase.

Shares are up nearly 2% pre-market today.

3D Systems (NYSE:DDD) Director, Thomas Erickson, bought 50,000 common shares, or worth $265,000, at $5.30. Erickson owns a total of 257,294 shares following the latest purchase.

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© Reuters. FILE PHOTO: Federal Reserve Chair Jerome Powell reacts to introductory remarks before speaking on “Monetary Policy Challenges in a Global Economy” during the international Monetary Fund’s (IMF) annual research conference on “Global Interdependence” in Was

By Howard Schneider

ATLANTA (Reuters) -The risks of the Federal Reserve slowing the economy more than necessary have become “more balanced” with those of not moving interest rates high enough to control inflation, Fed Chair Jerome Powell said on Friday, reaffirming the U.S. central bank’s intent to be cautious but also offering fresh optimism on its progress so far.

Noting that a key measure of inflation averaged 2.5% over the six months ending in October, near the Fed’s 2% target, Powell said it was clear that U.S. monetary policy was slowing the economy as expected with a benchmark overnight interest rate “well into restrictive territory.”

“We are getting what we wanted to get” out of the economy, Powell said during an event at Spelman College in Atlanta, noting that the “full effects” of the Fed’s 5.25 percentage points of rate hikes to date have likely not yet been felt.

“Having come so far so quickly, the (Federal Open Market Committee) is moving forward carefully, as the risks of under- and over-tightening are becoming more balanced,” he said, referring to the central bank’s policy-setting committee.

As the Fed goes forward, “the data will tell us if we need to do more” rate hikes, Powell said as he fielded questions from Spelman College President Helene Gayle after his opening remarks at the historically black college.

Powell reiterated, as his colleagues have in recent weeks, that it was still too early to declare the Fed’s inflation fight finished, with prices rising 3.0% annually by the measure the central bank uses to set its target. Prices as of October were up 3.5% when stripped of food and energy costs, a measure the Fed sees as a better guide of inflation’s trend.

“We are prepared to tighten policy further if it becomes appropriate to do so,” he said.

But his remarks also reflected increased confidence that the current 5.25%-5.50% policy rate may well be adequate to complete the job. The Fed meets on Dec. 12-13 and is expected to leave its benchmark rate unchanged for the third meeting in a row.

“(Powell) used the word ‘balanced,’ and the message he’s sending is the Fed is not going to change its rhetoric, but things are going the way they want them to go and they’re not going to raise rates again,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “They’re done, they’re finished, and that’s what the market thinks.”

U.S. stocks reversed earlier losses and were trading higher after Powell’s remarks, and the 2-year Treasury yield dropped to its lowest level since June 13. Traders of interest rate futures added to bets the Fed would leave rates steady at its December and January policy meetings, and then start cutting rates at its March meeting.

Powell and Fed Governor Lisa Cook, who earned her bachelor’s degree at Spelman College, were scheduled to participate in a roundtable discussion with local entrepreneurs later on Friday.

‘SOFT LANDING’

The Fed chief said policymakers still regard the uncertainty in the economic outlook to be “unusually elevated,” one factor in their insistence that rates may still need to rise.

But he also said that the broad outlines of the hoped-for “soft landing” seemed to be falling into place, with the job market still strong even as growth in spending and output slows and price pressures abate.

“My colleagues and I anticipate that growth in spending and output will slow over the next year, as the effects of the pandemic and the reopening fade and as restrictive monetary policy weighs on aggregate demand,” Powell said.

“The pace at which the economy is creating new jobs remains strong, and has been slowing toward a more sustainable level … Wage growth remains high, but has been gradually moving toward levels that would be more consistent with 2% price inflation over time, and real wages are growing again as inflation declines,” he said.

Shortly before Powell delivered his remarks, a key reading on the health of the U.S. manufacturing sector showed activity there remained subdued and factory employment declined. The Institute for Supply Management’s Purchasing Managers Index has now indicated the sector has been in contraction for 13 straight months, the longest such run in more than two decades, as demand for goods continues to soften.

© Reuters. Santa will continue to deliver – Stock Trader’s Almanac

November was a breathtaking month for stocks, with the S&P 500 surging 9% led by Information Technology. It was the fourth-best monthly gain on the S&P going back to 1950. Given the huge surge, there are worries that December’s usual gains will be taken away from. The Stock Trader’s Almanac ran the numbers and said this is usually not the case.

The Almanac looked at the top three Novembers (1962, 1980 and 2020) and found that December also saw gains in 2 out of the 3 cases, with 1980 being the lone down case.

Meanwhile, also going back to 1950, stocks were up the month of December 74% of the time.

“The top 10 and top 20 Novembers were followed by up December 70% of the time, though average gains are a little above average for the top ten at 1.8%,” the Almanac states. “So, all in all, big November gains take very little if anything away from historically strong Decembers. In short, gains beget gains.”

The Almanac also said it is hard to understand all the bearishness on the Street as it is seasonally the most bullish time of the year.

“And seasonality remains on track and firing on all pistons as does the 4-Year Cycle,” they added. “Market internals and technicals continue to be supportive. Those that may remember the 1990s will recall that the market can flourish, driven by innovation and technology – can you say AI? – even when interest rates are at current levels or even higher. The bond market continues to signal a declining trend in rates with the 10-year and 30-year bond yields retreating off the recent highs.”

© Reuters

(Updated – December 1, 2023 12:06 PM EST)

Investing.com — Main U.S. indexes climbed following a speech from Fed Chair Jerome Powell. Powell said the Fed needs to move carefully on interest rates with risks more balanced, striking a slightly dovish tone.

Here are some of the biggest U.S. stock movers today:​

Walt Disney (NYSE:DIS) stock erased a pre-open gain and declined 0.6%. The entertainment giant announced plans to reinstate its dividend with a 30-cent per share payout for the second half of its fiscal year, signaling a recovery phase after the pandemic-induced hiatus.

Tesla (NASDAQ:TSLA) stock fell 1% after the electric-vehicle maker started deliveries of its Cybertruck electric pickup on Thursday, with a starting price of $60,990, above its original forecast.

Alibaba (NYSE:BABA) ADRs fell 2% after Morgan Stanley downgraded the e-commerce giant to ‘equal weight’ from ‘overweight’, citing slower turnaround in customer management revenue.

Pfizer (NYSE:PFE) stock fell 4% after the drugs giant scrapped its plan to advance a twice-daily version of its oral weight-loss drug into late-stage studies.

Fisker (NYSE:FSR) stock rose 11% after the electric-vehicle maker said it will scale down production this month, and produce fewer cars this year than its previous guidance, to prioritize cash for working capital needs.

Marvell (NASDAQ:MRVL) stock fell 4.8% after the chipmaker’s fourth-quarter revenue forecast fell short of expectations, while also reporting declining third-quarter revenue.

Ulta Beauty (NASDAQ:ULTA) stock soared 12% after the cosmetics retailer raised the lower end of its annual net sales forecast and named Paula Oyibo its new chief financial officer.

UiPath (NYSE:PATH) stock jumped 26% after the automation software firm beat third-quarter revenue estimates, amid strength in the licenses and subscription-services businesses.

Salesforce (NYSE:CRM) stock climbed 3.4%, adding to yesterday’s gain after reporting better than expected earnings and raising guidance.

Dell Technologies (NYSE:DELL) stock declined 5% after it reported disappointing results for the third quarter. EPS topped consensus but a revenue shortfall spooked investors.

Additional reporting by Louis Juricic

© Reuters.

Investing.com — U.S. stocks traded in a muted fashion Friday, as investors took a breath after a stellar November, ahead of comments from Fed Chair Jerome Powell.

By 09:45 ET (14:45 GMT), the Dow Jones Industrial Average rose 20 points, or 0.1%, while the S&P 500 traded 4 points, or 0.1%, lower and the NASDAQ Composite dropped 40 points, or 0.3%.

The main Wall Street indices posted strong gains last month, largely on hopes that the Federal Reserve’s tightening cycle may be over. The S&P 500 and NASDAQ Composite registered their biggest monthly percentage increases since July 2022, while the Dow Jones Industrial Average soared to its best month since October 2022.

Powell set to speak

Further evidence of cooling U.S. inflation came in the form of the eagerly awaited personal consumption expenditures price index, which rose 3% in October from a year ago, according to data released on Thursday, falling from 3.4% the previous month.

This index is widely seen as the Federal Reserve’s preferred gauge of inflation, and although the reading was still above the Fed’s 2% target, the trajectory is clearly lower.

Investors will pay close attention to comments from Fed Chair Jerome Powell, who is slated to participate in two separate discussions on Friday, as they seek clues of the central bank’s rate outlook going into the new year.

Disney reinstates its dividend

In corporate news,Tesla (NASDAQ:TSLA) stock fell 2.6% after the electric-vehicle manufacturer revealed a starting price of nearly $61,000 for its highly-anticipated Cybertruck, more than had previously been expected.

Walt Disney (NYSE:DIS) stock fell 0.5% despite announcing the reinstatement of its dividend, as the entertainment giant turned down the request of Trian Fund Management, led by activist investor Nelson Peltz, for board representation.

The Wall Street Journal reported that Apple (NASDAQ:AAPL) and Paramount Global (NASDAQ:PARA) are reportedly in early discussions to bundle their streaming services at a discounted rate.

Oil gains after OPEC-induced losses

Oil prices edged higher Friday, bouncing after the previous session’s sharp losses as the voluntary oil output cuts agreed by OPEC+ producers fell short of expectations.

By 09:45 ET, the U.S. crude futures traded 0.3% higher at $76.18 a barrel, while the Brent contract climbed 0.2% to $80.98 a barrel. Both contracts lost over 6% each in November.

The Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, agreed to a voluntary output reduction of 900,000 barrels per day in addition to extending 1.3 million barrels per day in production cuts already in place. 

While the new cuts are still set to negate a crude oil surplus in the first quarter of 2024, supplies will be less tight than initially anticipated.

Additionally, gold futures rose slightky to $2,036.40/oz, while EUR/USD traded 0.3% lower at 1.0851.

(Oliver Gray contributed to this item.)

© Reuters

Investing.com — Traders look ahead to the start of the final month of trading in 2023 following a positive November for stocks on Wall Street. Elsewhere, Tesla (NASDAQ:TSLA) reveals a price tag for the cheapest model of its futuristic-looking Cybertruck that is well above boss Elon Musk’s initial estimates, and a private survey shows Chinese manufacturing activity unexpectedly expanded last month.

1. Futures dip early gains; Powell appearances ahead

U.S. stock futures slipped on Friday, reversing earlier gains, after equities on Wall Street finished off their best month since 2022 in the previous session (more below).

By 08:08 ET (13:08 GMT), the Dow futures contract was mostly unchanged, S&P 500 futures had dipped by 11 points or 0.2%, and Nasdaq 100 futures had fallen by 62 points or 0.4%.

In the last day of trading of November, the 30-stock Dow Jones Industrial Average jumped by 1.5% to its highest close since January of last year and the benchmark S&P 500 advanced by 0.4%, while the tech-heavy Nasdaq Composite dipped by 0.2%. Both the Dow and S&P are on track to post a winning week, although the Nasdaq is on pace to snap four consecutive positive weeks.

Investors were pouring through data on Thursday that showed the Federal Reserve’s preferred inflation gauge cooled in October. The figures helped to bolster bets that the U.S. central bank may have completed its long-standing campaign of interest rate hikes.

Heading into the start of a new month of trading, markets will be keeping an eye on statements from Fed Chair Jerome Powell, who is slated to participate in two separate discussions on Friday. 

2. U.S. stocks rally in November

Throughout November, hopes that the Fed’s tightening cycle could be over boosted U.S. equities and relieved some of the upward pressure on Treasury yields seen earlier in the year.

Keen to corral red-hot inflation back down to its 2% target, the Fed has elevated interest rates to more than two-decade highs, a move that has threatened to weigh on risk assets.

Investors subsequently welcomed the prospect of loosening financial conditions last month, with markets even pricing in a possible rate cut by the Fed as soon as May next year.

The S&P and Nasdaq registered their biggest monthly percentage increase since July 2022, while the Dow soared to its best month since October 2022.

Support for stocks came from U.S. Treasury yields, which saw their best month since 2011, Reuters reported. The benchmark 10-year note in particular fell by 52.2 basis points in November, recovering from a spike in October that pushed yields to a 16-year peak of 5.02%. Yields typically move inversely to prices.

3. Tesla unveils Cybertruck pricing as deliveries begin

Tesla has revealed a starting price of nearly $61,000 for its highly-anticipated Cybertruck, as the electric carmaker started deliveries of the science-fiction-inspired pickup.

The rear-wheel drive base model of the shiny stainless steel Cybertruck will cost $60,990, more than 50% over what Tesla Chief Executive Elon Musk had first touted in 2019. Speaking at a launch event in Texas, Musk claimed the Cybertruck is “a better truck than a truck while also being a better sports car than a sports car.”

Meanwhile, two other versions of the vehicle — the all-wheel drive and Cyberbeast — will come with price tags of $79,990 and $99,990, respectively.

Shares in Tesla were slightly lower in premarket U.S. trading on Friday.

4. Chinese manufacturing activity unexpectedly expands in November – Caixin data

Chinese factory activity unexpectedly moved back into expansion territory in November, a private survey showed on Friday, as a mild increase in domestic demand helped offset a persistent decline in overseas orders.

The Caixin manufacturing purchasing managers’ index (PMI) rose to 50.7 in November, topping expectations for a reading of 49.3, and improving sharply from 49.5 in the prior month.

A reading above 50 indicates expansion, with the Caixin survey now coming back into growth after a surprise contraction in October.

The figure stood in contrast to government PMI data released on Thursday, which showed a bigger-than-anticipated decline in manufacturing activity.

But the Caixin survey differs from the government data in its scope, focusing more on smaller, private enterprises as opposed to the bigger, state-run firms covered by the official survey. Investors usually use both surveys to get a broader picture of the Chinese economy.

5. Oil slips amid skepticism over OPEC+ output reductions

Oil prices retreated Friday, adding to the previous session’s losses, in a sign that markets were skeptical of the efficacy of fresh voluntary crude output cuts agreed by OPEC+ producers.

By 04:57 ET, the U.S. crude futures traded 0.2% lower at $75.83 a barrel, while the Brent contract dropped 0.2% to $80.68 per barrel. Both contracts shed over 6% each in November.

The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, agreed on Thursday to a voluntary output reduction of 900,000 barrels per day in addition to extending 1.3 million barrels per day in production slashes already in place.

Unusually, however, OPEC officials said that the cuts will be announced by individual members and not by the secretariat as a whole, an announcement that reportedly fed concerns over fraught relations within the coalition. The OPEC+ meeting was initially slated to occur in person last Sunday, but was postponed and shifted online following internal disagreements over production targets, reports said.