DHUnplugged #628: Lame Ducks/Schmucks

Crypto crash part XXIVV. The lesson is now clear - never put your company name on a sports facility.

The Dems going to have a tough day - Biden concedes that a change is coming.

Markets are caught between earnings downgrades and seasonal benefits - which way will it go?

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Warm Up

- Election Day! Lots looking for split govy!

- Glitch on the server - last CTP may be a problem

- All about Musk - All of the time - gotta keep relevant

- Employment Report - Can't stop never gonna stop!

- New Server Up - lots of dev time on this migration...

Market Update

- Starting out November on the wrong foot

- Who Will run in 2024? Markets trying to sniff out the playbook

- China's stock market rally hard! - False hopes?

- Incredible - FTX now needs bailout

IMPORTANT UPDATE

- TrendTracker: S&P 500 earnings are up 2.2% yr/yr in Q3, but they are now expected to fall 1% in Q4 - FactSet

- "On June 30, the estimated earnings growth rate for Q4 2022 was 9.1%. By September 30, the estimated earnings growth rate had fallen to 3.9%. Today, the estimated earnings decline is -1.0%."

- Earnings are currently expected to return to yr/yr growth in Q1 and accelerate throughout 2023, coming in at ~5% growth for the year (down from nearly 10% not long ago).

- Those estimates still seem relatively optimistic/stale if the economy continues to soften as many economists expect.

- Estimates for 2023 seem likely to come down further when companies will give initial guidance for the year with Q4 results in Jan-March.

Earnings Slowing

BUT......

- According to the historical trends during years of mid-term elections

- Gridlock on Capitol Hill would be supportive of risk assets. Being forced to compromise serves to moderate the more extreme inclinations of each party, providing a more stable policy backdrop for investors.

-- -The data supports this.

- US equities have averaged annual gains of 12.9% when a president has had to contend with a split Congress.

- This compares with a more modest increase of 6.7% when a Democratic president has controlled both chambers.

Stock Trends - Mid-Terms

Twitter Chaos

- $8 Blue Checkmark - what is the point?

- Flip flop - now $8 checkmark waits until after the election

- Job cuts - massive headcount reduction (3,600- then a reversal a few days later

- Blue Checkmark warning - imposters will get banned for life

---- So fake news and hate is okay, but just don't pose as Elon? What a joke!

- Musk wrote on Sunday that, moving forward, Twitter will now permanently suspend impersonators' accounts without warning if they are not clearly labeled as parody.

- Advertisers pulling out "temporarily"

- - Musk uses it as a great way to make excuse for layoffs - even though layoffs were happening before the advertiser embargo

Crypto

- And that was that - FTX has liquidity crunch after massive withdrawals

- Sam Bankman Fried panics and sells all to Binance - Binance will back all transactions

- Remember Fried stepped in on some of the "stablecoin" deals hoping that they could save them

- Fried has been called the last resort for many crypto - the new JP Morgan

-- - The FTX co-founder is on the brink of a 94% wealth wipeout

- Major coins were getting crushed early in the day Tuesday on the liquidity scare - - > Rally with this news

- - Seems that this whole industry has been build on hope and greed rather than any substantive math/finance

Apple - Finally Succumbs

- Taiwan's Foxconn, Apple Inc's biggest iPhone maker, said on Monday it was working to resume full production at a major plant in China's Zhengzhou as soon as possible that has been hit by COVID-19 curbs,