☀️☕️ Opening, not opening. Covid-19 cases surge in China

23 November 2022

Happy Wed🐪esd⚽️y!

US large-cap S&P 500 closed 1.36% UP ▲ Tech-heavy Nasdaq Composite also closed 1.36% UP ▲ Pan European STOXX Europe 600 closed 0.73% UP ▲ HK’s Hang Seng Index closed 1.31% DOWN 🔻 Japan’s Nikkei 225 closed 0.61% UP ▲


Cleveland Fed, Best Buy, Musk, Genesis


Opening, not opening. Covid-19 cases surge in ChinaWho ya gonna call? Trustbusters! Penguin’s $2.2B Simon & Schuster deal is blocked

📖   MoneyFitt EXPLAINS

🎓 Trustbusting! Antitrust, monopolies, competition and consumers


Cleveland Fed President Loretta Mester, a voting member this year of the FOMC (the Federal Open Markets Committee, which sets US interest rates) said recent inflation data was promising (we knew that) and that she’d support reduced interest rate hikes going forward (bang in-line with expectations after the last FOMC meeting, which we will see the minutes for later today).

Nothing new, but good enough for US markets to end the day strong, along with some better-than-expected results from electronics retailer Best Buy and clothing companies American Eagle and Abercrombie & Fitch, which were up 13%, 18% and 21%. 

Best Buy results were actually pretty bad compared to a year ago, with profits per share for the October quarter down nearly 40%, but it was still much better than expectations from Wall Street’s highly-paid analysts and, to be fair, its own earlier guidance. So the company raised full-year guidance and up up up the stock went. (One concerning observation about consumers was that savings are being drawn down and credit usage is going up.)

Meanwhile, in the People’s Republic of Elon, more Twitter staff got sacked (from sales), $7.99 a month Twitter Blue’s November 29th relaunch got pushed back again, Musk crudely taunted Trump to come home from his sad Truth Social presence, the unabashedly anti-semitic Kanye West was allowed back on and paperwork was filed for Twitter to process payments (what begins with “s” and ends with “uper-app”?) It must all be an ingenious ploy by Musk to outrage the world back onto Twitter… and so far, it seems to be working. On Friday, Musk tweeted

“​​we just hit another all-time high in Twitter usage lol.”

And Digital-asset brokerage Genesis, which halted withdrawals last week and is still looking for US$1 billion in capital to cover a US$1 billion shortfall from the fall of disgraced crypto exchange FTX has helpfully denied any ‘imminent’ plans to file for bankruptcy. (They did try Binance, before you ask, and the answer was no.) Genesis is the sister company of Grayscale, which runs the largest bitcoin fund, the closed-ended Grayscale Bitcoin Trust (GBTC.)


Opening, not opening. Covid-19 cases surge in China

China on Monday hit 28,000 daily Covid-19 cases, close to record levels for the year. Market “experts” who only last week were trumpeting the inevitability of a bull market on the imminent reopening of the economy were bashed again. On Tuesday, Beijing shut down public spaces like museums, shopping centres and parks, and its Communist party secretary reaffirmed the zero-Covid policy. Over 40 Chinese cities (responsible for a fifth of Chinese GDP) are currently under restrictions.

The FT quoted one Wuhan doctor as saying ​​the “medical system will probably be paralysed when faced with mass cases.” Another said the “medical system is not ready for a large-scale reopening,” which is why we may see yet stricter lockdowns with continuing and maybe worse global supply chain disruption ahead until effective mass vaccinations can be done. 

Oh well. So now that’s five down days in a row for HK in its longest losing run in a month, though over that month, the benchmark Hang Seng Index is still up a pretty awesome 11.8% vs the S&P500 up (a still very good) 5.1%. Not to pick on crypto, but to pick on crypto a little, Bitcoin’s down 18% over the last (FTX-ing) month.

Who ya gonna call? Trustbusters! Penguin’s $2.2B Simon & Schuster deal is blocked

Ruling on an antitrust 🎓 lawsuit filed by the US Justice Department, a federal court has blocked the sale of publisher Simon & Schuster by its parent Paramount (until recently ViacomCBS) to Penguin Random House, a subsidiary of German media giant Bertelsmann. Now Penguin has to fork over a US$200 million termination fee to Paramount for the deal originally worth US$2.17 billion. Video and streaming-focused Paramount is still looking for buyers.

Because both Penguin and Simon & Schuster are among the “Big Five” US book publishers, the Department of Justice Antitrust Division said the deal would have given the combined company too much control over how much authors are paid. Looks like a case for The Trustbusters!

Thank you for spending a few minutes of your time with us. Remember to take time for yourself and be thankful for what you have.

📖 MoneyFitt EXPLAINS:

🎓 Trustbusting! Antitrust, monopolies, competition and consumers (and a tiger)

While it may seem anti-capitalistic for a government agency to stop one private company from buying or merging with another on either agreed or hostile terms, there are strong reasons for it to happen!Competition or antitrust laws exist to protect consumers from unlawful monopolies or unfair business practices which would harm them through higher prices and less competition while benefiting certain powerful companies.The stated mission of the US Federal Trade Commission (FTC) is to protect the public from deceptive or unfair business practices and from unfair methods of competition. The European Competition Commission and the Competition and Markets Authority in the EU and UK have similar mandates.Preventing mergers and acquisitions from resulting in monopolies is perhaps the easiest part of the job, but firms that have become monopolies or overly concentrated market power can also be broken up.Collusion between several companies in formal or informal cartels with practices such as price fixing is also forbidden, though proving it in court can be a lot harder.Weird word, though, “antitrust.”

Put Standard Oil Trust in your Tank. IMAGE CREDIT: Exxon Mobil

The word “antitrust” is most often used in the US and comes from the battle with “trusts”, which were pioneered in the 1880s by oil magnate John D Rockefeller to group companies across US state lines under one controlling legal body specifically to concentrate power and reduce or eliminate competition. Thus was born the Standard Oil Trust. (S for Standard, O for Oil, hence “ESSO”.) Only in 1911 was it finally broken up and split into 34 companies.In the US, both the Federal Trade Commission and the entirely separate Department of Justice Antitrust Division enforce federal antitrust laws, agreeing to take cases based on expertise in particular industries or markets. Perhaps just one agency would seem… monopolistic?

Please do your own research – we create educational and entertaining content so you can start the day understanding the financial and business worlds a little better. However, this is NOT financial advice.

MoneyFitt (Spendolater Pte Ltd) is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information. The information contained is not intended to be a source of advice or credit analysis with respect to the material presented. Any ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial, tax or legal professional and independently researching and verifying information. Content is intended to be used and must be used for informational purposes only.

MoneyFit Morning Archive (to 07-Nov-22)

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