Tag Archives: Wall Street

A tense day of protests and prayers in New York City on Oct. 7 anniversary

Smashed windows, red paint and graffiti discovered spray-painted on the CUNY Advanced Science Research Center

Important Takeaways:

  • In the largest planned pro-Palestinian action of the day, protesters are expected to march through Manhattan, from Wall Street to Columbus Circle
  • A vigil to remember those killed and missing in last year’s Hamas attack on Oct. 7 will come within blocks of a pro-Palestinian march Monday night.
  • NYPD officials are planning to keep both groups separate in what is expected to be the culmination of a tense day of protests and prayers.
  • Smashed windows, red paint and graffiti including “divest now” was discovered spray-painted on the CUNY Advanced Science Research Center on the City College of New York campus in Hamilton Heights on Monday morning.
  • At Columbia University, access is limited to ID holders in an effort to keep out outside agitators.
  • More walkouts are expected in the afternoon, with both students and faculty from CUNY and city public schools gathering at Washington Square Park, to join the larger protest marching north.
  • Blocks away in Central Park, a candle lighting ceremony with members of the Jewish community will remember those killed, with music and prayer
  • Police officials say they are most concerned about the protest in Times Square, and the pro-Israeli prayer vigil in Central Park.

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Wall Street woes: Warren Buffet selling off large shares could be a sign of trouble ahead

Warren-Buffett-The-Motley-Fool

Important Takeaways:

  • For the better part of six decades, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) CEO Warren Buffett has been one of Wall Street’s most-revered investors. Overseeing a cumulative return of more than 5,650,000% in Berkshire’s Class A shares (BRK.A) since becoming CEO has earned Buffett quite the following, as well as the nickname, “Oracle of Omaha.”
  • But sometimes Berkshire’s quarterly operating results, or Form 4 filings with the Securities and Exchange Commission, can tell a more thorough story — even if it’s an unpleasant one.
  • Recently, Buffett has been a somewhat aggressive seller of Bank of America (NYSE: BAC) stock. Between July 17 and Aug. 30, Berkshire’s stake in BofA has declined by about 150 million shares, equating to roughly $5.4 billion.
  • This $5.4 billion in selling activity is a pretty clear warning to Wall Street and investors.
  • The fact that Buffett has dumped nearly 15% of his company’s stake in Bank of America in a span of just over six weeks suggests clear worry about the U.S. economy and stock market. Like pretty much all bank stocks, BofA is cyclical.
  • The other issue is it puts Berkshire Hathaway on track for its eighth consecutive quarter of selling more securities than it’s purchased.
  • Collectively, Warren Buffett has overseen $131.6 billion more in securities sold than purchased between Oct 1, 2022 and June 30, 2024.
  • But the bigger story is what price dislocation will attract Buffett next. Following the financial crisis, Buffett invested $5 billion into Bank of America preferred stock. This helped to shore up BofA’s balance sheet at a time when banks were Wall Street’s chopped liver. More importantly, it gave Buffett access to warrants entitling him the right to buy 700 million shares of BofA stock at $7.14 per share, which he did for Berkshire Hathaway in mid-2017.
  • Periods of emotion-driven selling, while brief, have historically been Warren Buffett’s time to shine. With stocks at one of their priciest valuations in history, Buffett’s selling activity foreshadows both the peril and promise of what’s to come.

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Guest on Dr. Phil’s show discloses U.S. Treasury of being a pawn of Wall Street basically allowing China to infiltrate the country in exchange for profit

Dr Phil

Important Takeaways:

  • Dr. Phil Guest Exposes High-Tech Chinese Military Operations Near American Bases On U.S. Soil
  • A map displayed on Dr. Phil Primetime showed how Chinese nationals are buying massive amounts of land surrounding American military bases.
  • An expert named Kyle Bass of Hayman Capital Management explained how, in one instance, a Chinese military general named Sun bought over 100 square miles of land between America’s most active Air Force training base and the Mexico border.
  • Bass noted Sun obtained a permit to build windmills on the land despite the location having a small amount of wind, saying, “They want to put up windmills for two reasons. They want to connect directly to the U.S. grid so that they can upload malware to the grid and they can monitor the grid.”
  • He added, “They also want to build these windmills 700 feet tall. Imagine a windmill that’s almost as tall as the Washington Monument and they can put cameras up there that map the horizon and they can map the horizon with one square inch of clarity. Right next to our largest Air Force military training base. Every Air Force pilot trains at Laughlin Air Force Base.”
  • Regarding the approval of the land purchases, Bass accused the U.S. Treasury of being a pawn of Wall Street and basically allowing China infiltrate the country in exchange for profit.

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Another Round of Layoffs coming to Goldman Sachs

Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”

Important Takeaways:

  • Goldman Sachs to chop 250 more workers after ‘David’s Demolition Day,’ sources say
  • Goldman Sachs plans to make another round of job cuts — its third in less than a year — as dealmaking profits continue to tank, sources told The Post on Tuesday.
  • The David Solomon-led investment bank will cull an additional 250 workers on the heels of 3,200 being fired in January in what staff had dubbed “David’s Demolition Day,” an insider said.
  • The latest layoffs could come in the next few weeks and the cuts will hit employees at every level including managing directors and other senior executives, according to the Wall Street Journal.
  • In September, the Wall Street giant — which had 45,000 employees — had pink-slipped 1% to 5% of its under-performers.
  • A Goldman Sachs spokesperson declined to comment.

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Raising the U.S. government’s $31.4 trillion debt ceiling: Wall Street preparing for default fallout

Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”

Important Takeaways:

  • As talks over raising the U.S. government’s $31.4 trillion debt ceiling intensify, Wall Street banks and asset managers have begun preparing for fallout from a potential default.
  • U.S. government bonds underpin the global financial system so it is difficult to fully gauge the damage a default would create, but executives expect massive volatility across equity, debt and other markets.
  • Even a short breach of the debt limit could lead to a spike in interest rates, a plunge in equity prices, and covenant breaches in loan documentation and leverage agreements.
  • Big bond investors have cautioned that maintaining high levels of liquidity was important to withstand potential violent asset price moves, and to avoid having to sell at the worst possible time.

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Goldman Sachs releasing 3,200 employees

Goldman's Job Cuts

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Goldman Sachs is cutting up to 3,200 employees this week as Wall Street girds for tough year
  • The global investment bank is letting go of as many as 3,200 employees starting Wednesday, according to a person with knowledge of the firm’s plans.
  • That amounts to 6.5% of the 49,100 employees Goldman had in October, which is below the 8% reported last month as the upper end of possible cuts.
  • Other investment banks are adopting a “wait and see” attitude: If revenues are tracking below estimates in February and March, the industry could cut more workers, said a person familiar with a leading Wall Street firm’s processes.

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Chief Equity Strategist warns of a Recession worse than ‘normal’

Revelations 18:23 ‘For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Morgan Stanley Warns of Something Worse Than a ‘Normal Recession’
  • Morgan Stanley’s Chief U.S. Equity Strategist Michael Wilson said that he’s convinced a corporate earnings recession is coming—and that it could be worse than a “normal” recession.
  • Businesses reluctant to cut staff in the face of deteriorating economic conditions and as demand falls would put more pressure on profit margins, he warned. This could lead to a situation where unemployment doesn’t move up meaningfully but corporate earnings plunge.
  • Separately, in an analytical note cited by Bloomberg, Wilson and his team of strategists said the soaring dollar was creating an “untenable situation” for stocks and this, combined with central banks tightening policy “at a historically hawkish pace,” means that odds are growing for “something to break.”

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Rampant inflation, Dow falls 700 points now below 30,000

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Biden threatens oil companies with ’emergency powers’ if they don’t boost supply amid inflation spike
  • The letters represent Biden’s latest attempt to use executive action to curb inflationary pressure. Inflation currently sits at a 40-year high of 8.6% and shows no signs of slowing down.
  • “Your companies and others have an opportunity to take immediate actions to increase the supply of gasoline, diesel and other refined product you are producing,” he continued. “My administration is prepared to use all reasonable and appropriate Federal Government tools and emergency authorities to increase refinery capacity and output in the near term, and to ensure that every region of this country is appropriately supplied.”
  • The letters come one day after Biden ordered the sale of another 45 million barrels of crude oil from the U.S. Strategic Oil Reserve.

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Rise in Inflation now 7.5%

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Inflation surges 7.5% on an annual basis, even more than expected and highest since 1982
  • The consumer price index for all items rose 0.6% in January, driving up annual inflation by 7.5%.
  • That marked the biggest gain since February 1982 and was even higher than the Wall Street estimate.
  • Real earnings for workers increased just 0.1% on the month when accounting for inflation.
  • Weekly jobless claims declined to 223,000, below the 230,000 estimate.
  • On a percentage basis, fuel oil rose the most in January, surging 9.5% as part of a 46.5% year-over-year increase. Energy costs overall were up 0.9% for the month and 27% on the year.
  • Vehicle costs, which have been one of the biggest inflation contributors since they began surging higher in the spring of 2021, were flat for new models and up 1.5% for used cars and trucks in January. The two categories have posted respective increases of 12.2% and 40.5% over the past 12 months.
  • Shelter costs, which make up about one-third of the total CPI number, increased 0.3% on the month, which is the smallest gain since August 2021 and slightly below December’s rise. Still, the category is up 4.4% over the past year and could keep inflation readings elevated in the future.
  • Food costs jumped 0.9% for the month and are up 7% over the past year.

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As U.S. inflation hits 31-year high, banks assess risks and opportunities

By Matt Scuffham

NEW YORK (Reuters) – Wall Street banks are planning for a sustained period of higher inflation, running internal health checks, monitoring whether clients in exposed sectors could pay back loans, devising hedging strategies and counseling caution when it comes to deals.

U.S. consumer prices this month posted their biggest annual gain in 31 years, driven by surges in the cost of gasoline and other goods.

Senior bank executives have become less convinced by central bankers’ arguments that the spike is a temporary blip caused by supply chain disruption and are stepping up risk management.

Higher inflation is generally seen as a positive for banks, raising net interest income and boosting profitability. But if it jumps high too quickly, inflation could become a headwind, top bankers warn.

Goldman Sachs Chief Operating Officer John Waldron last month identified inflation as the No. 1 risk that could derail the global economy and stock markets.

JPMorgan Chief Executive Officer Jamie Dimon told analysts last month that banks “should be worried” that high inflation and high interest rates increase the risk of extreme price movements.

A sustained period of higher inflation would pose both credit and market risk to banks, and they are assessing that risk in internal stress tests, said one senior banker at a European bank with large U.S. operations.

Risk teams are also monitoring credit exposures in sectors most affected by inflation, another banker said. They include firms in the consumer discretionary, industrial and manufacturing sectors.

“We are very active with those clients, offering hedging protections,” said the banker, who asked not to be named as client discussions are confidential.

Clients that may need extra funding to get them through a period of higher inflation are being advised to raise capital while interest rates remain relatively low, the banker said.

“It’s still a very beneficial environment to be in if you need funding, but that won’t last forever.”

Investment bankers are also assessing whether higher inflation and monetary tightening could disrupt record deals and public offering pipelines.

“We expect a sustained period of higher inflation, and monetary tightening could slow the momentum in the M&A market,” said Paul Colone, U.S.-based managing partner at Alantra, a global mid-market investment bank.

Alantra is advising clients in the early stages of M&A discussions “to review the risks sustained inflation could bring to both valuation and business results,” Colone said.

Sales and trading teams, meanwhile, are taking more calls from clients looking to reposition portfolios, which are vulnerable to a loss in value. When inflation ran out of control in the 1970s, U.S. stock indices were hit hard.

“We’re seeing more interest from clients in finding some manner of inflation protection,” said Chris McReynolds, Barclays’ head of U.S. inflation trading.

Treasury Inflation Protected Securities, which are issued and backed by the U.S. government, are proving popular, he said. The securities are similar to Treasury bonds but come with protection against inflation.

Traders are also seeing demand for derivatives that offer inflation protection such as zero-coupon inflation swaps, in which a fixed rate payment on an investment is exchanged for a payment at the rate of inflation.

“People are realizing they have inflation exposure and it makes sense for them to hedge their assets and liabilities,” McReynolds said.

Banks with diversified businesses are likely to fare best during a sustained period of inflation, most analysts say.

They expect that a steepening yield curve will boost overall profit margins, while trading businesses can benefit from increased volatility and the strength of deals, and initial public offering pipelines mean investment banking activity will remain healthy.

But Dick Bove, a prominent independent banking analyst, takes a different view. He anticipates the yield curve will flatten as higher rates reduce inflation expectations, crimping profit margins.

“Perhaps for as long as 12 to 18 months, bank stock prices will rise,” he said. “At some point, however, if inflation continues to rise, the multiples on bank stocks will collapse and so will bank stock prices.”

(Reporting by Matt Scuffham; Editing by Dan Grebler)