Financial Markets and Economy
Oil Companies Shift Exploration Tactics, Curb Spending (The Wall Street Journal)
In June, oil giant BP PLC announced what it deemed an “important” new discovery in Egypt.
It turned out to be a modest natural-gas find that didn’t even rank in the top 50 discoveries since 2012.
Gundlach Says ‘Look Out’ for Exploding U.S. Deficits (Bloomberg)
Bad times lie ahead for bondholders as rising inflation and resurging deficits conspire to drive up interest rates, according to Jeffrey Gundlach.
“We’re in the eye of a hurricane for the next three to four years,” Gundlach, chief executive officer of DoubleLine Capital, said Tuesday at the Impact 2016 conference hosted by Charles Schwab Corp. in San Diego. “Come 2018, 2019 and 2020, look out!”
Italy’s Bond Yields Touch Four-Month High as Debt Supply Weighs (Bloomberg)
Italian bonds led a decline among euro-area securities as a glut of supply from governments and companies weighed on fixed-income markets.
IRS Announces 2017 Estate And Gift Tax Limits: The $11 Million Tax Break (Forbes)
For 2017, the estate and gift tax exemption is $5.49 million per individual, up from $5.45 million in 2016. That means an individual can leave $5.49 million to heirs and pay no federal estate or gift tax. A married couple will be able to shield just shy of $11 million ($10.98 million) from federal estate and gift taxes.
Goldman Sachs Still Thinks Sterling Is 10 Percent Too Expensive (Bloomberg)
Goldman Sachs Group Inc. is doubling down on its call that the pound has further room to depreciate.
While some analysts' currency-valuation models show sterling looks cheap after hitting record lows, examining the pound from a perspective that incorporates Brexit's impact on trade and the wider economy paints a different picture, Goldman argued in a note published last week.
Earnings Magic Exposed (Value Walk)
Following the end of each fiscal quarter, SEC registered corporations release their financial statements. Typically, investors and the media place a lot of importance on these results. Consequently, stock prices tend to rise or fall based on how the financial results compare to a consensus of estimates made by Wall Street analysts.
Rough Day for Stocks Reporting Earnings (Bespoke)
Yesterday morning there were 75 stocks that reported earnings, and on average, these stocks declined 2.24%. That’s an extremely negative number when considering the fact that the S&P 500 only declined 38 basis points on the day. Below is a look at the average one-day performance of stocks reporting earnings by day this earnings season.
OPEC May Need Help to End the Global Glut of Oil (Bloomberg)
The Organization of Petroleum Exporting Countries aims to shrink the world’s bloated oil inventories with its first production cut in eight years, according to Secretary-General Mohammed Barkindo.
A former hedge fund quant is exposing the dark side of our growing dependence on algorithms (Harvard Gazette)
Whether we know it or not, complex algorithms make decisions that affect nearly every aspect of our lives, determining whether we can borrow money or get hired, how much we pay for goods online, our TV and music choices, and how closely our neighborhood is policed.
The Return of Dollar Shortages (Project Syndicate)
CAMBRIDGE – Immediately after World War II ended, a new phrase entered the economic lexicon: “dollar shortage.” European economies were coping with extensive war-related damage and a broad array of impediments to their efforts to rebuild their industrial base. At the time, the United States was the only provider of capital equipment for reconstruction. So, without access to US dollars, Europe’s economies could not obtain the inputs needed to increase their exports.
Why Is America Not Improving Its Business Regulation? (Peterson Institute for International Economics)
So much for being the nerve center of global capitalism.
The United States is the only country with significant state capacity that has not improved its business regulations over the past dozen years, as seen in the World Bank’s Doing Business report(link is external) published this week. In fact, the country shares some awkward company in the ranks of nonreformers—including Bolivia, Iraq, and Eritrea.
London House Prices Forecast to Plunge as Brexit Chokes Market (Bloomberg)
London property prices are set to fall next year as uncertainty about Britain’s exit from the European Union damps the U.K. housing market, according to the Centre for Economics and Business Research.
Brazil Real Estate To Fall 'Deeper' In 2017 (Forbes)
After years of skyrocketing housing costs in Brazil, the market has come down to earth since the recession. Next year will see even deeper declines in Brazilian real estate. Fitch Ratings said Tuesday that home prices in Brazil “will drop further as the economy remains challenged.”
The Illusion that "Old Measures No Longer Apply" (Hussman Funds)
“The recent collapse is the climax, but not the end, of an exceptionally long, extensive and violent period of inflation in security prices and national, even world-wide, speculative fever.
Reuters Trial Balloon: ECB "Almost Certain" To Keep Buying Bonds Beyond March (Zero Hedge)
It has been a while since we had an ECB-linked Reuters headline trial ballon, with the last one coming over a month ago and suggesting that the ECB may buy equities at some point in the future.
Wholesale Inventories Growth Weakest Since 2010 Even As Auto Stocks Soar (Zero Hedge)
Wholesale Inventories were unchanged year-over-year for the first time since June 2010 (up 0.2% MoM).
Services PMI Spikes To 11-Month Highs But Employers Remain "Cautious On Hiring" (Zero Hedge)
Following October's flash Manufacturing PMI spike (to 12-month highs), today's Services PMI surged to 54.8 (its highest since Nov 2015) led by the highest level of new orders in 2016. It appears the extraordinary surge in government spending in the last quarter has rippled through and spiked these surveys, notably divergen from the declines in regional Fed surveys.
Companies
Former Wells Fargo banker shares her story of the crushing stress from having to open so many needless customer accounts (Business Insider)
When news of the Wells Fargo scandal broke in September, the crushing anxiety that Angie Payden experienced as a banker there three years ago came rushing back.
Southwest Airlines is getting slammed after missing on revenue and giving a bleak outlook (Business Insider)
Southwest Airlines shares fell by as much as 9% in premarket trading on Wednesday after the company announced weak guidance for a key industry metric.
Leaked Hyperloop One Docs Reveal The Startup Thirsty For Cash As Costs Will Stretch Into Billions (Forbes)
Despite announcing a $50 million investment in mid-October, Hyperloop One plans to raise as much as $250 million in its next funding round early next year and is already seeking tens of millions in new financing, according to an investment document obtained by FORBES.
‘Lions Hunting Zebras’: Ex-Wells Fargo Bankers Describe Abuses (DealBook)
Mexican immigrants who speak little English. Older adults with memory problems. College students opening their first bank accounts. Small-business owners with several lines of credit.
Boeing Vows to Enhance Cash Bounty Even If 777 Output Gets Cut (Bloomberg)
Boeing Co. will remain a cash-generating juggernaut even if weak demand forces deeper production cuts to the 777 jetliner, a crucial source of profit, Chief Executive Officer Dennis Muilenburg said.
Technology
Comcast Reports Strong Earnings, Powered by Rio Olympics (The Wall Street Journal)
Comcast Corp. reported higher revenue and earnings in its third quarter, as cable operations added more video subscribers and the summer Olympics Games powered strong gains at its NBCUniversal broadcast unit.
Tesla Analysts Brace for Earnings Confusion on Reporting Change (Bloomberg)
A change in the way Tesla Motors Inc. will report quarterly results after today’s market close has created a bit of a last-minute headache for analysts, with earnings estimates varying widely.
Uber has quietly launched its own 'Uber for trucking' marketplace called Uber Freight (Business Insider)
Uber has already mastered moving people and food around cities. Now it's getting into the long-haul business with a new division called Uber Freight.
In China, some Apple users opt for iPhone makeover rather than buy new (Reuters)
Some Chinese iPhone owners are giving their old models a makeover to look like the latest iPhone 7, rather than buying new – a trend that could dent Apple Inc's efforts to boost sales in what has been its biggest growth driver.
10 hydrogen-powered cars in the works right now (Business Insider)
It may seem odd that so many automakers are developing hydrogen-powered cars.
Politics
Stop expecting Trump to change (Columbia Journalism Review)
INSANITY, AS EINSTEIN IS OFTEN credited with saying, is “doing the same thing over and over again, but expecting different results.”
Yet here we are after more than a year of Donald Trump’s self-enriching presidential campaign—and more than a year of media-on-media sniping over the press’s role in fueling the candidate who often spouts racism, sexism, and conspiracy theories.
Donald Trump Allies Focus Anger on Another Target: G.O.P. Leaders (NY Times)
Faced with the demoralizing prospect of a third consecutive loss in a presidential race, conservative Republicans are girding for an extended clash on two fronts in the months ahead: one with a Hillary Clinton administration that could look like a reprise of the partisan battles of the 1990s, and another with Republican leaders on Capitol Hill who rejected Donald J. Trump.
Texans are getting misleading information about whether they can vote (Think Progress)
Early voting in Texas began on Monday, amid polling indicating that the presidential race in Texas is closer than it has been in decades. Yet even as Texans have started making their way to the polls, reports indicate they are receiving false and conflicting information about whether or not they have the necessary documents to actually vote.
“White victims, unite!”: Donald Trump and Republicans sing the white (male) victimology blues (Salon)
The presidential campaign of Republican Donald Trump is lurching towards defeat. Trump is already making pre-emptive excuses for losing to his Democratic rival, Hillary Clinton, on Election Day.
Thousands Protest in Venezuela as President Calls Emergency Meeting (The Wall Street Journal)
CARACAS, Venezuela—The country’s political opposition called for a nationwide strike as more than 100,000 protesters took to the streets on Wednesday to demand a referendum against Venezuelan President Nicolás Maduro and denounce his government’s growing authoritarianism.
Health and Biotech
A major drug maker derailed a plan to limit OxyContin prescriptions early in the opioid epidemic (STAT News)
The warning signs of what would become a deadly opioid epidemic emerged in early 2001. That's when officials of the state employee health plan in West Virginia noticed a surge in deaths attributed to oxycodone, the active ingredient in the painkiller OxyContin.
Medicine Will Advance More in the Next 10 Years Than It Did in the Last 100 (Singularity Hub)
Mark Zuckerberg and his wife, Priscilla Chan, recently announced a $3 billion effort to cure all disease during the lifetime of their daughter, Max. Earlier this year, Silicon Valley billionaire Sean Parker donated $250 million to increase collaboration among researchers to develop immune therapies for cancer. Google is developing contact lenses for diabetic glucose monitoring, gathering genetic data to create a picture of what a healthy human should be and working to increase human longevity.
Life on the Home Planet
A Dubious Old Master Unnerves the Art World (NY Times)
AMSTERDAM — The painting convinced experts at the Louvre. Top French cultural officials declared it a national treasure. Dutch curators at the Mauritshuis and the Rijksmuseum joined the chorus of scholars who decided the enigmatic portrait of a man dressed in black was an undiscovered masterwork by Frans Hals.
Lady Gaga Carpool Karaoke (The Late Late Show with James Corden)
Lady Gaga joins James for a drive through Los Angeles singing her classics and tracks from her new album, "Joanne" before James tries on some of her classic looks and lets her take the wheel.
Russia is reportedly sending ships with cruise missiles to an already tense part of Europe (Reuters)
Russia is reinforcing its Baltic Fleet in Kaliningrad with two small warships armed with long-range cruise missiles to counter what it sees as a worrying NATO build-up in the region, Russia's daily Izvestia reported on Wednesday.
