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  • How Fed rate moves could impact different sectors of the stock market in 2024

    How Fed rate moves could impact different sectors of the stock market in 2024

    Wall Street seems to agree that U.S. stocks will climb to fresh record highs in 2024. But the most important question for investors may still be the direction and speed of interest-rate moves. 

    Rate-sensitive groups of stocks with lackluster fundamentals, such as financials, utilities, staples, “may be able to outperform, at least early in the year,” if one expects interest rates “to come down quickly and permanently,” said Nicholas Colas, co-founder of DataTrek Research.

    But if “one expects a bumpier ride on the rate front,” then stronger groups, like technology and tech-adjacent sectors “should do better,” Colas said in a Monday client note.

    The S&P 500’s utilities, consumer staples and energy sectors have been the worst performing parts of the large-cap benchmark index so far in 2023, according to FactSet data.

    With an over 10% year-to-date decline, the S&P 500’s utilities sector
    XX:SP500.55
    has significantly underperformed the broader index’s
    SPX
    23.6% advance.

    The S&P 500’s best performing information technology sector
    XX:SP500.45
    was up 56.5% for the same period. But its consumer staples
    XX:SP500.30
    and energy
    XX:SP500.10
    sectors have slumped by 2.6% and 4.1% so far this year, respectively, according to FactSet data.

    Utilities and consumer staples are usually considered defensive investment sectors, or “bond proxies,” because they can help investors minimize stock-market losses in any economic downturn. Companies in these sectors usually provide electricity, water and gas, or they sell products and services that consumers regularly purchase, regardless of economic conditions.

    However, utilities and consumer staples stocks were under a lot of pressure this year. A relentless climb in U.S. Treasury yields in October made defensive stocks less attractive compared with government-issued bonds, or money-market funds offering 5%, especially as the economy remained strong, pushing recession expectations out further.

    Colas expects “weaker groups” to catch a stronger tailwind if rates continue to decline.

    See: Markets are declaring victory over inflation for Powell, and that has some economists worried

    The yield on the 10-year Treasury
    BX:TMUBMUSD10Y
    last week booked its biggest weekly decline in a year after the Federal Reserve signaled a pivot to rate cuts in 2024, which helped the S&P 500 score its longest weekly winning streak since 2017.

    The S&P 500’s utilities and consumer staples sectors rose 0.9% and 1.6% last week, respectively, compared with the information technology sector’s 2.5% advance and communication services sector’s
    XX:SP500.50
    0.1% decline, according to FactSet data.

    Earnings growth expectations for each S&P 500 sector in 2024 are indicated below. Sectors to the left of the dotted black line are expected to show better bottom-line results than the S&P 500 as a whole, while those to the right are expected to show weaker earnings growth.

    SOURCE: FACTSET, DATATREK RESEARCH

    Wall Street expects next year to see 11.5% growth in S&P 500 earnings-per-share (EPS), to $244, and 5.5% revenue growth, according to FactSet data.

    However, there is a wide dispersion across S&P 500 sectors. The range goes from 2% revenue and 3% earnings growth for the energy sector, to 9% revenue and 17% earnings growth for the information technology sector, according to data compiled by DataTrek Research.

    “Playing fundamentally weaker sectors therefore assumes even more good news on the rate front,” Colas said, adding that it still is riskier than sticking with “tried and true groups” like technology.

    Moreover, sectors such as utilities, financials and consumer staples are not expected to show 10% earnings growth next year, while health care and big tech-dominated groups like communication services, technology and consumer discretionary, are expected to show much better than average revenue and earnings growth in 2024, said Colas, citing FactSet data. 

    U.S. stocks closed higher on Monday, with the Dow Jones Industrial Average
    DJIA
    building on its all-time high set last week. The S&P 500 gained 0.5% and the Dow Industrials closed fractionally higher. The Nasdaq Composite
    COMP
    finished up 0.6%, according to FactSet data.

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  • Nio stock jumps as Abu Dhabi investor to pour in $2.2 billion

    Nio stock jumps as Abu Dhabi investor to pour in $2.2 billion

    Nio stock surged in premarket trade on Monday after the Chinese electric vehicle maker said it’s received a $2.2 billion investment from an Abu Dhabi investor.

    Terms call for CYVN to invest $2.2 billion for 294 million shares at $7.50 each. Nio stock closed Friday at $7.98.

    Nio’s U.S.-listed shares
    NIO,
    +1.53%
    jumped 8% to $8.64 in premarket trade.

    CYVN in July previously invested $738.5 million in Nio, as well as bought $350 million of shares in Nio from Tencent
    700,
    -0.89%    .
    The new deal at closing will give the Abu Dhabi group a 20% stake in the EV maker that focuses on the high-end of the market, and will give it the right to nominate two directors.

    “With the enhanced balance sheet, Nio is well prepared to sharpen brand positioning, bolster sales and service capabilities, and make long-term investment in core technologies to navigate the intensifying competitive landscape, while continually improving execution efficiency and system capabilities,” said William Li, founder, chairman and chief executive officer of Nio, in a statement.

    Nio has been cutting jobs and reducing projects that aren’t making financial contributions, as it fends off a price war from rivals including Tesla
    TSLA,
    +0.98%    .

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  • Fed could be the Grinch who 'stole' cash earning 5%. What a Powell pivot means for investors.

    Fed could be the Grinch who 'stole' cash earning 5%. What a Powell pivot means for investors.

    Yields on 3-month
    BX:TMUBMUSD03M
    and 6-month
    BX:TMUBMUSD06M
    Treasury bills have been seeing yields north of 5% since March when Silicon Valley Bank’s collapse ignited fears of a broader instability in the U.S. banking sector from rapid-fire Fed rate hikes.

    Six months later, the Fed, in its final meeting of the year, opted to keep its policy rate unchanged at 5.25% to 5.5%, a 22-year high, but Powell also finally signaled that enough was likely enough, and that a policy pivot to interest rate cuts was likely next year.

    Importantly, the central bank chair also said he doesn’t want to make the mistake of keeping borrowing costs too high for too long. Powell’s comments helped lift the Dow Jones Industrial Average
    DJIA
    above 37,000 for the first time ever on Wednesday, while the blue-chip index on Friday scored a third record close in a row.

    “People were really shocked by Powell’s comments,” said Robert Tipp, chief investment strategist, at PGIM Fixed Income. Rather than dampen rate-cut exuberance building in markets, Powell instead opened the door to rate cuts by midyear, he said.

    New York Fed President John Williams on Friday tried to temper speculation about rate cuts, but as Tipp argued, Williams also affirmed the central bank’s new “dot plot” reflecting a path to lower rates.

    “Eventually, you end up with a lower fed-funds rate,” Tipp said in an interview. The risk is that cuts come suddenly, and can erase 5% yields on T-bills, money-market funds and other “cash-like” investments in the blink of an eye.

    Swift pace of Fed cuts

    When the Fed cut rates in the past 30 years it has been swift about it, often bringing them down quickly.

    Fed rate-cutting cycles since the ’90s trace the sharp pullback also seen in 3-month T-bill rates, as shown below. They fell to about 1% from 6.5% after the early 2000 dot-com stock bust. They also dropped to almost zero from 5% in the teeth of the global financial crisis in 2008, and raced back down to a bottom during the COVID crisis in 2020.

    Rates on 3-month Treasury bills dropped suddenly in past Fed rate-cutting cycles


    FRED data

    “I don’t think we are moving, in any way, back to a zero interest-rate world,” said Tim Horan, chief investment officer fixed income at Chilton Trust. “We are going to still be in a world where real interest rates matter.”

    Burt Horan also said the market has reacted to Powell’s pivot signal by “partying on,” pointing to stocks that were back to record territory and benchmark 10-year Treasury yield’s
    BX:TMUBMUSD10Y
    that has dropped from a 5% peak in October to 3.927% Friday, the lowest yield in about five months.

    “The question now, in my mind,” Horan said, is how does the Fed orchestrate a pivot to rate cuts if financial conditions continue to loosen meanwhile.

    “When they begin, the are going to continue with rate cuts,” said Horan, a former Fed staffer. With that, he expects the Fed to remain very cautious before pulling the trigger on the first cut of the cycle.

    “What we are witnessing,” he said, “is a repositioning for that.”

    Pivoting on the pivot

    The most recent data for money-market funds shows a shift, even if temporary, out of “cash-like” assets.

    The rush into money-market funds, which continued to attract record levels of assets this year after the failure of Silicon Valley Bank, fell in the past week by about $11.6 billion to roughly $5.9 trillion through Dec. 13, according to the Investment Company Institute.

    Investors also pulled about $2.6 billion out of short and intermediate government and Treasury fixed income exchange-traded funds in the past week, according to the latest LSEG Lipper data.

    Tipp at PGIM Fixed Income said he expects to see another “ping pong” year in long-term yields, akin to the volatility of 2023, with the 10-year yield likely to hinge on economic data, and what it means for the Fed as it works on the last leg of getting inflation down to its 2% annual target.

    “The big driver in bonds is going to be the yield,” Tipp said. “If you are extending duration in bonds, you have a lot more assurance of earning an income stream over people who stay in cash.”

    Molly McGown, U.S. rates strategist at TD Securities, said that economic data will continue to be a driving force in signaling if the Fed’s first rate cut of this cycle happens sooner or later.

    With that backdrop, she expects next Friday’s reading of the personal-consumption expenditures price index, or PCE, for November to be a focus for markets, especially with Wall Street likely to be more sparsely staffed in the final week before the Christmas holiday.

    The PCE is the Fed’s preferred inflation gauge, and it eased to a 3% annual rate in October from 3.4% a month before, but still sits above the Fed’s 2% annual target.

    “Our view is that the Fed will hold rates at these levels in first half of 2024, before starting cutting rates in second half and 2025,” said Sid Vaidya, U.S. Wealth Chief Investment Strategist at TD Wealth.

    U.S. housing data due on Monday, Tuesday and Wednesday of next week also will be a focus for investors, particularly with 30-year fixed mortgage rate falling below 7% for the first time since August.

    The major U.S. stock indexes logged a seventh straight week of gains. The Dow advanced 2.9% for the week, while the S&P 500
    SPX
    gained 2.5%, ending 1.6% away from its Jan. 3, 2022 record close, according to Dow Jones Market Data.

    The Nasdaq Composite Index
    COMP
    advanced 2.9% for the week and the small-cap Russell 2000 index
    RUT
    outperformed, gaining 5.6% for the week.

    Read: Russell 2000 on pace for best month versus S&P 500 in nearly 3 years

    Year Ahead: The VIX says stocks are ‘reliably in a bull market’ heading into 2024. Here’s how to read it.

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  • Activision Blizzard to pay $55 million to settle California civil-rights lawsuit

    Activision Blizzard to pay $55 million to settle California civil-rights lawsuit

    Videogame maker Activision Blizzard has agreed to pay nearly $55 million to settle a California civil-rights lawsuit brought over complaints of sexual harassment, discrimination and pay disparities by women employees that helped trigger the company’s acquisition by Microsoft.

    The settlement, announced by the California Civil Rights Department on Friday evening, resolves the lawsuit filed against the “Call of Duty” videogame studio by the agency in 2021 over claims that it “discriminated against women at the company, including by denying promotion opportunities and paying them less than men for doing substantially similar work,” CRD said.

    The agreement, subject to court approval, will see Activision pay nearly $46 million into a settlement fund dedicated to compensating women employees and contract workers at the company, plus more than $9 million in attorneys’ fees and costs. Additionally, Activision will take steps “to help ensure fair pay and promotion practices at the company,” including retaining an independent consultant to evaluate its compensation and promotion policies.

    Yet the settlement also sees CRD withdraw its initial claims alleging a culture of widespread, systemic workplace sexual harassment at Activision, according to a copy of the agreement provided to MarketWatch. The document notes that the department is filing an amended complaint that removes the sexual-harassment allegations against the company and focuses on the gender-based pay and promotion claims.

    CRD made no note of its prior sexual-harassment claims against Activision in its announcement Friday. A spokesperson for the department said the statement “largely speaks for itself with respect to the historic nature of this more than $50 million settlement agreement, which will bring direct relief and compensation to women who were harmed by the company’s discriminatory practices.

    Representatives for Activision declined to comment.

    The Wall Street Journal first reported the news of the settlement Friday.

    The California agency’s complaint was one of several high-profile investigations by both state and federal regulators in recent years into alleged workplace misconduct at Activision and failures by its leadership to respond appropriately. 

    While Activision repeatedly denied the allegations, they ramped up pressure on the Santa Monica, Calif.-based company and its CEO, Bobby Kotick, and eventually led to a $68.7 billion takeover bid by Microsoft
    MSFT,
    +1.31%
    in January 2022. The acquisition closed this October after receiving approval by U.K. and E.U. antitrust regulators, though the U.S. Federal Trade Commission continues to challenge the deal in court. Kotick is expected to leave the company, which he led for more than three decades, at the end of this year.

    The settlement would be the second-largest ever for the California Civil Rights Department, according to the Journal, after its $100 million agreement with another Los Angeles-area videogame developer, Riot Games, to resolve gender-discrimination allegations in 2021. The agency had initially sought a much-larger settlement with Activision, the publication reported, citing how the state had estimated the company’s liability at nearly $1 billion to some 2,500 employees with potential claims.

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  • Broadcom now ranks among 10 largest U.S. companies after big 2023 stock gains

    Broadcom now ranks among 10 largest U.S. companies after big 2023 stock gains

    Nvidia Corp. has catapulted up the list of the most valuable U.S. companies this year, rising eight spots from the end of last year to sit in the fifth position with a market capitalization of $1.2 trillion.

    But other chip companies have seen their positions rise even more. Just look at Broadcom Inc.
    AVGO,
    +2.10%    ,
    which has climbed 16 spots over the course of 2023 and on Friday cracked the top 10 for the first time, according to Dow Jones Market Data. Broadcom eclipsed Visa Inc.
    V,
    -0.27%
    at Friday’s close to take the No. 10 spot, with a valuation of $527.7 billion.

    Read: Could Nvidia’s stock — up 231% this year — actually be a bargain?

    Admittedly, Broadcom had some help along the way. The company acquired VMware in late November, and its market capitalization gained about $50 billion at the close of the transaction, according to FactSet data.

    But Broadcom’s ascent also reflects how chip stocks have gotten more shine this year amid the artificial-intelligence frenzy. Broadcom’s stock has doubled so far in 2023.

    Mizuho desk-based analyst Jordan Klein expects “an order acceleration in networking silicon for AI clusters” in the second half of 2024, as calendar year 2025 could bring a big year of capital-expenditure investments in AI for ethernet back-end high-speed connections.

    Broadcom “is the KEY WINNER in that investment cycle as the arms dealer to all networking OEMs,” or original equipment manufacturers, wrote Klein, who’s associated with Mizuho’s sales team and not its research arm.

    Advanced Micro Devices Inc.
    AMD,
    +0.83%
    has also seen a nice march up the charts, rising 48 spots so far in 2023 to rank 30th in terms of market cap. AMD was valued at $223.9 billion as of Friday’s close.

    “We view AMD as well-positioned to gain incremental share of the hugely profitable $100 billion-plus accelerator market while continuing to make progress in server [central processing units] against incumbent [Intel],” BofA Securities analyst Vivek Arya wrote in a recent upgrade.

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  • Dow nabs 3rd straight record close, S&P has longest weekly win streak in 6 years

    Dow nabs 3rd straight record close, S&P has longest weekly win streak in 6 years

    U.S. stocks closed mostly higher Friday, with major U.S. equity indexes booking a seventh straight week in the green in the wake of the Federal Reserve’s policy meeting.

    The S&P 500 saw its longest weekly winning streak since November 2017, according to Dow Jones Market Data.

    How stock indexes traded

    • The Dow Jones Industrial Average
      DJIA
      rose 56.81 points, or 0.2%, to close at a record 37,305.16.

    • The S&P 500
      SPX
      was about flat, slipping less than 0.1%, to finish at 4,719.19

    • The Nasdaq Composite
      COMP
      gained 52.36 points, or 0.4%, to end at 14,813.92.

    What drove markets

    U.S. stocks finished mostly higher Friday, with the Dow Jones Industrial Average logging a third straight record close.

    Equities broadly rallied this week after investors digested a closely watched reading on U.S. inflation as well as the Federal Reserve’s latest policy statement and projections on interest rates. The Dow, S&P 500 and Nasdaq Composite each logged a seventh straight week of gains.

    The “more optimistic tone of markets over the last several weeks has been justified,” Russell Price, chief economist at Ameriprise Financial, said in a Friday phone call. It’s “reasonable” for the stock market to be pricing in rate cuts by the Federal Reserve in 2024, with the recent drop in 10-year Treasury yields helping to lift equities, he said.  

    Price said he’s expecting the Fed may begin cutting rates in June and the U.S. economy will slow to a “sustainable” pace of growth in 2024. In his view, real gross domestic product may rise 1.8% to 1.9% next year.

    Nearly all of the S&P 500’s 11 sectors finished with gains this week, while small-capitalization stocks saw a stronger rally than large-cap equities.

    The small-cap Russell 2000 index
    RUT
    posted a weekly gain of around 5.6%, FactSet data show. The S&P 500 rose around 2.5% this week.

    At his press conference on Wednesday, Fed Chair Jerome Powell gave “a nod” that inflation was on the right path and lower rates were on the horizon next year, according to Price. But when it comes to the federal-funds futures, Price said that traders appear to have gotten “too far ahead” in their bets on rate cuts.

    Fed-funds futures pointed to the central bank starting to reduce its benchmark rate as soon as March, according to the CME FedWatch Tool.

    Stocks hit a speed bump in Friday’s trading session after New York Federal Reserve Bank President John Williams pushed back against those rate expectations during an interview with CNBC. “We aren’t really talking about cutting interest rates right now,” Williams said.

    Inflation, as measured by the consumer-price index, slowed to a year-over-year rate of 3.1% in November, down significantly from last year’s peak of 9.1% in June.  But “it’s too early to call ‘mission accomplished’ just yet” for the Fed’s goal of bringing inflation down to its 2% target, said Price.

    Still, Powell was explicit during his press conference about not needing a recession to cut rates, according to Nationwide’s chief of investment research Mark Hackett. “That was code for a soft landing,” Hackett said by phone Friday. 

    See: Williams says the Fed isn’t ‘really talking about cutting interest rates right now’

    On the economic news front Friday, the New York Fed’s Empire State manufacturing survey showed U.S. manufacturing activity continued to struggle as the gauge tumbled to a four-month low. Flash services and manufacturing PMIs from S&P affirmed that manufacturing activity remained weak, while services activity reached a five-month high.

    Read: U.S. economy posts steady but lackluster growth at year’s end, S&P finds

    Meanwhile, the yield on the 10-year Treasury note
    BX:TMUBMUSD10Y
    fell 31.7 basis points this week to 3.927%, the largest weekly drop since November 2022, according to Dow Jones Market Data.

    The S&P 500 ended Friday about flat, but just 1.6% below its record close, reached Jan. 3, 2022.

    “The momentum in the market is undeniably incredibly strong right now,” said Nationwide’s Hackett, though on Friday investors appeared to be taking “a natural break.”

    Companies in focus

    • Palantir Technologies Inc. shares
      PLTR,
      -0.05%
      slipped about 0.1% on Friday after the company announced an extension to a U.S. Army contract.

    • Steel Dynamics Inc.’s shares
      STLD,
      +4.52%
      jumped 4.5% after the company reported earnings, making it one of the S&P 500’s best performers in Friday’s trading session.

    • Costco Wholesale Corp. shares
      COST,
      +4.45%
      climbed around 4.5% after reporting fiscal first-quarter earnings and revenue largely in line with expectations following the market’s close on Thursday, and announced a special dividend of $15 a share.

    • JD.com
      JD,
      +4.46%
      gained 4.5% as fresh stimulus out of China helped boost shares of companies based in the world’s second-largest economy. Alibaba Group Holding Ltd.’s stock
      BABA,
      +2.76%
      rose 2.8%.

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  • Oil prices post first weekly gain in 8 weeks amid ship attacks in Red Sea

    Oil prices post first weekly gain in 8 weeks amid ship attacks in Red Sea

    Oil futures fell on Friday, but finished off the session’s lows to eke out a gain for the week — the first for U.S. and global benchmark crude prices in eight weeks.

    Attacks on ships traveling through the Red Sea, blamed on Yemen’s Houthi rebels, raised the potential for disruptions to the transport of oil and other goods, providing some support for prices.

    Oil saw larger declines early Friday after a Federal Reserve official walked back dovish comments made earlier this week by the Fed Chair Jerome Powell, helping to strengthen the U.S. dollar.

    Price action

    • West Texas Intermediate crude for January
      CL00,
      +0.49%

      CL.1,
      +0.49%

      CLF24,
      +0.49%
      declined by 15 cents, or 0.2%, to settle at $71.43 a barrel on the New York Mercantile Exchange, with prices ending 0.3% higher for the week, according to Dow Jones Market Data.

    • February Brent crude
      BRN00,
      +0.52%

      BRNG24,
      +0.52%      ,
      the global benchmark, fell 6 cents, or nearly 0.1%, to $76.55 a barrel on ICE Futures Europe, settling 0.9% higher for the week.

    • January gasoline
      RBF24,
      -0.16%
      added 0.9% to $2.14 a gallon, up almost 4.3% for the week, while January heating oil
      HOF24,
      +0.20%
      climbed 1.1% to $2.62 a gallon on Nymex, marking a weekly rise of 1.5%.

    • Natural gas for January delivery
      NGF24,
      -0.88%
      gained 4.1% to $2.49 per million British thermal units, but still logged a weekly loss of 3.5%.

    Price support

    Danish shipping company A.P. Moeller-Maersk
    MAERSK.A,
    +7.52%
    said it will pause all of its container shipments through the Red Sea until further notice and detour them around Africa, Reuters and Bloomberg reported Friday, amid rising risks to its fleet posed by Houthi militants.

    The Red Sea is “one of the hot pockets of seaborne crude flows,” accounting for approximately 10% of global volume, said Manish Raj, managing director at Velandera Energy Partners. “Although the attackers lack sophistication … shipping crews are even less sophisticated, making them easy targets.” 

    A potential blockage of the Red Sea route would be “chaotic indeed, but not nearly as detrimental as blockage of [the] Strait of Hormuz near Iran, for which there is no viable alternative,” Raj said.

    Read from the AP: How are Houthi attacks on ships in the Red Sea affecting global trade?

    For now, there is concern over higher insurance costs for these ships, said Phil Flynn, senior market analyst at the Price Futures Group.

    “With ships in the Red Sea continuing to be at high risk, ‘it won’t take that much for the market’ to see oil prices spike if an oil tanker should be hit.”


    — Phil Flynn, Price Futures Group

    Obviously, the risk to oil supply is large, although “so far, most of the attacks have been on cargo ships and not oil-related ships,” Flynn told MarketWatch.

    However, as ships in the Red Sea continue to be at high risk, “it won’t take that much for the market” to see oil prices spike if an oil tanker is hit, Flynn said.

    For the week, both U.S. and global benchmark crude prices posted gains.

    “The combination of lower U.S. inventories, stronger economic data, and improved OPEC compliance [with production cuts] for the month of November were the highlights of the week,” said Peter McNally, global head of sector analysts at Third Bridge.

    “However, there are ongoing seasonal challenges that forced OPEC to sustain production cuts through the first quarter of 2024, so it remains to be seen if they have done enough to prevent inventories from continuing their upward trend,” he said.

    Read The Year Ahead: Why oil may not see a return $100 a barrel in 2024

    Price pressures

    Oil had been trading lower early Friday after New York Federal Reserve President John Williams told CNBC that it is “premature” to discuss whether it is time to cut interest rates. “We aren’t really talking about cutting interest rates right now,” Williams said.

    That ran contrary to Powell’s comments Wednesday that Fed officials were starting to discuss when to cut rates.

    After the euphoria in the U.S. stock market over the Powell “pivot party” on Wednesday, we got a “wake-up call” from Williams when he pushed back on market expectations for a March rate cut, Michael Hewson, chief market analyst at CMC Markets UK, said in market commentary.

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  • DocuSign's stock pops as company reportedly considers a sale

    DocuSign's stock pops as company reportedly considers a sale

    One-time pandemic darling DocuSign Inc. may be looking to sign a deal of its own.

    The e-signature company is working with advisers as it considers a sale, the Wall Street Journal reported Friday afternoon. A deal for DocuSign
    DOCU,
    +11.37%    ,
    valued at upwards of $11 billion, could result in one of the largest recent leveraged buyouts, the report said, noting that private-equity firms and technology companies were among the potential suitors.

    DocuSign shares were up more than 11% in afternoon trading Friday following the report.

    A DocuSign spokesperson said the company doesn’t comment on rumors or speculation.

    The company was a pandemic-era poster child as businesses looked for ways to get signatures on contracts, mortgages and other documents in a virtual world. But DocuSign has struggled to match its earlier growth rates as offices have resumed in-person activity, and management acknowledged a tough macroeconomic environment when DocuSign last posted earnings.

    DocuSign shares traded above $310 at their highest point in September 2021, but they closed Thursday near $56. The stock was changing hands just south of $64 Friday amid the intraday rally.

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  • This is what we can expect to see from meme stocks in 2024

    This is what we can expect to see from meme stocks in 2024

    It may be a couple of years since the meme-stock feeding frenzy hit its heights, but we’re still seeing occasional bursts of meme-like activity in number of stocks.

    No discussion of meme stocks would be complete without OG AMC Entertainment Holdings Inc.
    AMC,
    -0.89%    .
    But while the movie theater chain and original meme stock darling still grabs plenty of attention, it no longer fits the bill of a meme stock, according to Alicia Reese, VP of equity research at Wedbush. “AMC has seemingly lost its meme status, its share price having come crashing back down to earth over the past several months, particularly since its APE fold-in and reverse stock split,” she said. “AMC is now trading at a more normalized valuation, even if still at the high-end of its pre-meme historic range.”

    AMC’s shares ended Friday’s session at $6.65, a far cry from their high of $393.63 on June 2, 2021, during the meme-stock frenzy.

    Related: AMC’s stock falls more than 5% after company completes $350 million equity offering

    “AMC’s premium valuation here is driven in part by a sub-section of the shareholders it gained during its meme stage, who have remained loyal to the company and have long claimed to be AMC shareholders for life,” Reese added. “AMC shed all the rest of its meme-era shareholders and are now left with the lifers, along with some institutional shareholders now that valuation has come back to a more normalized range.”

    The analyst thinks that in 2024, AMC will continue to issue pre-authorized shares to pay down its high-debt balance, as evidenced by the $350 million equity offering completed this week. “The company is focused on right-sizing the balance sheet, while attempting to maintain strong relations with the AMC lifers still propping up the stock,” said Reese.

    Fellow original meme stock GameStop has also been in the news recently, with the company’s board of directors approving a new investment policy, which lets the company invest in equity securities, among other investments. The board also gave Chairman and Chief Executive Ryan Cohen the authority to manage the investment portfolio. The new policy was dubbed “alarming” and “inane” by Wedbush Managing Director Michael Pachter.

    “If he can invest in anything – farmland, chicken feed, cryptocurrency – that’s not in the best interests of the shareholders,” he told MarketWatch. “Heaven knows what he will do.”

    Related: GameStop’s plan to buy stocks with company cash ‘alarming’ and ‘inane,’ analyst says

    As for GameStop, the analyst describes the videogame retailer as a declining business, pointing to the company’s third-quarter revenue of $1.078 billion, which was down from $1.186 billion in the prior year’s quarter. “They are shrinking, period, and they can’t save their way to prosperity,” he added.

    The company’s new investment policy could also fuel more meme-style activity, according to Pachter, who says that Cohen’s moves will be closely watched. “He will invest in something and it will possibly become the next meme stock,” the analyst told MarketWatch. 

    Pachter pointed to Cohen’s decision in 2022 to unload his huge stake in beleaguered home goods retailer and sometime meme stock Bed Bath & Beyond Inc. just months after buying it. In August of that year Cohen sold his entire stake in Bed Bath & Beyond five months after accruing the stake in an activist campaign, amassing a profit of more than $58 million.

    Stocktwits, a social platform for investors and traders, told MarketWatch that it has seen a dedicated core audience of retail investors stick with the likes of AMC and GameStop. “Message volume and sentiment have remained elevated on the platform throughout the year, with their audiences growing temporarily around earnings or other events that create volatility,” Tom Bruni, senior writer at Stocktwits, told MarketWatch.

    Related: Small-cap Chinese stocks spark meme-like buzz

    Retail traders are still on the lookout for high-volatility situations, according to Bruni, who cited the example of Vietnamese electric vehicle stock VinFast Auto Ltd.
    VFS,
    +13.54%    ,
    which had a “crazy month” in August before crashing back down. “However, we would note that there have been fewer instances of these types of meme stocks occurring this year, and their lifespan tended to be pretty short,” he added.

    “For stocks with the ‘meme’ potential in 2024, look to beaten-down areas of the market that already have strong retail investor communities around them,” Bruni told MarketWatch. “Several that stick out are electric vehicle stocks (specifically startups), solar stocks, or anything China-related. Traders will likely be looking for stocks at the intersection of these themes, like Lucid Group ($LCID), as potential ‘powder kegs’ for volatility in 2024.”

    Shares of Lucid Group Inc.
    LCID,
    -7.20%
    are down 30.2% in 2023, compared with the S&P 500 index’s
    SPX
    gain of 22.9%.

    One thing is for sure – the social media dynamics that created the meme stock phenomenon are not going away. “Internet culture will continue to be more prevalent in markets as the world becomes more digitized and young people age into participation,” Tommy Tranfo, head of community at Stocktwits, told MarketWatch. “Crypto markets are an area where we expect to see a large concentration of this activity, particularly within the context of a crypto bull market, which will likely bring in a new wave of market participants who will skew toward the internet culture demo.”

    Related: This EV company has a bigger market cap than Ford or GM. But you may not have heard of it.

    “New crypto meme communities such as the $BONK (a dog-themed coin on the Solana blockchain) are already clear examples of this craze taking place,” he added.

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  • Bundesbank Cuts German Growth Forecasts

    Bundesbank Cuts German Growth Forecasts

    By Ed Frankl

    Germany’s central bank lowered its growth forecasts for the country’s economy for the next two years due to lower global demand, according to a twice-yearly report published Friday.
    

    The Bundesbank now expects gross domestic product growth at 0.4% and 1.2% for 2024 and 2025, down from 1.2% and 1.3%, respectively, under previous forecasts made in June.
    

    

    The bank penciled in for GDP to fall 0.1% in 2023 as a whole, and also predicts growth at 1.3% in 2026 in the fresh forecasts.
    

    Weak foreign demand is the main drag on the country’s key industrial sector, while restrained private consumption and higher financing costs are dampening investment, it said.
    

    However, the economy will benefit from a robust labor market, strong wage growth and falling inflation that should help bring about a recovery in household spending, it added.
    

    “From the beginning of 2024, the German economy is likely to return to an expansion path and gradually pick up speed,” Bundesbank President Joachim Nagel said.
    

    This comes as inflation is set to fall faster than previously expected. The Bundesbank sees harmonized annual inflation–based on European Union metrics–at 2.7% and 2.5% in 2024 and 2025, respectively, down from the 3.1% and 2.7% it predicted in June.
    

    “Monetary policy tightening is increasingly yielding results,” Nagel said.
    

    However, inflation is still set to be 2.2% in 2026, above the 2% target of the European Central Bank, which has recently raised rates at an unprecedented speed. The ECB held rates at a record high at its meeting this week.
    

    Meanwhile, the latest turmoil related to the German government’s budget–which for 2024 was only agreed to this week–won’t significantly alter the fiscal and macroeconomic outlook, according to the Bundesbank.
    

    However, there is still uncertainty regarding future fiscal policy, in particular for 2025 and in terms of the country’s transition to cleaner energy, it said.
    

    Write to Ed Frankl at edward.frankl@wsj.com
    

    

    


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  • 
		
		
    
			
    Chaotic 'triple witching' set for Friday, as $5.3 trillion in options expire
    
			
    Chaotic 'triple witching' set for Friday, as $5.3 trillion in options expire
    
			
    

    Options contracts tied to more than $5 trillion worth of stocks, exchange-traded funds and indexes are set to expire on Friday as the latest “triple witching” expiration event collides with the rebalancing of the S&P 500 and Nasdaq-100. 
    

    The result could be a high-octane, and potentially extremely volatile, session where tens of billions of contracts and shares could change hands, market strategists said. 
    

    

    According to figures from Rocky Fishman, founder of Asym500, options with a notional value of $5.3 trillion are set to expire, with the biggest slug expiring ahead of the open. 
    

    

              
    

    

    

    ASYM50
    

    

    

    On one side, many traders will be cashing in bullish bets that are deep in the money, while some roll their positions, forcing market-makers to continue to hedge their exposure. 
    

    At the same time, managers of index-tracking funds will need to finish adjusting their holdings before the announced index changes take effect.
    

    Already, trading volume has been trending higher all week. In the U.S. market, 17 billion shares changed hands on Thursday, according to Steve Sosnick, chief market strategist at Interactive Brokers, during a phone interview with MarketWatch. That is up from 10.6 billion on Tuesday. 
    

    “I expect to see enormous volumes tomorrow in a lot of popular names,” Sosnick said. 
    

    “Not only will this one be the largest option expiration of the year (as is typical for December), but it is currently set up to become the largest SPX option expiration in more than a decade,” Fishman said in a report shared with MarketWatch. 
    

    Brent Kochuba, founder of Spotgamma, an options-market analytics provider, went even further during a phone interview with MarketWatch: “This might be the biggest options expiration ever.” 
    

    

              
    

    

    
        
      
    

    ASYM50
    

    

    

    As markets have rallied, traders have been scooping up bullish options contracts at a record pace, according to data from Cboe Global Markets, the biggest operator of options exchanges in the U.S. 
    

    For S&P 500-linked options, typically the most popular product, 4.8 million contracts changed hands on Thursday, according to Cboe, a new record, surpassing the previous record from Nov. 14. 
    

    Also, total call-trading volume for all U.S. equity options exceeded 30 million contracts on Wednesday, according to Goldman Sachs Group, making it one of the busiest days for trading in bullish contracts this year. 
    

    Aggressive call-buying over the past month has helped push the S&P 500 to just shy of its record closing high, options-market experts said. The S&P 500
    
        SPX
    
       gained 8.9% in November, its best month of 2023, and the 18th best-performing month of the past 73 years. And it has continued to climb in December, having risen 3.3% through Thursday’s close, according to FactSet data. 
    

    Earlier this week, options strategists warned that markets might run into trouble at 4,600 on the S&P 500. They warned that a “call wall” of open-interest in bullish contracts around that level could force market makers to put the breaks on the rally. 
    

    Instead, bullish traders blew through the call wall, pushing it higher to 4,700, said Kochuba.
    

    The S&P 500 closed at 4,719.55 on Thursday, its highest close since Jan. 12, 2022, according to FactSet data. The index is now sitting within 1.75 percentage points of its record closing high of 4,796.56 on Jan. 3, 2022. 
    

    Traders’ bullishness recently helped push the Cboe Volatility Index
    
        VIX,
    
       otherwise known as Wall Street’s “fear gauge,” to multiyear lows, according to FactSet data. 
    

    To be sure, it isn’t just S&P 500 options and contracts tied to popular stocks like Tesla Inc.
    
        TSLA,
    
        +4.91%
    
       seeing explosive volume: Calls tied to the iShares Russell 2000 ETF
    
        IWM,
    
       which tracks the small-cap Russell 2000, hit 1.35 million contracts, the third-highest ever, according to Goldman. Activity in options contracts linked to small-cap stock indexes has surged since late October. 
    

    Heavy call buying has pushed the put-call skew for S&P 500 options to its lowest level in a year, according to data from Goldman Sachs Group. 
    

    This shows that investors have been scrambling to buy bullish contracts, while largely shunning bearish ones, as stocks marched higher. Goldman analysts described Friday as “the last major liquidity event of the year” in a note to clients obtained by MarketWatch. 
    

    

              
    

    

    
        
      
    

    GOLDMAN SACHS
    

    

    

    “Triple Witching” days happen once a quarter. They are thusly named  because options tied to single stocks, ETFs and indexes will expire, alongside index-tracking futures contracts. Options-market experts say they are typically associated with more intraday swings and higher trading volume. 
    

    Making things even more interesting is the fact that the quarterly rebalancing of the S&P 500 and Nasdaq-100 is due to take effect after markets close on Friday. 
    

    Normally routine, this quarter’s rebalancing is drawing outsize attention following an extremely rare ad hoc rebalancing over the summer to rein in the influence of megacap stocks in the Nasdaq-100. 
    

    Earlier this month, Standard & Poor’s announced its rebalancing plans, which included reducing the weighting of two Magnificent Seven stocks, Apple Inc.
    
        AAPL,
    
        +0.08%
    
       and Alphabet Inc.
    
        GOOG,
    
        -0.57%
    

            GOOGL,
    
        -0.48%    .
    
       At the same time, Amazon.com Inc.
    
        AMZN,
    
        -0.95%    ,
    
       which is also part of the Mag 7, will see its weighting increased. Meanwhile, three companies will join the index, including Uber Inc.
    
        UBER,
    
        +0.86%    ,
    
       while shares of three other companies depart. 
    

    Kochuba believes Friday’s expiration could remove the last barrier holding stocks back from rocketing to record highs before the end of the year. 
    

    “After OpEx, markets will be able to move more freely,” Kochuba said. 
    

    Garrett DeSimone of OptionMetrics cautioned that investors shouldn’t place too much weight on options-market activity and other technical factors. 
    

    “At the end of the day, macro trumps everything,” he said during an interview with MarketWatch. 
    

    


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  • 
		
		
    
			
    Import prices fall for second straight month and as U.S. inflation eases
    
			
    Import prices fall for second straight month and as U.S. inflation eases
    
			
    

    

    Developing story. Check back for updates.
    

    The numbers: The cost of imported goods fell 0.4% to mark the second decline in a row, contributing to a slowdown in U.S. inflation more broadly.
    

    Economists polled by the Wall Street Journal had estimated a 0.8% drop.
    

    


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  • 
		
		
    
			
    Powell surprises with dovish turn; economists mull how many Fed rate cuts in '24
    
			
    Powell surprises with dovish turn; economists mull how many Fed rate cuts in '24
    
			
    

    

    Federal Reserve Chairman Jerome Powell startled economists with a press conference Wednesday that was viewed as much more dovish than expected.
    

    It was “12 doves a-leaping,” said Michael Feroli, U.S. economist at JPMorgan Chase.
    

    “The Fed can’t believe its luck. The data is going their way,” said Krishna Guha, vice chairman of Evercore ISI.
    

    

    The first dovish signals came in the Fed’s statement and economic forecasts at 2 p.m. Eastern. First, the Fed penciled in three rate cuts in 2024 instead of two that were projected in September. The Fed also softened its tightening bias by saying they were mulling the need for “any” more hikes.
    

    Then, half an hour later at his press conference, “Chair Powell did nothing to undo the impression of those signals,” said Feroli, in a note to clients. Powell said Fed officials were starting to discuss when to cut rates.
    

    “The question of when it will be appropriate to begin dialing back the policy restraint” was clearly “a discussion for us at out meeting today,” Powell said.  Fed officials think the Fed is “likely at or near the peak rate for this cycle.”
    

    While Powell didn’t take rate cuts “off the table,” they are “collecting dust,” said Michael Gregory, deputy chief economist at BMO Capital Markets.
    

    Markets reacted with the 10-year Treasury yield
    
        BX:TMUBMUSD10Y
    
       falling to 4.025%. 
    

    Traders in derivative markets now see an 80% chance of the first rate cut in March, and now see five quarter-point cuts next year. 
    

    Matt Luzzetti, chief U.S. economist at Deutsche Bank, said the main thing learned from Wednesday’s press conference was that Fed Gov. Chris Waller’s dovish comments a few weeks ago were a reflection of the mainstream view at the central bank, rather than a dovish outsider.
    

    In a speech late last month, Waller raised the possibility of a rate cut by spring if inflation keeps slowing.
    

    Some economists think that March is too soon for a rate cut.
    

    “We still judge rate cuts will commence later rather than sooner, still by the end of the third quarter of 2024,” Gregory of BMO Capital Markets said. 
    

    Feroli said he now sees the first rate cut in June, instead of his prior forecast of July, and predicted that the Fed will cut five times by the end of 2024.
    

    Luzzetti of Deutsche Bank sees six rate cuts next year, but not beginning until June as the economy falls into a mild recession.
    

    The Fed doesn’t forecast a recession. Its rate cuts are purely a story of weakening inflation. If there is a recession, the Fed will cut very fast, Luzzetti said.
    

    Diane Swonk, chief economist at KPMG, said the odds of a recession are lower now that the Fed has signaled it will actively take steps to try to avoid one. 
    

     The Fed wants the economy to cruise at a lower altitude, and no longer wants a landing, Swonk said in an interview.
    

    That is a 180-degree turn from Powell’s speech in Jackson Hole, Wyo., in the summer of 2022 when he spoke for less than 10 minutes but warned of “pain” and the unfortunate costs of fighting inflation. That speech, “a bucket of ice water,” Swonk said, sent the stock market reeling at the time. 
    

    

    


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  • 
		
		
    
			
    Apple braces for EU antitrust order over App Store: report
    
			
    Apple braces for EU antitrust order over App Store: report
    
			
    

    

    The European Union is about to hit Apple Inc. 
    
        AAPL,
    
        +0.75%
    
       with a ban on App Store rules that govern music-streaming rivals like Spotify Technology
    
        SPOT,
    
        -0.93%
    
       and a potential hefty fine in the regulatory body’s latest bid to thwart the power and reach of Big Tech. A Bloomberg report Wednesday said the EU’s imminent antitrust order would prohibit Apple’s practice of blocking music services from pushing their users away from the App Store to alternative subscription options. Regulators are also mulling a fine of up to 10% of Apple’s annual sales. Apple was not immediately available to comment on the report.
    

    


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  • 
		
		
    
			
    At COP28, climate negotiators agree to 'transition away' from fossil fuels
    
			
    At COP28, climate negotiators agree to 'transition away' from fossil fuels
    
			
    

    

    DUBAI, United Arab Emirates (AP) — United Nations climate negotiators directed the world on Wednesday to transition away from planet-warming fossil fuels in a move the talks chief called historic, despite critics worries about loopholes.
    

    Within minutes of opening Wednesday’ session, COP28 President Sultan al-Jaber gaveled approval of the central document – the global stocktake that says how far the world is off-track it climate-fighting goals and how it is going to get back – without asking for comments. Delegates stood and hugged each other.
    

    

    “It is a plan that is led by the science,” al-Jaber said. “It is an enhanced, balanced but make no mistake, a historic package to accelerate climate action. It is the UAE consensus.”
    

    “We have language on fossil fuel In our final agreement for the first time ever,” al-Jaber, CEO of the UAE’s oil company.
    

    The new deal had been floated early Wednesday after a global rallying cry stronger than proposed days earlier, but with loopholes that upset critics.
    

    The new proposal doesn’t go so far as to seek a “phase-out” of fossil fuels, which more than 100 nations had pleaded for. Instead, it calls for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade.”
    

    That transition would be in a way that gets the world to net zero greenhouse gas emissions in 2050 and follows the dictates of climate science. It projects a world peaking its ever-growing carbon pollution by the year 2025 to reach its agreed-upon threshold, but gives wiggle room to individual nations like China to peak later.
    

    “The world is burning, we need to act now,” said Ireland Environment Minister Eamon Ryan.
    

    Intensive sessions with all sorts of delegates went well into the small hours of Wednesday morning after the conference presidency’s initial document angered many countries by avoiding decisive calls for action on curbing warming. Then, the United Arab Emirates-led presidency presented delegates from nearly 200 nations a new central document — called the global stocktake — just after sunrise.
    

    It’s the third version presented in about two weeks and the word “oil” does not appear anywhere in the 21-page document, but “fossil fuels” appears twice.
    

    The Alliance of Small Island States said in a statement that the text “is incremental and not transformational. We see a litany of loopholes in this text that are a major concern to us.”
    

    “We needed a global signal to address fossil fuels. This is the first time in 28 years that countries are forced to deal with fossil fuels,” Center for Biological Diversity energy justice director Jean Su told The Associated Press. “So that is a general win. But the actual details in this are severely flawed.”
    

    “The problem with the text is that it still includes cavernous loopholes that allow the United States and other fossil fuel producing countries to keep going on their expansion of fossil fuels,” Su said. “There’s a pretty deadly, fatal flaw in the text, which allows for transitional fuels to continue” which is a code word for natural gas that also emits carbon pollution.
    

    

    


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  • 
		
		
    
			
    S&P 500's year-end rally lifts 51 stocks to a record close
    
			
    S&P 500's year-end rally lifts 51 stocks to a record close
    
			
    

    

    It has been a record day for 10% of the S&P 500.
    

    A group of 51 stocks in the benchmark equity index swept to record finishes on Tuesday, the most since April 20, 2022, according to a tally from Dow Jones Market Data.
    

    

    

              
    

    

    

    It was a record day for 51 stocks in the S&P 500.
    

          
    
            Dow Jones Market Data
    
          
    
  
    

    

    Stocks that logged a record close on Tuesday included Allstate Corp
    
        ALL,
    
        +0.90%    ,
    
       Costco Wholesale
    
        COST,
    
        +0.90%    ,
    
       D.R. Horton, Inc.
    
        DHI,
    
        +0.65%    ,
    
       Mastercard
    
        MA,
    
        +1.21%    ,
    
       T-Mobile US Inc.,
    
        TMUS,
    
        +1.00%
    
       Visa Inc.
    
        V,
    
        +1.19%
    
       and Waste Management Inc.,
    
        WM,
    
        +1.85%
    
       among others.
    

    Equities have been in a year-end rally mode, driven higher by tumbling benchmark yields that finance much of the U.S. economy and expectations of coming interest-rate cuts.
    

    The 10-year Treasury rate
    
        BX:TMUBMUSD10Y
    
       fell to 4.2% on Tuesday from a high of about 5% in October.
    

    The Dow Jones Industrial Average
    
        DJIA
    
       on Tuesday ended at its third-highest level on record, while the S&P 500 index
    
        SPX
    
       and Nasdaq Composite Index
    
        COMP
    
       added to a string of new closing highs for 2023. The Dow finished 0.6% away from its record close logged almost two years ago, while the S&P 500 was only 3.2% below its close from the same period, according to Dow Jones Market Data.
    

    The push higher for stocks followed inflation data for November that showed price pressures continued to ease from peak levels, but still were above the Fed’s 2% annual target.
    

    The consumer-price index pegged the annual rate of inflation at 3.1%, down from 3.2% in October, with the “last mile” of inflation expected to be the hardest part to tame.
    

    Investors now will be focused on Wednesday’s Federal Reserve decision. Short-term interest rates are expected to remain unchanged at a 22-year high, but the central bank is expected to update its “dot plot” forecast of rates over a longer time horizon.
    

    “Although the market will focus on the timing of rate cuts, we suspect Chair Powell will be keen to strike notes of caution to avoid financial conditions easing too much further to ensure the Fed continues to see encouraging progress on inflation,” said Emin Hajiyev, senior economist at Insight Investment, in emailed comments. 
    

    

    


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  • 
		
		
    
			
    U.S. stocks open mixed as investors weigh fresh data on inflation
    
			
    U.S. stocks open mixed as investors weigh fresh data on inflation
    
			
    

    

    U.S. stocks opened mixed on Tuesday as investors weighed a reading on inflation that was largely in line with economists’ forecasts. The Dow Jones Industrial Average
    
        DJIA,
    
        +0.35%
    
       was up less than 0.1% soon after the opening bell, while the S&P 500
    
        SPX,
    
        +0.07%
    
       slipped 0.2% and the Nasdaq Composite
    
        COMP,
    
        +0.07%
    
       fell 0.1%, according to FactSet data, at last check. The Bureau of Labor Statistics said Tuesday that inflation, as measured by the consumer-price index, rose 0.1% in November for a year-over-year rate of 3.1%. Economists polled by the Wall Street Journal had forecast that inflation would be unchanged in November while rising at an annual pace of 3.1%. So-called core inflation, which excludes energy and food prices, climbed 0.3% last month to increase 4% in the 12 months through November. That was in line with economists’ expectations. In the bond market, the yield on the 10-year Treasury note
    
        TMUBMUSD10Y,
    
        4.234%
    
       was up one basis point at around 4.24%, according to FactSet data, at last check.
    

    


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  • 
		
		
    
			
    Nokia Cuts Operating Margin Guidance Amid Challenging Market
    
			
    Nokia Cuts Operating Margin Guidance Amid Challenging Market
    
			
    

    

    By Dominic Chopping
    

    Nokia cut its operating margin guidance as market conditions in its mobile networks business remain challenging, with operator spending falling and a normalization in India after a period of rapid 5G deployment.
    

    The Finnish telecom equipment maker said Tuesday that it now targets a comparable operating margin target of at least 13% by 2026, from at least 14% previously.
    

    

    “Nokia still sees a path to achieving the at least 14% comparable operating margin target but considering the current market conditions in mobile networks, this is deemed a prudent change,” the company said.
    

    Write to Dominic Chopping at dominic.chopping@wsj.com
    

    

    


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  • 
		
		
    
			
    Hasbro to lay off more workers amid toy sales slump
    
			
    Hasbro to lay off more workers amid toy sales slump
    
			
    

    

    Hasbro Inc. is cutting about 900 jobs as the company is facing a slump in toy and game sales after a boom during the pandemic.  
    

    The cost-saving plan will result in “the reallocation of people and resources,” including early retirement for some employees and layoffs over the next two years, Hasbro
    
        HAS,
    
        +0.39%
    
       said in a filing late Monday.
    

    

    The Wall Street Journal reported the layoff plans earlier Monday, citing a memo it had viewed.
    

    The maker of My Little Pony and Monopoly launched the plan in January, and at the time announced the layoffs of about 15% of its workforce. 
    

    It has booked about $94 million in expenses related to severance, stock compensation and employee benefits, and expects to book an additional $40 million, the company said in the filing Monday. 
    

    Hasbro in October missed third-quarter earnings expectations and slashed its full-year outlook, citing a “softer toy outlook.” 
    

    Shares of Hasbro and rival Mattel Inc.
    
        MAT,
    
        +0.05%
    
       fell about 4% and 3%, respectively, in the extended session Monday, as the Wall Street Journal report also cited “early data points to another weak year” for the toy industry following the a boom during the pandemic.
    

    Mattel in October reported a better-than-expected third quarter, thanks in part to its wildly successful Barbie movie. 
    

    Shares of Mattel have gained 6% this year, which contrasts with a 20% drop for Hasbro stock. Both stocks, however, have underperformed in relation to the S&P 500 index
    
        SPX,
    
       which is up about 20% in 2023. 
    

    In a February filing, Hasbro said it had about 6,500 employees worldwide as of the end of 2022. 
    

    

    


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  • 
		
		
    
			
    U.S. stocks open mostly lower as investors look ahead to inflation data, Fed policy meeting
    
			
    U.S. stocks open mostly lower as investors look ahead to inflation data, Fed policy meeting
    
			
    

    

    U.S. stocks opened mostly lower on Monday, after six straight weeks of gains, as investors look ahead to inflation data and the Federal Reserve’s policy meeting this week. The Dow Jones Industrial Average
    
        DJIA,
    
        +0.17%
    
       was up 0.2% soon after the opening bell, while the S&P 500
    
        SPX,
    
        +0.03%
    
       shed 0.1% and the Nasdaq Composite
    
        COMP,
    
        -0.27%
    
       fell 0.4%, according to FactSet data, at last check. A reading on November inflation, as measured by the consumer-price index, will be released on Tuesday. The following day, the Fed will release a statement on its monetary policy, after concluding its two-day meeting. Last week, all three major U.S. stock benchmarks closed at their highest levels of the year, with the S&P 500 finishing Friday at its highest value since March 29, 2022.
    

    


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