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Tag: Motor Vehicle Parts

  • Mobileye Shocks With Lower Guidance. Blame Tesla.

    Mobileye Shocks With Lower Guidance. Blame Tesla.

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    Self-driving-technology company


    Mobileye Global


    reported a disappointing quarter, and cut full-year financial guidance. The electric-vehicle price war, being led by


    Tesla


    is the main reason.



    Mobileye


    stock (ticker: MBLY) is down significantly in Thursday trading, falling more than 23%. The


    S&P 500


    and


    Nasdaq Composite


    are up about 0.6% and 0.9%, respectively.

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  • GM Raises 2023 Profit Outlook, Kills Off Chevy Bolt EV

    GM Raises 2023 Profit Outlook, Kills Off Chevy Bolt EV

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  • The commodity supercycle is still young, these strategists say. Here’s why.

    The commodity supercycle is still young, these strategists say. Here’s why.

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    Be careful what you wish for. U.S. job openings dropped below 10 million, a symbolic sign that the Federal Reserve’s efforts to combat inflation by sapping labor-market demand was working — and U.S. stocks promptly fell. Perhaps the bigger issue is that investors were not willing to push stocks out of the 3,800 to 4,200 range the S&P 500
    SPX,
    -0.48%
    has been trading in for months.

    It might not be the most obvious time to be discussing a commodity supercycle, with recession talk growing, but then that’s what makes this call more interesting. Strategists at Wells Fargo investment Institute argue it’s year three of a commodity supercycle, which they say has plenty more room to run.

    John LaForge, head of real asset strategy, and Mason Mendez, investment strategy analyst, say commodities are like black holes, in that escaping the gravity of a supercycle is difficult for any individual commodity. They point to this chart, looking at commodity momentum since 1800, plotted in 10-year moving averages, which shows that food, energy and the commodity complex as a whole tend to follow each other around.

    Right now nearly all the signs, both technical and fundamental, point to a commodity bull market, they say. The early signs are mostly shifting prices and technical indicators, and the latter signs are more fundamental in nature, like restrained supplies. “The bottom line is that the key early technical indicators are confirming to us that a new supercycle likely began in 2020.”

    The analysts went further into depth on what they call washed-out sentiment. They say the process goes something like this: near the end of a commodity bull supercycle, prices go so high that oversupplies become rampant and need to be worked off, which results in investment stopping to flow into production. They say that in both corn
    C00,
    +0.80%
    and gold
    GC00,
    -0.17%
    — not commodities with much in common — supply growth rates have turned negative in recent years. Both showed similar conditions at the start of the last supercycle, in 1999.

    They advise using commodities as portfolio diversifiers, which certainly would have helped last year, when both stocks and bonds fell but the Bloomberg commodity index rose nearly 16%. They highlight commodity prices typically move differently than stocks or bonds over the long run. And they say that supercycles have historically lasted a decade or longer, and the shortest commodity bull market on record was nine years.

    One caveat: the speed of technology advances. Sometimes technology can help fuel demand, but conversely, to the extent technology can make commodities easier to extract, it can also buoy supplies. The obvious example here, not pointed out in the note, is the shale-oil revolution. There’s an interesting article in The Economist (subscription required), how copper has yet to be the beneficiary of a technology boost.

    The market

    U.S. stock futures
    ES00,
    -0.36%

    NQ00,
    -1.08%
    edged lower. Oil prices
    CL.1,
    -0.62%
    fell but held over $80 per barrel. The yield on the 10-year Treasury
    TMUBMUSD10Y,
    3.295%
    turned lower after the latest jobs data.

    For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.

    The buzz

    ADP reported a slowdown in private-payrolls growth to 145,000 jobs in March, as well as a slowing pace of pay growth. Shortly after the open comes the the Institute for Supply Management’s services index. Cleveland Fed President Loretta Mester said interest rates would need to be increased “somewhat” from here.

    Overseas, New Zealand’s central bank made a larger-than-expected 50 basis point rate hike, while a joint forecast of Germany’s leading institutes upgraded its view on the eurozone’s largest economy, now expecting a 0.3% advance.

    Walmart
    WMT,
    +1.33%
    forecast earnings in a range of $5.90 to $6.05 per share for its fiscal year, below the FactSet-compiled analyst estimate of $6.11.

    Johnson & Johnson
    JNJ,
    +3.44%
    proposed to pay up to $8.9 billion over 25 years to settle claims connected with cosmetic-talc litigation.

    Alphabet’s
    GOOGL,
    -0.63%
    Google says its chips are faster and more power efficient than comparable chips from Nvidia
    NVDA,
    -3.41%    .

    Western Alliance Bancorp
    WAL,
    -16.47%
    shares fell in premarket trade after the regional lender detailed the latest losses in its portfolio of loans and securities.

    Brandon Johnson was elected mayor of Chicago, the country’s third-largest city. Former President Donald Trump was defiant in a speech to supporters after his indictment.

    Best of the web

    A popular Fed program is draining funds from the banking system.

    Instant videos could be the next leap in artificial-intelligence technology.

    OpenAI, the tech company backed by Microsoft
    MSFT,
    -1.14%    ,
    is facing what is believed to be its first defamation lawsuit over a claim by its ChatGPT chatbot that an Australian mayor served time in prison for bribery.

    Top tickers

    These were the most active stock-market tickers as of 6 a.m. Eastern.

    Ticker

    		 Security name
    TSLA,
    -3.01%         		Tesla
    AMC,
    +2.04%         		AMC Entertainment
    BBBY,
    -5.09%         		Bed Bath & Beyond
    GME,
    -3.44%         		GameStop
    BUD,
    +0.34%         		Anheuser-Busch InBev
    APE,
    -0.89%         		AMC Entertainment preferreds
    MULN,
    -4.85%         		Mullen Automotive
    NIO,
    -4.18%         		Nio
    AAPL,
    -1.13%         		Apple
    AI,
    -14.35%         		C3.ai
    The chart

    Sure, higher gasoline prices naturally drive demand for electric vehicles. But at what point do high electricity prices make it more cost-effective to buy old gas guzzlers? This chart from Barclays breaks it down — roughly, 10 cents per kilowatt hour equates to $1 per gallon. Right now it’s cheaper to fill a car at the pump than recharge at peak hours.

    Random reads

    Easter means the annual production of a 15,000-egg omelette.

    This man was successful in his marriage proposal, at the cost of a one-year ban from Dodger Stadium.

    Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

    Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton.

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  • Dow rises more than 300 points after inflation report as Nasdaq heads for best quarter since 2020

    Dow rises more than 300 points after inflation report as Nasdaq heads for best quarter since 2020

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    U.S. stocks were climbing Friday afternoon following a softer-than-expected inflation report for February, while the Nasdaq Composite was on pace for its largest quarterly advance since 2020.

    How stocks are trading
    • The Dow Jones Industrial Average
      DJIA,
      +1.26%
      rose 340 points, or 1%, to 33,199.

    • The S&P 500
      SPX,
      +1.44%
      gained almost 47 points, or 1.2%, to nearly 4,098.

    • The Nasdaq Composite
      COMP,
      +1.74%
      advanced almost 173 points, or 1.4%, to 12,186.

    For the week, the Dow is on track to gain 3% while the S&P was on pace to rise 3.2% and the Nasdaq Composite was heading for a 3.1% increase, according to FactSet data, at last check.

    What’s driving markets

    U.S. stocks were up sharply Friday afternoon as investors weighed data showing signs of moderating inflation.

    “Core price pressures” eased in February, Barclays said in an economics research note Friday. “On balance, the easing in February PCE inflation was fairly broad-based across goods and services, barring housing.”

    The personal-consumption-expenditures, or PCE, price index increased 0.3% in February, with inflation slowing to 5% year over year from 5.3% in January, according to a report Friday from the Bureau of Economic Analysis.

    Core PCE, the Federal Reserve’s preferred inflation gauge that excludes energy and food prices, rose 0.3% last month for a year-over-year rate of 4.6%. That’s slightly lower than forecasts from economists polled by the Wall Street Journal and softened from the 4.7% increase seen over the 12 months through January.

    Read: Inflation softens in February, PCE finds, and gives ammo for Fed rate-hike pause

    While the Federal Reserve has been battling high inflation with interest rate hikes, futures traders are betting that rates have already peaked and that the Fed will likely reverse course and cut rates at least a couple of times before the end of the year, according to the CME’s FedWatch tool.

    The market is pricing in a “coin flip” as to whether the Fed raises its benchmark rate by a quarter percentage point at its May policy meeting, said Matt Stucky, senior portfolio manager at Northwestern Mutual Wealth Management Co., in a phone interview Friday.

    “We think we’re getting pretty close to the end” of the rate-hiking cycle, he said. Stucky expects the Fed may stop hiking once “cracks” start to form in the labor market, with job losses in “nonfarm payrolls.”

    Meanwhile, consumer spending edged up 0.2% in February while personal incomes rose 0.3%, according to a Bureau of Economic Analysis report Friday.

    “Incomes and spending are hanging in there and inflation’s cooling,” said Mike Skordeles, head of U.S. economics at Truist, in a phone interview Friday. “That has positive implications for markets” and the economy, he said.

    Stocks traded higher following the release of the final reading on U.S. consumer sentiment for March from the University of Michigan. While confidence ticked lower compared with earlier estimates, inflation expectations moderated.

    U.S. stocks have held up relatively well this quarter, shrugging off the Fed rate hikes and renewed recession fears. Since hitting its highest level of the year in early February, the S&P 500 has been trading in an increasingly narrow range, leaving analysts divided about where the market might be heading next.

    “We need to see what the overall economy does,” said Kim Caughey Forrest, founder and chief investment officer of Bokeh Capital Partners. “I think GDP matters, and if GDP holds up while inflation comes down, that could be good for stocks.”

    The Nasdaq Composite has risen around 16% since the start of the year, putting it on track for its best quarterly gain since the three months through June 2020, according to FactSet data, at last check. The technology -heavy Nasdaq jumped more than 30% in the second quarter of 2020 as stocks rebounded from the global market rout tied to COVID-19 that year.

    The S&P 500 and Dow were also track for quarterly gains in late afternoon trading.

    “The bond market is definitely more concerned about recession risks than stocks are,” said Skordeles, who is expecting a recession in the second half of the year. “They couldn’t be sending more different signals.”

    Read: Two-year Treasury yields on pace for biggest monthly drop since 2008 after bank turmoil

    New York Fed President John Williams said Friday in a speech at Housatonic Community College that stress in the U.S banking system will cause banks to tighten credit and probably lead to lower consumer spending.

    Companies in focus

    —Steve Goldstein contributed to this article.

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  • These 20 stocks led the January rally

    These 20 stocks led the January rally

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    The initial version of this story had incorrect price changes for 2023. It is now updated with information as of the market close on Jan. 31.

    Investors staged a January rally, with solid gains for the S&P 500 and an even better showing for technology stocks that led the dismal downward action in 2022.

    This…

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  • 6 cheap stocks that famed value-fund manager Bill Nygren says can help you beat the market

    6 cheap stocks that famed value-fund manager Bill Nygren says can help you beat the market

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    These are tricky times in the stock market, so it pays to look to the best stock-fund managers for guidance on how to behave now. Veteran value investor Bill Nygren belongs in this camp, because the Oakmark Fund OAKMX he co-manages consistently and substantially outperforms its peers. 

    That isn’t easy, considering how many fund managers fail to do so. Nygren’s fund beats its Morningstar large-cap value index and category by more than four percentage points annualized over the past three years. It also outperforms at five and…

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  • Earnings Watch: Microsoft, Tesla and Intel are about to face the doubters

    Earnings Watch: Microsoft, Tesla and Intel are about to face the doubters

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    After one of the worst years in Wall Street’s history, investors have some serious questions for companies. As holiday returns roll in — and with them, forecasts for the months or year ahead — many have the chance to answer those questions, or avoid them.

    In the busiest week of the holiday-earnings season so far, three big names will take the stage on back-to-back-to-back afternoons. Here is what to expect:

    Microsoft Corp.

    Microsoft
    MSFT,
    +3.57%
    shed $737 billion in market value last year, the third-most of any S&P 500 company, then announced plans to lay off some 10,000 workers this month. Previously a Wall Street darling thanks to the phenomenal growth of its Azure cloud-computing offering, Microsoft now faces a cutback in enterprise spending on cloud and other products, as companies seek to cut their bills after spending wantonly during the early years of the COVID-19 pandemic.

    First Take: Big Tech layoffs are not as big as they appear at first glance

    When the company announced layoffs, Chief Executive Satya Nadella admitted customers were cutting, saying “as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.” Analysts believe Azure may be holding up better than rivals, however, and will expect to hear about it when Microsoft results hit Tuesday afternoon.

    “Our Azure checks were mixed, but generally better than public cloud sentiment that has turned highly negative over the past few months,” Mizuho analysts wrote. “More specifically, we have heard of increasing levels of optimization, but it is being partially offset by many organizations prioritizing digital transformation.”

    From October: The cloud boom has hit its stormiest moment yet, and it is costing investors billions

    As cloud growth slows down, expect Microsoft to point to the next big buzzword in tech: Artificial intelligence, specifically ChatGPT, the chatbot product developed by OpenAI, which Microsoft has invested heavily in and expects to incorporate into its products. D.A. Davidson analyst Gil Luria this month wrote that Microsoft’s investments in OpenAI would help it build out more AI technology, including in its search engine Bing.

    Tesla Inc.

    Tesla
    TSLA,
    +4.91%
    stock suffered a much larger percentage decline than Microsoft in 2022,as the electric-vehicle maker’s shares closed out their worst year on record with their worst quarter and month ever. After the year ended, Tesla began slashing prices in China and the U.S. in hopes of qualifying for more consumer tax incentives and reinvigorating demand, which could lead to questions about previously fat margins.

    In-depth: Tesla investors await clues on demand, board actions and weigh downside risks in 2023

    For Tesla, which reports fourth-quarter results Wednesday, the results will offer more context on production of the Cybertruck — currently set to start in the middle of the year — demand in China, competition and the impact of price cuts. Auto-information website Edmunds on Thursday said that Tesla’s decision to slash prices by as much as 20% in the U.S. and Europe led to a jump in interest in the vehicles.

    While those cuts seem likely to hurt profit, Deutsche Bank analyst Emmanuel Rosner called it “a bold offensive move, which secures Tesla’s volume growth, puts its traditional and EV competitors in great difficulty, and showcases Tesla’s considerable pricing power and cost superiority.” And a survey from Wedbush analysts found that “76% of EV Chinese consumers are considering buying a Tesla in 2023.” But Toni Sacconaghi, an analyst at Bernstein, said Tesla needed more low-cost electric-vehicle offerings, which might not ship until 2025.

    Tesla earnings preview: Price cuts in focus as stock hovers around 2-year low

    With Tesla’s stock in the gutter, some analysts have raised the possibility of a share buyback to spur investor interest, and Chief Executive Elon Musk said such a plan was being discussed in the previous earnings call. Musk is not in great favor with many investors right now, however, following some heavy selling of Tesla shares in the wake of his purchase last year of Twitter, which some on Wall Street have said has distracted him from the needs of the auto maker. Musk’s tweets have landed him in trouble elsewhere: Opening arguments began last week for a trial centered on allegations that Musk put investors at risk when he tweeted in 2018 that he was “considering” taking Tesla private and had secured the money to do so.

    ‘He broke the stock’: Why a prominent Tesla investor wants Elon Musk to put him on the board

    Intel Corp.

    Intel’s
    INTC,
    +2.81%
    questions were not fresh in 2022, as the chip maker for years has seen rivals like Advanced Micro Devices Inc.
    AMD,
    +3.49%
    and Nvidia Corp.
    NVDA,
    +6.41%
    challenge it in ways that would have been unthinkable in previous generations. Shares still dove more than 43% last year, as declining sales led to plans for $3 billion in cost cuts.

    There’s little hope for a big rebound when Intel reports Thursday afternoon. Personal-computer sales have experienced their biggest year-over-year declines ever recorded, and Intel’s long-delayed new data-center offering that is meant to answer AMD’s challenge only began selling this year.

    Opinion: The PC boom and bust is already ‘one for the record books,’ and it isn’t over

    Intel CEO Pat Gelsinger, though, has a chance to lay out his vision for a long-term Intel rebound, as he attempts to make Intel a chip-manufacturing powerhouse again after years of struggles. He was forced to trim his annual outlook multiple times last year, so it will be important for him to provide attainable numbers this time, but without reducing hopes in the path forward.

    This week in earnings

    Expectations remain low for fourth-quarter earnings season overall, with consumers squeezed by higher prices and interest rates, and hopes fading for any relief from the holiday shopping season. But even with a low bar, the fourth-quarter results from companies so far have been worse than the historical norm, with FactSet senior earnings analyst John Butters writing Friday that “the fourth-quarter earnings season for the S&P 500 is not off to a strong start.”

    So far, 11% of S&P 500 companies have reported fourth-quarter results, with roughly one-third reporting earnings better than estimates, Butters reported. That’s lower than the 10-year average of 73%.

    Still, Wall Street generally expects strong profit margins for companies in the S&P 500, as earlier price increases — which help businesses offset their own costs and test the limits of consumer demand — mix with more recent cost cuts.

    For the week ahead, 93 companies in the S&P 500 index
    SPX,
    +1.89%    ,
    and 12 of the 30 Dow Jones Industrial Average
    DJIA,
    +1.00%
    components, are set to report quarterly results.

    Mark your calendars! Here is MarketWatch’s full earnings calendar for the week

    Among the highlights: General Electric Co.
    GE,
    +1.07%
    reports Tuesday for the first time since splitting off its GE HealthCare Technologies
    GEHC,
    +4.43%
    business. 3M Co.
    MMM,
    +1.87%
    — which makes Post-it Notes, duct tape, air filters, adhesives and coatings — also reports Tuesday, after the company in October said the costs of raw materials, a big driver of inflation, were showing signs of easing.

    And as demand for goods eases amid worries about a downturn, a number of railroad operators that ship those goods report during the week. Union Pacific Corp.
    UNP,
    +1.54%    ,
    whose lines ship across the Western half of the U.S., reports on Tuesday, while CSX Corp.
    CSX,
    +1.46%    ,
    which covers much of the East, reports Wednesday. Norfolk Southern Corp.
    NSC,
    +1.51%
    also reports Wednesday.

    Telecom giants Verizon Communications Inc.
    VZ,
    -0.15%    ,
    AT&T Inc.
    T,
    +1.53%
    and Comcast Corp.
    CMCSA,
    +3.22%
    report Tuesday, Wednesday and Thursday, respectively. Results there will offer a clearer sense of the state of demand for Apple Inc.’s
    AAPL,
    +1.92%
    iPhones, as premium models suffer from production snags, and for broadband, which saw heightened demand when more people were staying home due to the pandemic.

    The call to put on your calendar

    Southwest, post-meltdown: Southwest Airlines Co.
    LUV,
    +1.67%    ,
    which reports on Thursday, will offer executives with plenty to answer for, after bad weather and an overloaded, aging scheduling system caused thousands of flight cancellations over the holidays.

    For more: Southwest Airlines turns to repairing its reputation after holiday meltdown

    The implosion has raised questions about the air carrier’s investments in its own technology — after restarting dividend payments shortly before the disruptions — and airlines’ ability to handle the post-lockdown travel rebound. The breakdown has underscored the airline industry’s bigger issues with understaffing, after 2020’s wave of departures, as carriers try to reload flight schedules to meet pent-up travel demand.

    Scott Kirby, chief executive at United Airlines Holdings Inc.
    UAL,
    +2.25%    ,
    said during his company’s earnings call last week that he felt the industry’s goals to expand their flight coverage this year and beyond were “simply unachievable.” And he said that airlines that tried to follow prepandemic patterns were destined to face trouble. He said manufacturers were suffering from delays in building jets, engines and other parts, and that airlines had outgrown their technology infrastructure.

    For more: United Airlines swings to profit despite ‘worst’ winter storm’

    “All of us, airlines and the FAA, lost experienced employees and most didn’t invest in the future,” he said. “That means the system simply can’t handle the volume today, much less the anticipated growth.”

    American Airlines Group Inc.
    AAL,
    +0.37%    ,
    Alaska Air Group Inc.
    ALK,
    +0.85%
    and JetBlue Airways Corp.
    JBLU,
    +0.94%
    are also expected to report results Thursday morning, along with Southwest.

    The numbers to watch

    Visa, Mastercard and consumer spending: The return of travel and entertainment, along with rising prices, have helped prop up consumer spending. But as Visa Inc.
    V,
    +1.77%    ,
    Mastercard Inc.
    MA,
    +2.27%    ,
    American Express Co.
    AXP,
    +3.23%
    and Capital One Financial Corp.
    COF,
    +6.40%
    prepare to report, their finance-industry counterparts are getting nervous — and taking more steps to pad themselves against the fallout from consumers struggling to pay their bills.

    Credit-card issuer Capital One reports results on Tuesday, while card payments-network providers Visa and Mastercard report on Thursday, with Amex on Friday morning. They’ll report after shares of Discover Financial Services
    DFS,
    +4.16%
    got hit last week after the company, which also offers credit cards and loans, set aside more money to cover souring credit, and reported a bump in its net charge-off rate — a measure of debt a company thinks is unlikely to be recovered.

    Larger banks, like JPMorgan Chase & Co.
    JPM,
    +0.24%    ,
    have also set aside more money to guard against credit losses.

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  • Earnings Watch: Microsoft, Tesla and Intel are about to face the doubters

    Earnings Watch: Microsoft, Tesla and Intel are about to face the doubters

    [ad_1]

    After one of the worst years in Wall Street’s history, investors have some serious questions for companies. As holiday returns roll in — and with them, forecasts for the months or year ahead — many have the chance to answer those questions, or avoid them.

    In the busiest week of the holiday-earnings season so far, three big names will take the stage on back-to-back-to-back afternoons. Here is what to expect:

    Microsoft Corp.

    Microsoft
    MSFT,
    +3.57%
    shed $737 billion in market value last year, the third-most of any S&P 500 company, then announced plans to lay off some 10,000 workers this month. Previously a Wall Street darling thanks to the phenomenal growth of its Azure cloud-computing offering, Microsoft now faces a cutback in enterprise spending on cloud and other products, as companies seek to cut their bills after spending wantonly during the early years of the COVID-19 pandemic.

    First Take: Big Tech layoffs are not as big as they appear at first glance

    When the company announced layoffs, Chief Executive Satya Nadella admitted customers were cutting, saying “as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.” Analysts believe Azure may be holding up better than rivals, however, and will expect to hear about it when Microsoft results hit Tuesday afternoon.

    “Our Azure checks were mixed, but generally better than public cloud sentiment that has turned highly negative over the past few months,” Mizuho analysts wrote. “More specifically, we have heard of increasing levels of optimization, but it is being partially offset by many organizations prioritizing digital transformation.”

    From October: The cloud boom has hit its stormiest moment yet, and it is costing investors billions

    As cloud growth slows down, expect Microsoft to point to the next big buzzword in tech: Artificial intelligence, specifically ChatGPT, the chatbot product developed by OpenAI, which Microsoft has invested heavily in and expects to incorporate into its products. D.A. Davidson analyst Gil Luria this month wrote that Microsoft’s investments in OpenAI would help it build out more AI technology, including in its search engine Bing.

    Tesla Inc.

    Tesla
    TSLA,
    +4.91%
    stock suffered a much larger percentage decline than Microsoft in 2022,as the electric-vehicle maker’s shares closed out their worst year on record with their worst quarter and month ever. After the year ended, Tesla began slashing prices in China and the U.S. in hopes of qualifying for more consumer tax incentives and reinvigorating demand, which could lead to questions about previously fat margins.

    In-depth: Tesla investors await clues on demand, board actions and weigh downside risks in 2023

    For Tesla, which reports fourth-quarter results Wednesday, the results will offer more context on production of the Cybertruck — currently set to start in the middle of the year — demand in China, competition and the impact of price cuts. Auto-information website Edmunds on Thursday said that Tesla’s decision to slash prices by as much as 20% in the U.S. and Europe led to a jump in interest in the vehicles.

    While those cuts seem likely to hurt profit, Deutsche Bank analyst Emmanuel Rosner called it “a bold offensive move, which secures Tesla’s volume growth, puts its traditional and EV competitors in great difficulty, and showcases Tesla’s considerable pricing power and cost superiority.” And a survey from Wedbush analysts found that “76% of EV Chinese consumers are considering buying a Tesla in 2023.” But Toni Sacconaghi, an analyst at Bernstein, said Tesla needed more low-cost electric-vehicle offerings, which might not ship until 2025.

    Tesla earnings preview: Price cuts in focus as stock hovers around 2-year low

    With Tesla’s stock in the gutter, some analysts have raised the possibility of a share buyback to spur investor interest, and Chief Executive Elon Musk said such a plan was being discussed in the previous earnings call. Musk is not in great favor with many investors right now, however, following some heavy selling of Tesla shares in the wake of his purchase last year of Twitter, which some on Wall Street have said has distracted him from the needs of the auto maker. Musk’s tweets have landed him in trouble elsewhere: Opening arguments began last week for a trial centered on allegations that Musk put investors at risk when he tweeted in 2018 that he was “considering” taking Tesla private and had secured the money to do so.

    ‘He broke the stock’: Why a prominent Tesla investor wants Elon Musk to put him on the board

    Intel Corp.

    Intel’s
    INTC,
    +2.81%
    questions were not fresh in 2022, as the chip maker for years has seen rivals like Advanced Micro Devices Inc.
    AMD,
    +3.49%
    and Nvidia Corp.
    NVDA,
    +6.41%
    challenge it in ways that would have been unthinkable in previous generations. Shares still dove more than 43% last year, as declining sales led to plans for $3 billion in cost cuts.

    There’s little hope for a big rebound when Intel reports Thursday afternoon. Personal-computer sales have experienced their biggest year-over-year declines ever recorded, and Intel’s long-delayed new data-center offering that is meant to answer AMD’s challenge only began selling this year.

    Opinion: The PC boom and bust is already ‘one for the record books,’ and it isn’t over

    Intel CEO Pat Gelsinger, though, has a chance to lay out his vision for a long-term Intel rebound, as he attempts to make Intel a chip-manufacturing powerhouse again after years of struggles. He was forced to trim his annual outlook multiple times last year, so it will be important for him to provide attainable numbers this time, but without reducing hopes in the path forward.

    This week in earnings

    Expectations remain low for fourth-quarter earnings season overall, with consumers squeezed by higher prices and interest rates, and hopes fading for any relief from the holiday shopping season. But even with a low bar, the fourth-quarter results from companies so far have been worse than the historical norm, with FactSet senior earnings analyst John Butters writing Friday that “the fourth-quarter earnings season for the S&P 500 is not off to a strong start.”

    So far, 11% of S&P 500 companies have reported fourth-quarter results, with roughly one-third reporting earnings better than estimates, Butters reported. That’s lower than the 10-year average of 73%.

    Still, Wall Street generally expects strong profit margins for companies in the S&P 500, as earlier price increases — which help businesses offset their own costs and test the limits of consumer demand — mix with more recent cost cuts.

    For the week ahead, 93 companies in the S&P 500 index
    SPX,
    +1.89%    ,
    and 12 of the 30 Dow Jones Industrial Average
    DJIA,
    +1.00%
    components, are set to report quarterly results.

    Mark your calendars! Here is MarketWatch’s full earnings calendar for the week

    Among the highlights: General Electric Co.
    GE,
    +1.07%
    reports Tuesday for the first time since splitting off its GE HealthCare Technologies
    GEHC,
    +4.43%
    business. 3M Co.
    MMM,
    +1.87%
    — which makes Post-it Notes, duct tape, air filters, adhesives and coatings — also reports Tuesday, after the company in October said the costs of raw materials, a big driver of inflation, were showing signs of easing.

    And as demand for goods eases amid worries about a downturn, a number of railroad operators that ship those goods report during the week. Union Pacific Corp.
    UNP,
    +1.54%    ,
    whose lines ship across the Western half of the U.S., reports on Tuesday, while CSX Corp.
    CSX,
    +1.46%    ,
    which covers much of the East, reports Wednesday. Norfolk Southern Corp.
    NSC,
    +1.51%
    also reports Wednesday.

    Telecom giants Verizon Communications Inc.
    VZ,
    -0.15%    ,
    AT&T Inc.
    T,
    +1.53%
    and Comcast Corp.
    CMCSA,
    +3.22%
    report Tuesday, Wednesday and Thursday, respectively. Results there will offer a clearer sense of the state of demand for Apple Inc.’s
    AAPL,
    +1.92%
    iPhones, as premium models suffer from production snags, and for broadband, which saw heightened demand when more people were staying home due to the pandemic.

    The call to put on your calendar

    Southwest, post-meltdown: Southwest Airlines Co.
    LUV,
    +1.67%    ,
    which reports on Thursday, will offer executives with plenty to answer for, after bad weather and an overloaded, aging scheduling system caused thousands of flight cancellations over the holidays.

    For more: Southwest Airlines turns to repairing its reputation after holiday meltdown

    The implosion has raised questions about the air carrier’s investments in its own technology — after restarting dividend payments shortly before the disruptions — and airlines’ ability to handle the post-lockdown travel rebound. The breakdown has underscored the airline industry’s bigger issues with understaffing, after 2020’s wave of departures, as carriers try to reload flight schedules to meet pent-up travel demand.

    Scott Kirby, chief executive at United Airlines Holdings Inc.
    UAL,
    +2.25%    ,
    said during his company’s earnings call last week that he felt the industry’s goals to expand their flight coverage this year and beyond were “simply unachievable.” And he said that airlines that tried to follow prepandemic patterns were destined to face trouble. He said manufacturers were suffering from delays in building jets, engines and other parts, and that airlines had outgrown their technology infrastructure.

    For more: United Airlines swings to profit despite ‘worst’ winter storm’

    “All of us, airlines and the FAA, lost experienced employees and most didn’t invest in the future,” he said. “That means the system simply can’t handle the volume today, much less the anticipated growth.”

    American Airlines Group Inc.
    AAL,
    +0.37%    ,
    Alaska Air Group Inc.
    ALK,
    +0.85%
    and JetBlue Airways Corp.
    JBLU,
    +0.94%
    are also expected to report results Thursday morning, along with Southwest.

    The numbers to watch

    Visa, Mastercard and consumer spending: The return of travel and entertainment, along with rising prices, have helped prop up consumer spending. But as Visa Inc.
    V,
    +1.77%    ,
    Mastercard Inc.
    MA,
    +2.27%    ,
    American Express Co.
    AXP,
    +3.23%
    and Capital One Financial Corp.
    COF,
    +6.40%
    prepare to report, their finance-industry counterparts are getting nervous — and taking more steps to pad themselves against the fallout from consumers struggling to pay their bills.

    Credit-card issuer Capital One reports results on Tuesday, while card payments-network providers Visa and Mastercard report on Thursday, with Amex on Friday morning. They’ll report after shares of Discover Financial Services
    DFS,
    +4.16%
    got hit last week after the company, which also offers credit cards and loans, set aside more money to cover souring credit, and reported a bump in its net charge-off rate — a measure of debt a company thinks is unlikely to be recovered.

    Larger banks, like JPMorgan Chase & Co.
    JPM,
    +0.24%    ,
    have also set aside more money to guard against credit losses.

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  • Tesla is a ‘soft landing’ stock, says Goldman Sachs. Here are its picks for a gentle economic landing and stocks for a recession.

    Tesla is a ‘soft landing’ stock, says Goldman Sachs. Here are its picks for a gentle economic landing and stocks for a recession.

    [ad_1]

    Pour one out for the beleaguered economists, who for once got an important indicator, the consumer price index, right on the nose, after CPI fell 0.1% in December, while core prices rose 0.3%.

    “The 2021 surge in durable goods demand normalized, and the resulting collapse in durable goods price inflation was stunningly fast,” says Paul Donovan, chief economist of UBS Global Wealth Management.

    “The commodity wave of inflation is fading, and that leaves the profit margin expansion in focus,” he adds. What a good time for earnings season to be upon us, and what do you know, it is, kicking off with the banking sector on Friday before broadening out next week.

    Strategists at Goldman Sachs have a new note out, saying that the market is pricing in a soft landing even though the trend of earnings revisions points to a hard landing.

    They’re not that optimistic — even in the soft-landing scenario, the team led by David Kostin say the S&P 500
    SPX,
    +0.40%
    will end the year right around current levels, at 4,000. But they identify 46 stocks that could benefit — profitable, cyclical companies that are trading at price-to-earnings valuations below their 10-year median, among other factors.

    One name jumps out: Tesla
    TSLA,
    -0.94%    ,
    which trades at 22 times forward earnings versus the 10-year median of 117 times. But the other 45 names are less flashy, ranging from Capital One
    COF,
    +1.81%
    and Carlyle Group
    CG,
    +0.54%    ,
    to a host of industrials including 3M
    MMM,
    +0.12%    ,
    Parker-Hannifan
    PH,
    +0.73%
    and Otis Worldwide
    OTIS,
    +0.42%    .
    As a whole, these typically $10 billion companies are trading at 12 times earnings, versus 17 times usually.

    In the hard landing scenario, S&P 500 profit margins would shrink by 125 basis points, to 10.9% — about in line with the median peak-to-trough decline during the eight recessions since 1970, which has been 132 basis points. Consensus expectations are for a 26 basis-point margin decline.

    The Goldman team also have a 36 stock screen for a hard landing — profitable companies in defensive industries with a positive dividend yield. They’re typically food, beverage and tobacco companies as well as software and services companies — including Costco Wholesale
    COST,
    +0.58%    ,
    Kroger
    KR,
    -0.99%    ,
    Altria
    MO,
    +0.48%    ,
    Tyson Foods
    TSN,
    +0.23%    ,
    Microsoft
    MSFT,
    +0.30%    ,
    MasterCard
    MA,
    -1.13%
    and Visa
    V,
    -0.25%    .
    As a whole, these $37 billion companies are trading at 22 times earnings vs. a historical 24 times.

    The market

    After a 2.3% advance for the S&P 500
    SPX,
    +0.40%
    over the last three sessions, U.S. stock futures
    ES00,
    +0.39%

    NQ00,
    +0.58%
    declined on Friday.

    The yield on the Japanese 10-year bond
    TMBMKJP-10Y,
    0.511%
    exceeded 0.5%, the Bank of Japan’s yield cap, ahead of next week’s rate decision , prompting a second day of aggressive bond purchases from the central bank.

    For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.

    The buzz

    Fourth-quarter earnings were rolling out from Bank of America
    BAC,
    +2.20%    ,
    JPMorgan Chase
    JPM,
    +2.52%    ,
    Citigroup
    C,
    +1.69%
    and Wells Fargo
    WFC,
    +3.25%    ,
    and outside of banks, Delta Air Lines
    DAL,
    -3.54%    ,
    BlackRock
    BLK,
    +0.00%
    and UnitedHealth
    UNH,
    -1.23%    .

    JPMorgan shares slumped after forecast-beating earnings, though investment bank revenue came in light of estimates. Delta shares also declined after topping earnings estimates.

    Tesla
    TSLA,
    -0.94%
    cut prices of Model 3 and Model Y vehicles in the U.S. and elsewhere by up to 20%. The electric vehicle maker stock dropped 6%.

    Virgin Galactic
    SPCE,
    +12.34%
    surged after saying it’s on track to launch space-tourism flights in the second quarter.

    Apple
    AAPL,
    +1.01%
    says CEO Tim Cook requested, and received, a pay cut after investor criticism.

    The University of Michigan’s consumer-sentiment index is due at 10 a.m. Eastern, and Minneapolis Fed President Neel Kashkari and Philadelphia Fed President Patrick Harker are due to speak.

    Tyler Winklevoss said charges by the Securities and Exchange Commission brought about Gemini Trust for allegedly offering unregistered securities were “super lame” as it seeks to unfreeze $900 million in investor assets.

    Best of the web

    There’s a bull market in swearing on corporate earnings calls.

    The West is now preparing to send tanks to Ukraine in what could be another escalation of its conflict with Russia, which on Friday claimed victory in the eastern town of Soledar.

    A look back at photos of Lisa Marie Presley, who died at age 54.

    Top tickers

    Here were the most active stock-market tickers as of 6 a.m. Eastern.

    Ticker

    		 Security name
    BBBY,
    -30.15%         		Bed Bath & Beyond
    TSLA,
    -0.94%         		Tesla
    GME,
    -0.68%         		GameStop
    AMC,
    +0.80%         		AMC Entertainment
    MULN,
    -8.59%         		Mullen Automotive
    NIO,
    -0.08%         		Nio
    APE,
    -2.56%         		AMC Entertainment preferreds
    AAPL,
    +1.01%         		Apple
    SPCE,
    +12.34%         		Virgin Galactic
    AMZN,
    +2.99%         		Amazon.com
    Random reads

    Like a scene out of “Stranger Things” — there’s uproar after new restrictions on the Hasbro
    HAS,
    +0.21%
    game Dungeons & Dragons.

    Starting next month, Starbucks
    SBUX,
    +1.30%
    rewards will be less generous for most items, though iced coffee will be easier to get.

    Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

    Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton.

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  • 18 stock picks in a ‘Goldilocks’ scenario for U.S. consumers

    18 stock picks in a ‘Goldilocks’ scenario for U.S. consumers

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    It may not have been a surprise to see the consumer discretionary sector of the S&P 500 get hammered last year amid talk of a looming recession while the Federal Reserve jacked up interest rates to push back against inflation.

    But the stock market always looks ahead. Following a decline of 19.4% for the S&P 500
    SPX,
    +0.42%
    in 2022 and a 37.6% drop for the benchmark index’s consumer discretionary sector, this may be the time to begin looking for bargains.

    And now, analysts at Jefferies have lifted the sector to a “bullish” rating.

    In a note to clients on Jan. 10, Jefferies’ global equity strategist, Sean Darby, wrote: “A Goldilocks scenario might be unfolding for the U.S. consumer — falling inflation but steady employment conditions.”

    He sees consumer confidence improving, in part because “households are still sitting on [about] $1.4 trillion of Covid savings.”

    Darby pointed to a list of 18 consumer discretionary stocks favored by Jefferies analysts that was published on Jan. 6. Those are listed below, along with three stocks in the sector the analysts rate “underperform.”

    The ratings of the Jefferies analysts for individual stocks is based on their 12-month outlooks for the companies, in keeping with Wall Street tradition.

    So we have added another list further down, showing which companies in the S&P 500 consumer discretionary sector are expected by analysts polled by FactSet to increase sales the most through 2024.

    The Jefferies 18

    Here are the 18 consumer discretionary stocks recommended by Jefferies analysts with “buy” ratings on Jan. 6, sorted by how much upside the firm sees for the shares from closing prices on Jan. 9:

    Company

    		 Ticker

    		 Jan. 9 price

    		 Jefferies price target

    		 Implied 12-month upside potential

    		 Three-year estimated sales CAGR through 2022

    		 Two-year estimated sales CAGR through 2024
    Topgolf Callaway Brands Corp.

    		 MODG,
    -0.22%         		$20.76

    		 $56

    		 170%

    		 32.8%

    		 10.0%
    Bloomin’ Brands Inc.

    		 BLMN,
    +3.87%         		$22.08

    		 $35

    		 59%

    		 2.4%

    		 3.7%
    Coty Inc. Class A

    		 COTY,
    +1.23%         		$9.38

    		 $14

    		 49%

    		 -7.1%

    		 3.7%
    MGM Resorts International

    		 MGM,
    +1.71%         		$37.64

    		 $56

    		 49%

    		 -0.1%

    		 6.6%
    Chewy Inc. Class A

    		 CHWY,
    +1.63%         		$40.13

    		 $57

    		 42%

    		 28.0%

    		 10.6%
    Planet Fitness Inc. Class A

    		 PLNT,
    +0.69%         		$82.36

    		 $115

    		 40%

    		 10.4%

    		 13.9%
    Molson Coors Beverage Co. Class B

    		 TAP,
    +0.67%         		$50.21

    		 $69

    		 37%

    		 0.5%

    		 1.4%
    Fox Factory Holding Corp.

    		 FOXF,
    +3.95%         		$99.90

    		 $135

    		 35%

    		 28.1%

    		 6.6%
    Hasbro Inc.

    		 HAS,
    +0.99%         		$63.70

    		 $85

    		 33%

    		 9.1%

    		 3.6%
    Hostess Brands Inc. Class A

    		 TWNK,
    +0.33%         		$23.10

    		 $30

    		 30%

    		 14.2%

    		 5.0%
    Lowe’s Cos. Inc.

    		 LOW,
    +0.08%         		$199.44

    		 $250

    		 25%

    		 10.6%

    		 -1.9%
    Walmart Inc.

    		 WMT,
    -0.27%         		$144.95

    		 $175

    		 21%

    		 4.9%

    		 3.3%
    Dollar General Corp.

    		 DG,
    -0.26%         		$241.05

    		 $285

    		 18%

    		 10.9%

    		 6.7%
    Church & Dwight Co. Inc.

    		 CHD,
    -1.17%         		$82.25

    		 $97

    		 18%

    		 7.0%

    		 4.6%
    McDonald’s Corp.

    		 MCD,
    +0.39%         		$267.25

    		 $315

    		 18%

    		 2.4%

    		 4.0%
    Estee Lauder Cos. Inc. Class A

    		 EL,
    +0.39%         		$261.63

    		 $304

    		 16%

    		 2.8%

    		 5.8%
    Mondelez International Inc. Class A

    		 MDLZ,
    -0.04%         		$67.24

    		 $75

    		 12%

    		 6.3%

    		 4.1%
    Tapestry Inc.

    		 TPR,
    +0.73%         		$41.25

    		 $45

    		 9%

    		 3.3%

    		 3.2%
    Sources: Jefferies, FactSet

    Click on the tickers for more information about the companies.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    The two right-most columns on the table show estimated compound annual growth rates (CAGR) for the companies over the past three calendar years and expected sales CAGR for two years through calendar 2024, based on the companies’ financial reports and consensus estimates among analysts polled by FactSet.

    (We used calendar-year numbers, some of which are estimated by FactSet for prior years, because some companies have fiscal years or even months that don’t match the calendar.)

    The stock pick with the highest 12-month upside potential, based on Jefferies’ price target, is Topgolf Callaway Brands Corp.
    MODG,
    -0.22%    .
    This company has the highest estimated three-year sales CAGR on the list, and has the third-highest projected sales CAGR through 2024, after Planet Fitness Inc.
    PLNT,
    +0.69%
    and Chewy Inc.
    CHWY,
    +1.63%    .

    On Jan. 6, the Jefferies analysts also listed three stocks in the sector they rated “underperform.” Here they are, sorted by how much the analysts expect the stocks to decline over the next 12 months:

    Company

    		 Ticker

    		 Jan. 9 price

    		 Jefferies price target

    		 Implied 12-month upside potential

    		 Three-year estimated sales CAGR through 2022

    		 Two-year estimated sales CAGR through 2024
    Lululemon Athletica Inc.

    		 LULU,
    +2.98%         		$298.66

    		 $200

    		 -33%

    		 26.3%

    		 14.6%
    Williams-Sonoma Inc.

    		 WSM,
    +1.75%         		$122.17

    		 $98

    		 -20%

    		 14.1%

    		 -0.3%
    Harley-Davidson Inc.

    		 HOG,
    +0.35%         		$43.25

    		 $39

    		 -10%

    		 -2.8%

    		 4.4%
    Sources: Jefferies, FactSet
    Screen of consumer discretionary sales growth

    A look head at which companies are expected to increase sales the most over the next two years might serve as a good starting point for your own research.

    Bear in mind that some of the companies in travel-related industries suffered declining sales for three years through 2022 because of the coronavirus pandemic. Some of those are on this new list of 20 stocks in the S&P 500 consumer discretionary sector expected to show the highest two-year sales CAGR through calendar 2024:

    Company

    		 Ticker

    		 Two-year estimated sales CAGR through 2024

    		 Three-year estimated sales CAGR through 2022

    		 Share “buy” ratings

    		 Jan. 9 price

    		 Consensus price target

    		 Implied 12-month upside potential
    Las Vegas Sands Corp.

    		 LVS,
    +1.59%         		59.2%

    		 -32.6%

    		 79%

    		 $52.78

    		 $53.53

    		 1%
    Norwegian Cruise Line Holdings Ltd.

    		 NCLH,
    +1.67%         		39.6%

    		 -9.3%

    		 44%

    		 $13.78

    		 $16.96

    		 23%
    Carnival Corp.

    		 CCL,
    +1.64%         		35.2%

    		 -14.7%

    		 30%

    		 $9.47

    		 $10.11

    		 7%
    Tesla Inc.

    		 TSLA,
    -1.83%         		34.3%

    		 49.7%

    		 64%

    		 $119.77

    		 $232.43

    		 94%
    Wynn Resorts Ltd.

    		 WYNN,
    +2.01%         		29.3%

    		 -17.5%

    		 53%

    		 $94.33

    		 $96.07

    		 2%
    Royal Caribbean Group

    		 RCL,
    +2.22%         		28.4%

    		 -6.8%

    		 53%

    		 $57.29

    		 $66.43

    		 16%
    Chipotle Mexican Grill Inc.

    		 CMG,
    -0.17%         		13.4%

    		 15.9%

    		 71%

    		 $1,446.74

    		 $1,778.81

    		 23%
    Amazon.com Inc.

    		 AMZN,
    +2.61%         		12.2%

    		 22.1%

    		 92%

    		 $87.36

    		 $133.76

    		 53%
    Booking Holdings Inc.

    		 BKNG,
    +0.37%         		11.9%

    		 3.9%

    		 63%

    		 $2,208.41

    		 $2,307.67

    		 4%
    Aptiv PLC

    		 APTV,
    +1.66%         		11.9%

    		 6.4%

    		 70%

    		 $97.98

    		 $117.23

    		 20%
    Starbucks Corp.

    		 SBUX,
    +1.28%         		11.2%

    		 7.2%

    		 42%

    		 $104.74

    		 $103.44

    		 -1%
    Etsy Inc.

    		 ETSY,
    +3.56%         		11.1%

    		 45.3%

    		 50%

    		 $120.99

    		 $124.04

    		 3%
    Hilton Worldwide Holdings Inc.

    		 HLT,
    +0.06%         		10.1%

    		 -2.9%

    		 38%

    		 $129.08

    		 $146.17

    		 13%
    Expedia Group Inc.

    		 EXPE,
    +0.39%         		9.0%

    		 -0.9%

    		 50%

    		 $93.77

    		 $125.65

    		 34%
    NIKE Inc. Class B

    		 NKE,
    +0.68%         		8.1%

    		 5.8%

    		 62%

    		 $124.85

    		 $126.15

    		 1%
    Marriott International Inc. Class A

    		 MAR,
    +0.47%         		7.5%

    		 -1.2%

    		 30%

    		 $152.53

    		 $172.81

    		 13%
    BorgWarner Inc.

    		 BWA,
    +1.82%         		7.1%

    		 15.3%

    		 53%

    		 $42.24

    		 $46.93

    		 11%
    Tractor Supply Co.

    		 TSCO,
    +1.06%         		6.8%

    		 19.0%

    		 61%

    		 $217.48

    		 $232.34

    		 7%
    Yum! Brands Inc.

    		 YUM,
    -0.76%         		6.7%

    		 6.4%

    		 47%

    		 $129.76

    		 $137.79

    		 6%
    Dollar General Corp.

    		 DG,
    -0.26%         		6.7%

    		 10.9%

    		 67%

    		 $241.05

    		 $267.54

    		 11%
    Source: FactSet

    Among the companies on this list that didn’t suffer sales declines from 2019 levels, Tesla Inc.
    TSLA,
    -1.83%
    is expected to achieve the highest two-year sales CAGR through 2022.

    Dollar General Corp.
    DG,
    -0.26%
    is the only company to appear on this list based on consensus sales growth estimates and the Jefferies recommended list.

    Don’t miss: These 15 Dividend Aristocrat stocks have been the best income builders

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  • FIFA rebuffed Zelensky’s offer to share message of peace at World Cup final, report says

    FIFA rebuffed Zelensky’s offer to share message of peace at World Cup final, report says

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    World soccer’s governing body FIFA rebuffed an offer from Ukrainian President Volodymyr Zelensky to share a message of world peace at the World Cup final, according to a CNN report.

    Citing an unnamed source, CNN reported that Zelensky’s office offered an appearance via video link prior to kickoff at Sunday’s final. Defending World Cup champion France takes on Argentina in the match at Lusail Stadium, several miles north of the Qatari capital Doha.

    The source told CNN that Zelensky’s office was surprised by the negative response. It’s unclear if the message was to be delivered live, or taped, the report said. “We thought FIFA wanted to use its platform for the greater good,” the source was quoted as having told CNN, reportedly adding that talks between Ukraine and FIFA are ongoing.

    See: Qatar World Cup controversy means sponsors are walking a tightrope

    MarketWatch has reached out to FIFA and Zelensky’s office with requests for comment.

    Since Russia launched its full-scale invasion of Ukraine on Feb. 24, Zelensky has used high-profile video addresses to rally international support for his embattled nation. These have included addresses to the U.N. General Assembly, the U.S. Congress, Britain’s House of Commons, the German Bundestag, the European Parliament and a G-20 summit, as well as video-link appearances at the Grammys and the Cannes Film Festival.

    The last World Cup was held in Russia, with Russian President Vladimir Putin in attendance as France defeated Croatia 4-2 in the final. (FIFA, controversially, announced its host-country selections for 2018 and 2022 — Russia and Qatar — on the same December day in 2010.)

    The 2022 tournament is perhaps the most controversial in World Cup history, with Qatar facing a barrage of criticism over its treatment of migrant workers and its approach to LGBTQ+ rights in the country.

    Now read: British band the Farm blocks McDonald’s from using hit song in Qatar World Cup ad

    The criticism of Qatar, the first Arab nation to host a World Cup, reached a crescendo before the tournament kicked off last month. During a press conference on the eve of the opening game, FIFA’s president, Gianni Infantino, launched into a lengthy defense of the decision to hold the tournamentin Qatar and accused the West of “hypocrisy.”

    This World Cup is also the first to take place during the northern hemisphere’s winter. Traditionally, the tournament takes place in June and July, but this year’s tournament was moved to minimize the impact of Qatar’s searing heat.

    See: For Budweiser, Qatar World Cup has been a tale of tough logistics and quick thinking

    Branding experts have observed that this controversial World Cup poses challenges for the big-name corporations involved in the event. FIFA’s list of partners includes U.S. corporate titans Coca-Cola Co.
    KO,
    -0.57%
     and Visa Inc. 
    V,
    -0.49%    ,
      who are both involved in the Qatar event. McDonald’s Corp. 
    MCD,
    -2.06%
    and Crypto.com are also World Cup sponsors.

    The tournament’s beer sponsor, Budweiser, an Anheuser-Busch InBev
    BUD,
    -0.18%
    brand, has had a particularly eventful several weeks in Qatar. In an abrupt reversal just two days before the soccer showpiece kicked, Qatar organizers banned beer sales in the tournament’s eight stadiums.

    The reversal of that decision appeared to take Budweiser by surprise, with the company tweeting “Well, this is awkward …” before deleting the post. Budweiser quickly shrugged off the beer ban and promised a huge victory party for the country that wins the soccer showpiece.

    Fox Sports, which is owned by Fox Corp.
    FOX,
    -0.21%    ,
     a sister company of MarketWatch publisher Dow Jones’s parent company, News Corp
    NWSA,
    +0.28%    ,
      holds English-language broadcast rights in the U.S. to the Qatar World Cup.

    Read on: Could Qatar’s ‘reusable’ World Cup stadium end up in Uruguay? There are some amazing plans for tournament venues.

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  • It’s Argentina vs. France in the World Cup final: Here’s everything you should know about the matchup

    It’s Argentina vs. France in the World Cup final: Here’s everything you should know about the matchup

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    After a month of stiff competition in Qatar, the 2022 World Cup’s final matchup is finally set.

    Argentina learned Wednesday that defending World Cup winner France will be its opponent in the final on Sunday. France topped a history-making Morocco side 2-0 a day after Argentina shut out Croatia, which lost to France in the 2018 final, a day earlier. Croatia and Morocco square off for third place in the tournament.

    Related: Why is 2022 Qatar World Cup so controversial? Here’s a list of issues overshadowing FIFA’s tournament.

    Argentina and France, led by Lionel Messi and Kylian Mbappé, respectively, were two among a handful of favorites heading into the quadrennial footballing spectacle.

    Here’s what you need to know ahead of the World Cup final.

    When is the World Cup final?

    The tournament title match will be played Sunday, Dec. 18, at 10 a.m. Eastern time. That’s 6 p.m. in Qatar, earlier than the tournament matches have typically been played.

    The World Cup final can be watched in the U.S. on Fox
    FOX,
    -0.90%
     
    FOXA,
    -0.72%
    and Telemundo, owned by Comcast
    CMCSA,
    -3.70%
    unit NBCUniversal. Fox is available through nearly all cable providers, and cord cutters can stream the match live through FuboTV FUBO, SlingTV, the Alphabet-owned
    GOOG,
    -0.56%
     
    GOOGL,
    -0.59%
    YouTubeTV and Comcast’s Peacock.

    Who’s favored to win?

    Both teams have been oddsmakers’ favorite in every one of their 2022 World Cup matches leading up to the final. But for the grand finale, France is seen a slight favorite over Argentina. France is +175 to win, which carries an implied probability of 36.4%, while the Argentina team is being given a 35.1% chance to win, according to the implied-probability data taken from DraftKings’
    DKNG,
    -1.60%
     odds on Wednesday. The outstanding percentage would account for a draw, though all matches beginning in the knockout stage go to a penalty shootout if a score is tied at the end of regulation and at the end of two 15-minute halves of overtime.

    What’s at stake?

    A win for France would mean back-to-back men’s World Cup wins for the European nation, and France’s third title in history.

    Likewise, a win for Argentina would mean its third World Cup title, and the first World Cup win for legend of the game Messi.

    Related: Budweiser says it will award unconsumed Qatar beer to the World Cup winner

    A record-breaking amount of prize money will also be at stake. FIFA has allocated $440 million in prize money this year, up from $400 million for the 2018 World Cup, hosted by Russia. (FIFA announced on the same day in December 2010 its selection of Russia and Qatar to host the global game’s marquee event in 2018 and 2022, respectively.)

    This year’s winning side will get $42 million, up $4 million from the 2018 tournament.

    The runner-up will receive $30 million, and the third- and fourth-place teams are going home with $27 million and $25 million. As for the rest, the teams that lost in the quarterfinals will each receive $17 million; teams that lost in the second round will get $13 million each; and teams knocked out in the group stage (including the U.S.) will get $9 million each. All 32 qualifying teams also received $1.5 million for securing their spots in the tournament. Only Qatar, as the host country, did not have to play its way in through regional competition.

    Is this really Lionel Messi’s last World Cup?

    Messi, playing in his fifth career World Cup, has said that this would probably be the last time he plays in the competition.

    Failing over the years to achieve in international competition for Argentina what he has in club play (save an appearance in the 2014 final against Germany and a Copa America title in 2021), chiefly with Barcelona in Spain and now with Paris Saint-Germain in France, where he and Mbappé are teammates, Messi has previously announced and rescinded an intent to step back as an international. Only now he’s 35.

    From the archives (January 2010): Club or country? Soccer World Cup revives old tensions

    “Yes. Surely, yes,” Messi said when asked whether Sunday’s game will be his last at a World Cup. “There’s a lot of years until the next one, and I don’t think I have it in me, and finishing like this is best.”

    The Margin: Could Qatar’s ‘reusable’ World Cup stadium end up in Uruguay? There are some amazing plans for tournament venues.

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  • World Cup organizers in Qatar will reportedly ban beer sales at all eight stadiums

    World Cup organizers in Qatar will reportedly ban beer sales at all eight stadiums

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    DOHA, Qatar (AP) — World Cup organizers will ban the sale of all beer with alcohol at the eight stadiums used for the soccer tournament, a person with knowledge of the decision told The Associated Press.

    The decision comes only two days before games start in Qatar and 12 years after the country first consented to respect FIFA’s commercial partners.

    Non-alcoholic beer will still be available for fans at the 64 matches, the person said.

    The person spoke on condition of anonymity because organizers have not yet announced the decision.

    Champagne, wine, whiskey and other alcohol is still expected to be served in the hospitality areas of the stadiums. Outside of those places, beer is normally the only alcohol sold to regular ticket holders.

    Ronan Evain, the executive director of the fan group Football Supporters Europe, called the decision to ban beer sales at the stadiums “extremely worrying.”

    “For many fans, whether they don’t drink alcohol or are used to dry stadium policies at home, this is a detail. It won’t change their tournament,” Evain wrote on Twitter. “But with 48 (hours) to go, we’ve clearly entered a dangerous territory — where ‘assurances’ don’t matter anymore.”

    While a sudden decision like this may seem extreme in the West, Qatar is an autocracy governed by a hereditary emir, who has absolute say over all governmental decisions.

    Qatar, an energy-rich Gulf Arab country, follows an ultraconservative form of Islam known as Wahhabism like neighboring Saudi Arabia. However, alcohol sales have been permitted in hotel bars for years.

    Qatar’s government and its Supreme Committee for Delivery and Legacy did not immediately respond to request for comment.

    Already, the tournament has seen Qatar change the date of the opening match only weeks before the World Cup began.

    Budweiser’s parent company, AB InBev
    ABI,
    +1.28%

    BUD,
    -0.05%    ,
    pays tens of millions of dollars at each World Cup for exclusive rights to sell beer. and has already shipped the majority of its stock from Britain to Qatar in expectation of selling its product to millions of fans. The company’s partnership with FIFA started at the 1986 tournament and they are in negotiations for renewing their deal for the next World Cup in North America.

    When Qatar launched its bid to host the World Cup, the country agreed to FIFA’s requirements of selling alcohol in stadiums, and again when signing contracts after winning the vote in 2010.

    At the 2014 World Cup in Brazil, the host country was forced to change a law to allow alcohol sales in stadiums.

    AB InBev’s deal with FIFA was renewed in 2011 — after Qatar was picked as host — in a two-tournament package through 2022. However, the Belgium-based brewer has faced uncertainty in recent months on the exact details of where it can serve and sell beer in Qatar.

    An agreement was announced in September for beer with alcohol to be sold within the stadium perimeters before and after games. Only alcohol-free Bud Zero would be sold in the stadium concourses for fans to drink in their seats in branded cups.

    Last weekend, AB InBev was left surprised by a new policy insisted on by Qatari organizers to move beer stalls to less visible locations within the perimeter.

    Budweiser was also to be sold in the evenings only at the official FIFA fan zone in downtown Al Bidda Park, where up to 40,000 fans can gather to watch games on giant screens. The price was confirmed as $14 for a beer.

    Ab InBev did not immediately respond to a request for comment.

    The company will be based at an upscale hotel in the West Bay area of Doha with its own branded nightclub for the tournament.

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  • Mobileye prices IPO above targeted range to raise nearly $1 billion, and most of it will go to Intel

    Mobileye prices IPO above targeted range to raise nearly $1 billion, and most of it will go to Intel

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    Mobileye Global Inc. priced its initial public offering higher than its targeted range late Tuesday to raise nearly $1 billion, most of which will go to Intel Corp.

    Mobileye priced its initial public offering at $21 late Tuesday, the company announced in a news release, after previously stating a targeted range of $18 to $20; shares are expected to begin trading on the Nasdaq under the ticker symbol “MBLY” on Wednesday. Intel
    INTC,
    +0.85%
    will sell at least 41 million shares of Mobileye, which would raise $861 million, and also agreed to a $100 million concurrent sale of stock to General Atlantic, which would make the total raised at least $961 million.

    Intel paid $15.3 billion to acquire Mobileye in 2017, and was reportedly aiming for a valuation as high as $50 billion when originally planning this IPO, but instead will settle for a basic valuation of roughly $16.7 billion. After a record year with more than 1,000 offerings in 2021, the IPO market has largely dried up in 2022.

    Read: Mobileye IPO: 5 things to know about the Intel autonomous-driving spinoff

    Underwriting banks — Intel listed two dozen underwriters, led by Goldman Sachs Group Inc.
    GS,
    +1.13%
    and Morgan Stanley
    MS,
    +1.36%
    — have access to an additional 6.15 million shares for overallotments, which could push the total raised higher than $1 billion and make Mobileye the second-largest offering of the year. Only two offerings thus far this year have raised at least $1 billion — private-equity firm TPG Inc.
    TPG,
    +4.21%
    raised exactly $1 billion in January, and American International Group Inc. 
    AIG,
    -0.11%
    spinoff Corebridge Financial Inc.
    CRBG,
    +1.36%
    raised at least $1.68 billion in September.

    Intel will receive the bulk of the proceeds of the offering — after promising to make sure that Mobileye has $1 billion in cash and equivalents, the chip maker will take the rest of the proceeds for its own coffers. Wells Fargo analysts calculated that Mobileye will need about $225 million to hit that level, leaving at least $736 million for Intel before fees and other costs.

    Intel will also maintain control of the company after spinning it off, keeping class B shares that will convey 10 votes for each share while selling class A shares that convey one vote per share. Intel will retain more than 99% of the voting power and nearly 94% of the economic ownership of the company, and the Mobileye board is expected to include four members with ties to Intel, including Chief Executive Pat Gelsinger serving as chairman of the board.

    Read also: Intel files for Mobileye IPO, creating a share structure that will keep the chipmaker in control

    Mobileye will continue to be led by founder Amnon Shashua, who served as chief executive before Intel acquired the company and stayed at the helm while it was part of the Silicon Valley chip maker. Shashua founded Mobileye in 1999 and turned it into a pioneer in the field of automated-driving technology and one of Israel’s most prominent tech companies.

    Mobileye filed for the initial public offering at the end of September, when executives were still reportedly hoping for a $30 billion valuation.

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  • Ford stock is now a ‘sell’ at UBS as an oversupply problem looms

    Ford stock is now a ‘sell’ at UBS as an oversupply problem looms

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    Shares of Ford Motor Co. were hit hard Monday by UBS analyst Patrick Hummel’s recommendation that investors sell, as the auto industry is facing a worrisome U-turn from undersupply to oversupply.

    Hummel also cut his ratings on several other global auto makers, including General Motors Co.
    GM,
    -5.59%    ,
    saying that as a recession concerns grow, “demand destruction is no longer a vague risk.”

    In addition to all of the data suggesting the economy is slowing, Hummel said growing U.S. dealer inventories, weak used-car pricing, used-car dealer profit warnings and signs indicating deteriorating orders and shorter delivery times make him more cautious on the overall auto industry.

    Don’t miss: CarMax stock suffered biggest selloff since the year 2000, as inflation, low consumer confidence lead to big profit miss.

    “We think it will only take 3-6 months for the auto industry to end up in oversupply, which will put an abrupt end to a 3-year phase of unprecedented OEM [original equipment manufacturer] pricing power and margins,” Hummel wrote in a note to clients.

    As part of his negative industry outlook, he cut his rating on Ford
    F,
    -7.38%
    to sell from neutral and his stock price target to $10 from $13, with the new target implying about 11% downside from current levels.

    Ford’s stock sank 7.6% in morning trading. It was trading up just 0.6% month to date, after plunging 26.5% in September to suffer its worst monthly performance since it plummeted 30.6% during pandemic-stricken March 2020.

    Hummel noted that Ford has already warned about having more vehicles in inventory than expected, and above payments to suppliers running about $1 billion higher than projected, so he sees little margin left for negative surprises in terms of fourth-quarter deliveries and supply costs.

    Hummel cut his 2023 adjusted earnings-per-share estimate by 61% to 52 cents a share, to reflect a $6.5 billion drop in price and sales mix. The compares with the current 2023 FactSet EPS consensus of $1.87.

    “This sounds very negative, but Ford gains $19 billion in price alone since the beginning of 2020,” Hummel wrote.

    Also read: Ford again raises price of F-150 Lightning electric pickup.

    Read more: Ford September sales fall as drop in trucks offsets near tripling in EVs.

    Meanwhile, GM’s stock dove 6.9% in morning trading toward a three-month low, and shares have shed 2.5% so far this month after tumbling 16% last month.

    Hummel downgraded GM to neutral from buy, and dropped his price target by 32%, to $38 from $56.

    The rating remains above Ford’s, because unlike its rival, Hummel noted that GM has had “no hiccups” in its third-quarter production schedule and therefore a “solid” quarterly report is expected. However, the downgrade reflects the fact that GM is “not immune” to a downturn in the industry.

    Separately, Hummel also cut his stock-price target on Tesla Inc.
    TSLA,
    -0.16%
    to $350 from $367, saying that following a third-quarter volume report that was below expectations, it will be “more challenging” for the electric-vehicle maker to meet its 2022 delivery growth target.

    However, Hummel reiterated his buy rating on Tesla, as he believes the EV maker is best positioned to use pricing as the tool to fill its factories.

    “Overall, the recession outlook should result in moderately lower margins for Tesla than previously expected, but we’re highly confident that by keeping the top line [revenue] momentum, Tesla will even widen the gap vs. competitors in terms of profitability,” Hummel wrote.

    Ford’s stock has fallen 3% over the past three months, while GM shares have lost 3.1% and Tesla’s stock has dropped 11.8%. In comparison, the S&P 500 index
    SPX,
    -1.08%
    has declined 7.5% the past three months.

    Among other auto makers, he also downgraded both Renault SA
    RNO,
    +2.41%

    RNLSY,
    +1.17%
    and Volkswagen AG
    VOW,
    -3.29%
    to neutral from buy. He also downgraded auto parts makers Continental AG
    CON,
    +0.10%
    and Faurecia SE
    EO,
    -3.77%

    FURCF,
    -3.67%
    to neutral from buy.

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  • Intel files for Mobileye IPO, creating a share structure that will keep the chipmaker in control

    Intel files for Mobileye IPO, creating a share structure that will keep the chipmaker in control

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    After nearly a year’s wait, Mobileye is on the highway to Wall Street.

    Intel Corp.
    INTC,
    -2.31%
    -owned Mobileye Global Inc. launched its drive to an initial public offering in a Securities and Exchange Commission filing late Friday, leaving the size of the offering blank for now on what is expected to be one of the largest IPOs of the year.

    Intel executives were targeting mid-2022 as of late last year, and filed confidentially with the SEC in March for the IPO of its self-driving-car unit, but the IPO market has been dry amid a decline for stocks, especially those that went public in a 2021 rush.

    Mobileye plans to trade Class A shares of common stock on the Nasdaq exchange under the symbol “MBLY,” the same symbol the company had before Intel acquired Mobileye in 2017 for $15.3 billion in cash. While selling shares in Mobileye, Intel will retain official control of the company, keeping class B shares that carry 10 votes apiece while selling class A shares that have only one vote.

    Mobileye also plans to have four Intel-affiliated members on its board, including Chief Executive Pat Gelsinger serving as chairman of Mobileye’s board.

    Intel will also get paid from the offering: Mobileye issued Intel a dividend note for $3.5 billion, and expects to pay that off with proceeds from the sale, according to the filing; there was an initial payment of $336 million, leaving more than $3 billion still owed to Intel. Earlier reporting suggested Intel would seek a $30 billion valuation for Mobileye in the IPO, though the initial filing Friday did not include targeted prices for the shares.

    The filing did include financial information, though: Mobileye reported revenue of $1.39 billion in 2021, well ahead of Nvidia Corp.
    NVDA,
    -0.66%    ,
    which reported fiscal-year revenue of $566 million in auto chip sales in January. Mobileye reported a loss of $70 million last year, compared with a $196 million loss in 2020 and $328 million in 2019. Revenue in the first half of this year hit $854 million, growing 41% in the second quarter from the year before.

    The filing lists a whopping 24 underwriters for the deal including Goldman Sachs, Morgan Stanley, Evercore ISI, Barclays, Citigroup, and B of A Securities.

    Shares of Intel were up 0.5% after hours Friday, following a 2.3% decline in the regular session to close at $25.77.

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