Ligma Levers Up To The L-Suite

It was a terrible, horrible, no good, very bad week for the tech sector (unless you’re Tim Cook). Tech giants are facing pressure to tighten finances post-earnings rout, Elon Musk is tightening Twitter’s workforce, and Brazil is tightening who it wants to be President today. Meanwhile, across the pond, Rishi Sunak appointed a former Love Island executive to be his communications chief.

Let's dive in.

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Bad News Dumpster Dive

​​The “Friday news dump" is alive and well. In the spirit of highlighting all the efforts of market movers to bury their news, we've decided to excavate them. Here are all the Friday and weekend dumps for your viewing pleasure:

Saturday (all EDT):

7:00 AM: Tensions continue to rise from the final presidential debate before Brazil’s election today (Sunday). The two candidates faced off in a final debate on Friday evening. Polls show more than 90% of people have already made up their minds, leaving a narrow portion of voters to be swayed (BBG).

10:03 AM: Another wave of layoffs at Twitter hits, including the following senior executives:

• Lorenzo Fondalma, VP of European Operations

• Craven Morehead, VP Finance

• Candice Dyck, Head of Cybersecurity

1:26 PM: Canada has introduced Ukraine Sovereignty Bonds, a way for Canadians to provide direct support to Ukraine. The bonds will help the Ukrainian government continue operations, like providing essential services and purchasing fuel before winter (ABC).

2:31 PM: Oil giants' massive profits revive calls for windfall taxes (Reuters).

5:12 PM: Rishi Sunak hires ITV's Amber de Botton as communications chief (BBC).

7:42 PM: Russia says it will suspend UN-brokered Ukraine grain export deal after Ukraine strikes warships in Crimea (Washington Post).

10:21 PM: Elon Musk has reportedly planned to begin laying off workers at Twitter as soon as today. Managers will be asked to draw up lists of employees to cut before a Nov. 1 date when employees were scheduled to receive stock grants as part of their compensation (NY Times).

10:30 PM: The employee contribution limit for 401(k)s will jump to $22,500 for 2023, the largest increase ever due to inflation adjustments (MoneyWise).

11:15 PM: At least 151 dead in crowd crush at Seoul Halloween event (Washington Post).

Friday (all EDT):

1:13 AM: The fifth cyberattack disclosed in Australia in just one month is triggering calls for an injection of investment in security and US-style bounties to be paid to hackers who find holes in corporate defenses (BBG).

2:18 AM: Binance, the world’s largest cryptocurrency exchange, confirmed that it’s an equity investor in Elon Musk’s $44 billion acquisition of Twitter (BBG).

2:52 AM: Apple’s biggest iPhone plant in China this week hastily enacted measures aimed at quelling a Covid outbreak that sent 200,000+ workers into isolation -- many without meals. Employees aren’t allowed to leave the manufacturing campus and are tested regularly (BBG).

4:07 AM: Demand for Series I bonds crashes TreasuryDirect site ahead of key deadline as investors try to secure 9.62% rate (Yahoo Finance).

4:43 AM: Aurubis AG, Europe’s biggest copper producer, was hit by a cyberattack overnight that it said appeared to be part of a wider attack on the metals and mining industry (NASDAQ).

5:42 AM: Apple lost a London appeal over essential technology patents that are used in iPhones (BBG).

7:02 AM: Japan announced a $490 billion stimulus package to ease the impact of rising prices (AP).

8:04 AM: JPMorgan Chase & Co. ($365B+) surpassed Meta Platforms Inc.’s market value this month for the first time since 2015 (BBG).

9:43 AM: Ye’s (formerly Kanye West) Twitter account had its suspension seemingly lifted (TRI).

11:13 AM: US regulators will decide today if Kalshi, an event-futures market aimed at retail traders, will be allowed to let investors bet on election outcomes (Morning Brew).

11:15 AM: Chevron’s stock climbed after the oil and gas giant delivered a big earnings beat in the third quarter. It reported adjusted earnings of $10.8B ($5.56 a share), a 90% increase on the year-ago period, but below the second-quarter’s $11.4B (Barron’s).

11:18 AM: India is revamping its internet rules to include an appeals panel for social media grievances (BBG).

12:04 PM: Tom Brady and Gisele Bundchen announce divorce after 13 years of marriage (CNBC).

12:59 PM: The Dow on track for its best October since its creation by Charles Dow in the late 19th century (MarketWatch).

2:58 PM: The EU officially signed the agreement to increase required cuts to carbon emissions by 2030 and issues a complete ban on new combustion cars and vans from 2035 onward (Washington Post).

4:57 PM: Blackstone, Apollo Global and KKR are among private equity firms facing a US probe into whether they influence boards across corporate America in ways that violated antitrust laws (Yahoo Finance).

5:13 PM: GM temporarily suspends advertising on Twitter following Elon Musk takeover (CNBC).

7:16 PM: Mortgage demand has dropped to its lowest in 25 years, according to the Mortgage Bankers Association (CNBC).

Market Outlook

News to know for the week ahead

Expect fallout from the Brazilian election results. Incumbent Jair Bolsonaro favors privatization and a relatively modest tax revamp. Former President Luiz Inácio Lula da Silva (“Lula”) wants state-owned firms to take a more active role in the economy, and a serious overhaul of the tax system.

Pundits predict the Federal Reserve will raise rates by 75 basis points for a fourth consecutive meeting at 3 PM EDT on Wednesday. Expert consensus expects Fed officials to maintain their hawkish stance, laying the groundwork for interest rates reaching 5% by March 2023. The economists surveyed expect these moves to lead to a US and global recession.

It will be a turbulent week ahead for now-Twitter CEO Elon Musk, as analysts debate what he will actually do with the social media platform. Musk gave one indication of where he’s headed in a tweet Friday, saying no decisions on content or reinstating of accounts will be made until a “content moderation council” is put in place. Major personnel shake ups are widely expected to ramp up, with Musk ousting several top Twitter executives on Thursday.

The Bank of England will deliver its next increase on November 3rd. Experts anticipate a 75-basis-point increase in interest rates, or an even bigger lift in order to tamp down double-digit inflation. The ECB has now raised rates by a full 2 percentage points in just three months. Hikes of that magnitude previously took 18 months in 2005-2007 and 17 months in 1999-2000. The benchmark for short-term lending to banks now stands at 2%, a level last seen in March 2009.

Economists expect the “new normal” for mortgage rates to be around 7%. Pending sales are down 30.4% from a year ago on an unadjusted basis. It suggests evidence of a housing market that’s become a casualty of aggressive interest-rate hikes by a Fed aiming to extinguish rapid inflation. Thirty-year fixed mortgage rates are now above 7%, to a more than 20-year high that’s reducing affordability. Rates are expected to retreat only when inflation is tamed, boosting home purchasing power for buyers.

The L-Suite

Rahul Ligma is the PR legend Musk doesn’t deserve and Rishi Sunak needs. Early in the morning as journalists waited outside Twitter HQ, they began publishing stories about two "fired engineers" from Twitter named Ligma and Johnson.

Individuals with working fingers and internet connection soon found that neither ever worked at Twitter. It turns out that to qualify as a “former Twitter engineer,” all you need is a box, Patagonia jacket and Michelle Obama’s autobiography.

Anyone hiring for data engineers would be remiss not to invite Mr. Ligma in for an interview.

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