Pre-Powell Cyber Monday Deals

Friday markets saw as much action as a third-year associate at the end of a quarter. The dollar is heading for its steepest monthly decline since 2009, Treasury yields are down, and investors continue their flock to corporate credit and junk bonds. JPow is set to speak this week, and a NY Times reporter cosplaying as a real journalist is interviewing SBF. 

Let's dive into what you missed over the market holiday and what to expect for the week ahead. 

But first, a quick note from Wall Street Prep.

Don't Blow Your Dream IB Interview

Finance nightmare, a short story:

Target undergraduate school. 4.0 GPA. Great extracurriculars. The MD plays golf with your dad.

You're set, this job is a lock. And you are breezing through the interview. The end is in sight, as long as you crush the case study. You are well on your way... until you can't remember how to run a DCF model.

And just like that, everything falls apart.

Game over. Have fun with the back office gig.

If you don't want to be a back-office guy, make sure you stick the interview by using Wall Street Prep.

Wall Street Prep offers a complete Financial and Valuation modeling training program, so you can learn financial statement modeling, DCF, Trading and Transaction Comps, M&A and LBO. This is the same program used to train professionals at top investment banks and financial institutions.

Crush your interview and land that dream job by checking out Wall Street Prep's course today! Get an extra 15% off with code "LITQUIDITY" at checkout.

Bad News Dumpster Dive

Market movers like to bury their news, so we've decided to excavate them. 

Equities: 

• Credit Suisse closed Friday at all time lows (WSJ)

• Elon Musk said he’d “make an alternative phone” if Google and Apple remove Twitter from their App Stores (CNBC)

• Amazon to shut down food-delivery business in India (Reuters)

• Foxconn's Chinese iPhone plant continues to hemorrhage workers. It now faces more than 30% of its November production being affected (Reuters)

• Ford recalled 634K SUVs in the US over possible fuel leaks and fire risk (AP)

Crypto: 

• Genesis Global Capital is being investigated by US securities regulators (Barron's)

• Barry Silbert, the founder of crypto conglomerate Digital Currency Group, revealed the crypto firm has $2 billion in debt (CNBC)

• Amazon is working on a TV series about the FTX collapse with the Russo Brothers (TechCrunch)

Regulation: 

• FCC banned Huawei, ZTE telecom equipment, from sale in US (Bloomberg)

• Two women who accused Jeffrey Epstein of sexual abuse have sued JPMorgan and Deutsche Bank, claiming the banks participated in the alleged cover-up (Forbes)

• 5 of 8 Congress members who tried to stop the SEC’s inquiry into FTX received campaign donations from FTX employees (WSP)

M&A: 

• Alphabet (GOOGL) investor TCI called on management to cut excessive costs (Letter)

• BHP Group (BHP) reportedly tapped UBS to sell mines assets (MarketScreener)

• Freyr Battery (FREY) in talks with KKR regarding potential investment (Bloomberg)

• Sculptor Capital Management (SCU) formed a special committee to explore potential transactions (Press Release)

• 8x8 (EGHT) reportedly approached by a strategic buyer (Seeking Alpha)

• Oak Street Health’s (OSH) CMO downplayed takeover speculation (Healthcare Dive)

• Otonomo Technologies (OTMO) reportedly in talks to merge with UK rival Wejo Group (WEJO) (Globes)

Prediction Markets Corner: 

• The U.S. is likely headed for a “mild” recession in 2023, former Boston Fed President Eric Rosengren has said. Markets still predict a soft landing being over 5x more likely than stagflation. 

• The US bond market is zeroing in on a recession next year. Traders are betting that the longer-term trajectory for interest rates will be down even as the Fed is busy raising its policy rate.

• Europe’s largest economy is heading for a recession. The two-year yield in Germany closed higher than its 10-year counterpart by the most since 1992, only two weeks after inverting for the first time since the pandemic. The moves signal Euro area inflation is predicted to end 2022 >10%. 

• Ukraine's President Zelenskiy calls for the EU's Russian oil price cap to be set at $30 per barrel, not the proposed $60 or $70. Stateside, WTI is forecasted to close next week at $74.50. 

• Private jet owners flying has increased, despite higher fuel prices and inflation. This week, TSA airport screenings are forecasted to remain below 2.25 million. 

• The Biden administration granted Chevron a license to resume oil production in Venezuela after US sanctions halted all drilling activities three years ago. The price of diesel is projected to close the week around $4.80. 

Market Outlook

News to know for the week ahead

All eyes will be on the jobs report this week before scheduled Fed speeches. Despite markets welcoming the prospect of smaller hikes, analysts expect the Fed to counter that by emphasizing the need to reach an appropriately higher terminal rate. 

Fed Chair Jerome Powell and New York Fed President John Williams are among central bank officials scheduled to speak this week. Strategists expect both officials will make clear that a tight labor market and elevated services inflation will keep the Fed hiking for longer. 

Trading on Monday will hinge on Black Friday sales and further information on the virus outbreak in China. Black Friday shopping saw only modest traffic, leaving profitability in doubt for many retailers.  As fire and violence continued to mount in Beijing over the weekend, economists expect China’s economy will still take a year to 18 months to open up. 

China’s central bank cut the amount of cash lenders must hold in reserve for the second time this year on Friday. It marks an escalation of support for an economy racked by surging Covid cases and a continued property downturn. Frustrations are mounting in China, as reports cite central Beijing is looking like a ghost town again. US-listed Chinese stocks fell on Friday and posted their first weekly decline this month.

Oil suffered a third weekly loss analysts expect to extend. European Union diplomats did not meet on Friday or over the weekend to discuss the oil-price cap. Divisions within the bloc remain entrenched.

The L Suite

Powered by Kalshi

As always, these market forecasts are powered by Kalshi, the first regulated prediction market in the US. Trust data, not pundits, and get your forecasts from people with real skin in the game.