Welcome to 10 Things Before the Opening Bell.
Let’s jump in.
1. Big-box retailers are doing just fine. Retail giants Target and Walmart posted strong earnings beats despite inflation and supply-chain snags that have crippled many businesses nationwide. Deep pockets have allowed both companies to run normally and sidestep transportation logjams by chartering their own shipping boats, among other creative solutions.
Walmart said that more customers are hitting its stores, and added in its earnings call that its cost inflation has risen, but retail inflation has yet to increase. The value-focused chain is still focused on keeping prices low for now.
Target CEO Brian Cornell made similar statements, saying the retailer has prioritized keeping prices low for customers as the holiday season kicks off. Target is absorbing inflation costs and, so far, has protected its patrons from shouldering the burden of higher prices.
By contrast, other corporations have used inflation as an excuse to raise prices.
As companies work to navigate pricing pressures and supply-chain disruptions before the holiday rush, Walmart and Target are reminders of how the inflation story is playing out differently across corporate America.
2. Sliding oil prices are proving a slight tonic for investors’ inflation headache. US stocks are up after being rattled by a warning from Yellen that the government will run out of money within a month. Here are the latest moves on the market.
3. 2022 will be ‘the year of the stock picker’ as index gains stall, according to Morgan Stanley. The bank is warning returns for stock indices next year will be lackluster — but investors can buoy their portfolios with high-quality growth stocks. Here are the 27 companies it’s most bullish on.
4. Earnings on deck: Alibaba, JD.com, and Workday, all reporting.
5. JPMorgan: The S&P 500 will hit 5,000 early next year as global supply chain pressures ease. Once supply chain delays clear up, companies will see continued revenue growth and record margins. Goldman Sachs also raised its 2022 market forecast — here’s why.
6. “The Chinese Warren Buffett” just revealed a $245 million stake in Berkshire Hathaway. Li Lu’s Himalaya fund bought 900,000 of Berkshire’s “B” shares last quarter, making it Himalaya’s third-most valuable holding. Get the details here.
7. Shares of Rivian saw a steep drop, snapping their post-IPO win streak. Yesterday marked the EV maker’s first day down as a public company after five consecutive daily gains. Enthusiasm around EVs remains high — and investors are hoping for a Tesla-esque returns from upstart electric car makers.
8. Los Angeles’ Staples Center will be renamed Crypto.com Arena. Crypto.com’s namesake token saw a big jump following the purchase of the naming rights. The $700 million move makes it one of the most expensive renaming deals in sports history.
9. A 20-year market veteran likes bitcoin more than ethereum as a near-term bet. Inflation is helping bitcoin because people see the coin as a better hedge, according to Nick Cawley of DailyFX. He shared the five altcoins he’s eyeing as the crypto market surges.
10. Luxury goods and digital fashion could offer an alternative route into the NFT market. Morgan Stanley broke down the overlap between the two industries, pointing to the potential link between the metaverse and luxury NFTs. The bank highlighted one specific stock positioned to boom.
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