Welcome to 10 Things Before the Opening Bell.
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1. Americans are ramping up spending into the holiday season. The latest Census Bureau report tells us consumer spending in October saw the biggest jump since March, to the tune of $US638.2 ($AU872) billion. The spending spree has not yet buckled under surging prices and COVID-19 fears.
Shoppers are out en masse even as the price of just about everything is going up. Yesterday, Walmart reported strong third-quarter sales, saying it increased prices amid early-holiday shopping. Analysts also expect Target to beat earnings estimates on Wednesday.
The data suggest the economic recovery is gaining momentum, but the general feeling of Americans seems to suggest otherwise. Data shows consumer sentiment just hit a 10-year low, but pessimism over the economy hasn’t prevented people from getting out and spending money, at least for now.
Here are some key numbers:
- Spending at US retailers and restaurants rose 1.7% in October, hitting well above expectations.
- The October jobs report showed the US added 531,000 new payrolls, beating the forecast of 450,000 and furthering the narrative that the labor market has mostly regained its footing.
- The stock market will continue to benefit, as Goldman Sachs estimates US household spending and corporate earnings growth could drive stocks up 10% next year.
All this spending should help propel the economy into 2022 — even as Americans continue to fret over inflation.
2. The retail sales tailwind is giving another lift to US stocks. Over in the UK, inflation shot up to a 10-year high, and that puts a BoE interest rate rise more firmly on the cards. Here are the latest moves on the market.
3. Ivy Zelman told Insider why home prices will tank far sooner than Wall Street thinks. She called the top of the housing market before the 2008 crash, and now Zelman is warning sellers about a coming market shift. “We could see a pretty sizable correction.”
4. Earnings on deck: Target, Nvidia, Cisco, and Lowe’s Companies, all reporting.
5. Tesla has shed around $US200 ($AU273) billion in market value since Elon Musk started selling stock. The Tesla chief has been vocal on Twitter lately, hitting back at critics and calling ‘The Big Short’ investor Michael Burry a “broken clock.” Here’s where Tesla stands now.
6. Saudi Arabia’s sovereign wealth fund has made a fortune on Lucid Motors. The fund now owns about $US46 ($AU63) billion worth of the surging EV company, up from an initial $US1.3 ($AU2) billion investment three years ago. The fund missed out on big gains though by selling its stake in Tesla.
7. AMC’s chief executive said the theatre chain will accept shiba inu coin by next quarter. Soon you’ll be able to buy tickets online with the meme-token, according to a tweet from CEO Adam Aron. The move is the latest example of the AMC CEO’s embrace of meme culture.
8. Meme-stock watch list: Tesla leads the way with the most mentions on Wall Street Bets this week, with newly-public rival Lucid close behind. See the full list of the 10 most talked about stocks on the famous subreddit.
9. UBS explained why beaten-down stocks will shine in early 2022. Growth stocks have outperformed since 2009, but UBS analysts predict this trend will flip in the near future. Here’s how to take advantage of the pattern.
10. TV-famous house-flipper Pace Morby doesn’t think you need large sums of money to get started in real estate investing. For beginners, he recommends working with sellers to get creative with your financing strategy. Here are two strategies he’s using to acquire property without a bank.
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