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September Brings a Reality Check for Stocks [WSJ]
The S&P 500 has fallen almost 3% over the past week, driven by shares that are directly exposed to economic growth and retail sales. The “consumer discretionary” sector is down 4%.... Overall, investors can take some solace from a market that, with some notable exceptions, has kept in touch with corporate news. But a 1.7% rise in the S&P 500 during the worst one-off economic hit in recent history still merits some soul-searching as to whether the rally has gone too far, given the unusual risks to which some sectors’ earnings estimates are subject to right now.
This month’s setback could be a cheap price to pay to keep the market grounded.

United Wholesale Mortgage Goes Public in Biggest SPAC Deal Ever [WSJ]
The Gores SPAC will take only a small percentage of the new company in this deal, leaving current United Wholesale Mortgage owners with a 94% stake…. United Wholesale Mortgage, which is based in Michigan, works with independent brokers around the U.S. to underwrite and service mortgages. So far, the company is on track to underwrite nearly $200 billion of mortgages this year, up from roughly $108 billion in 2019, amid record low interest rates as the U.S. Federal Reserve takes aggressive steps to cushion the economy from the effects of the pandemic.

US regulator welcomes water futures as tool to manage climate risk [FT]
CME, which operates the Chicago futures exchange, last week said that it would begin trading the world’s first future contracts for water, tied to prices in California.
The contracts are “a really good thing,” [CFTC Commissioner Rostin] Behnam told the Financial Times. Water derivatives and other investment products linked to environmental, social and governance factors will “help stakeholders manage the risk that is going to continue to present itself to us,” he added.

Elliott and Veritas Capital submit offer for Cubic –sources [Reuters]
On Monday, Cubic announced it adopted a poison pill after Elliott took a 15% stake in the firm and expressed interest in acquiring the company with a private equity partner…. Cubic makes technology that helps major subway systems collect fares as well technology for the defense industry, areas that are largely dependent on government spending.

Nikola founder Trevor Milton deletes Twitter account amid fraud claims [N.Y. Post]
As recently as Sept. 10, Milton had put out a defiant tweet promising to defend his reputation.
“Coward’s run,” Milton tweeted, “leaders stay and fight for integrity.”

Elon Musk Promises a $25,000 Tesla in 3 Years—Again [Wired]
Musk has never been one to underpromise and overdeliver. He told an interviewer in 2018 that Tesla could roll out a $25,000 EV in three years. Tuesday, he pushed that deadline back by two years—because, Musk said, it’s a challenging goal….
Tuesday’s battery presentation was filled with plenty of hedging, with Musk and company warning many times that the technology they were presenting would likely take years to implement. Despite sharing plenty of details about its newest battery breakthrough, the company didn’t show off a prototype. Observers noted the slightly subdued tone, a contrast to the bombastic presentations and projections that have occasionally gotten the company in trouble with public officials.

What CEOs Really Think About Remote Work [WSJ]
“We tried it…It’s just not the same. You just cannot get the same quality of work.”
“In all candor, it’s not like being together physically. And so I can’t wait for everybody to be able to come back into the office. I don’t believe that we’ll return to the way we were because we’ve found that there are some things that actually work really well virtually.”
“There’s sort of an emerging sense behind the scenes of executives saying, ‘This is not going to be sustainable.’”

Are markets in a bubble because traders live in one? [FT]
The definition of a bubble — a cut-off world isolated from diverse interaction or plurality of views — reminded me of the market professionals I encountered in 20 years as a hedge fund investor. I met exactly one other female partner. Most investment teams look like male Ivy League rowing crews…. Outsiders are not only rare, but often disregarded. While in a meeting where everyone else was male, I once corrected a participant who had erroneously valued an interest rate option as worthless. It wasn’t worthless, I said, merely out of the money. “You are a woman, I am a man,” he said. “Let's not debate….”
Generating uncorrelated returns, or “alpha”, requires differentiating yourself from the herd. Surely that is easier for a diverse group of people to do. The alternative is a community sealed in a bubble, woefully unprepared to recognise irrational exuberance.


grand tetons

Opening Bell: 8.24.21

Jackson Hole calling (virtually); another space SPAC; China troubles; Elon Musk thinks Elon Musk’s self-driving software sucks; and more!

Larry Kudlow Returns

Opening Bell: 7.27.20

COVID checks; SPACs splash out; Manhattan still deserted; the Maureen Dowd-Elon Musk interview no one needed or asked for; and more!

By AntanaCoins (Own work) [CC BY-SA 3.0], via Wikimedia Commons

Opening Bell: 10.13.20

Fodder for China virus conspiracy theories; not-so-Perfect Home for sale; SPACs SPACs SPACs SPACs; and more!

Bill ackman beach

Opening Bell: 11.19.20

A SPAC-tacular scam; funding for Christmas; AQR’s crash diet; negative rates in China; and more!


Opening Bell: 1.8.21

SoFi SPACs; Wilbur Ross’ replacement; Credit Suisse undershot a bit; and more!

frontier airlines

Opening Bell: 4.1.21

SPAC-up; lamentable listings; Trump cards; and more!


Opening Bell: 2.18.21

Barclays basks; Kim Jong-un coins; SPAC rap; and more!


Opening Bell: 5.19.22

Stocks sink further; SEC strikes StraightPath; S&P shuns Tesla; Shkreli set free; and more!