Wall Street Had a Red-Hot Year, But Can It Last? [WSJ]
Analysts are unconvinced that the banks’ heady pace of deal making can continue. Goldman and Morgan Stanley have minted big trading revenues during the wild pandemic markets, but analysts are still trying to figure out what the new normal in trading looks like…. But some analysts are optimistic that even if business slows, bank stock prices won’t necessarily follow suit. “It’s not a stretch to say Morgan Stanley is an above-average growth story,” said Keith Horowitz, an analyst at Citigroup. He rates the shares as a buy after upgrading them earlier this month, with a new share price target of $115 over the next 12 months.
Five Big Tech Stocks Are Driving Markets. That Worries Some Investors [WSJ]
Five of the biggest stocks in the S&P 500 account for more than half of the broad benchmark’s gain since April, analysts at Goldman Sachs found. Of the S&P 500’s 22% advance this year, those stocks— Microsoft Corp., Nvidia Corp., Apple Inc., Alphabet Inc. and Tesla Inc.—are responsible for around a third…. That has the S&P 500—and the more than $5 trillion that follow it through passive funds—on precarious footing heading into the new year, several analysts and investors said. “If those companies, for whatever reason, stop performing, there’s nothing to support the market,” said Peter Cecchini, director of research at hedge fund Axonic Capital.
With Biden spending plan blocked, economists lower 2022 growth forecasts [Reuters]
"If BBB doesn't become law, the economic recovery will be vulnerable to stalling out if we suffer another serious wave of the pandemic; an increasingly likely scenario with Omicron spreading rapidly," [Moody’s chief economist Mark] Zandi wrote on Twitter on Monday, adding that he expects real GDP growth to be lower by half a percentage point in 2022 if the proposed legislation doesn't become law…. U.S. economic output was expected to slow in the early part of next year from the brisk pace seen at the end of 2021 even before Omicron emerged as a threat to global growth and Biden's spending plan was derailed.
SEC cracks down on SPAC claims as electric truck maker Nikola agrees to pay $125 million to settle fraud charges [CNBC]
SEC officials said they hoped the penalty would serve as a warning to all companies aiming to enter public markets via a merger deal with a special-purpose acquisition company, or SPAC. Specifically, officials said statements from companies hoping to tap public capital markets need to be wholly accurate…. [Founder and former CEO Trevor] Milton’s bogus claims “falsely portrayed the true state of the company’s business and technology,” said Gurbir Grewal, director of the SEC’s Division of Enforcement. “This misconduct — and the harm it inflicted on retail investors — merits the strong remedies today’s settlement provides.”
Elliott and Vista Are Weighing a Joint Bid for Citrix Systems [Bloomberg]
Citrix has been exploring options including a potential sale, Bloomberg News reported in September. Those considerations came as Elliott took a 10% stake in Citrix, its second time investing in the workplace software maker based in Fort Lauderdale, Florida…. Software deals have been rampant this year with both private equity firms and strategic buyers chasing them. On Monday, Oracle Corp. said it would buy Cerner Corp. for $28.3 billion in its largest deal to date.
SenseTime reopens IPO, but excludes US investors [CNN]
Earlier this month, SenseTime had delayed its IPO plans after the US Treasury Department placed the firm on a list of "Chinese military-industrial complex companies," in which US President Joe Biden has banned Americans from investing…. In a statement on Monday, the AI company said that "due to the dynamic and evolving nature of the relevant US regulations, we have required to exclude US investors" from buying shares in the IPO.