Trump Pulls Ahead In Battleground States

Trump Pulls Ahead In Battleground States

As of Oct. 14, 2024, polling averages aggregated by website RealClear Polling show that Republican candidate Donald Trump has caught up in battleground states ahead of the U.S. presidential election in November.

Democratic contender Kamala Harris led her opponent by 0.3 percentage points only in the state of Wisconsin most recently.

Statista’s Katharina Buchholz reports that approximately one month ago, the website had seen Harris and Trump ahead in three battleground states each, while another one was rated as tied.

Right now, the biggest lead for Trump was reported from Arizona with a margin of 1.1 percentage points, while other leads – for example in Georgia, Nevada, North Carolina and Pennsylvania – were much smaller.

Harris leading only in Wisconsin is the equivalent of 10 electoral votes while Trump would collect 83 in this scenario.

Infographic: Trump Pulls Ahead in Battleground States | Statista

You will find more infographics at Statista

The source also calculates how many electoral votes in the 2024 election are expected to come from states usually voting Democratic or Republican and likely/leaning to vote Democratic or Republican.

Here, Harris has 215 votes (including 76 likely/leaning ones), while Trump has 219 votes (126 likely/leaning).

Harris would therefore have to carry slightly more of battleground votes to reach an electoral college majority, which in this calculation include an additional 10 from Minnesota and one from Nebraska’s second district.

The prediction markets are much more clear on who they think will win…

Source: Bloomberg

But just as polls are open to manipulation, the lower liquidity in the prediction markets leaves them open to billionaires pushing and pulling.

With that said, however, Trump’s recent dominance is broad-based and if it was a certain ‘world’s richest man’ pushing the market around, why wouldn’t Soros and his pals push back?

Tyler Durden
Tue, 10/15/2024 – 17:20

via ZeroHedge News https://ift.tt/S50BvTO Tyler Durden

Michigan Judge Accepted Donation From Secretary Of State While Considering Her Appeal

Michigan Judge Accepted Donation From Secretary Of State While Considering Her Appeal

Authored by Steven Kovac via The Epoch Times (emphasis ours),

A Michigan State Supreme Court justice accepted an $82,500 donation earlier this year from a PAC tied to Michigan Secretary of State Jocelyn Benson, at a time when the seven-member Supreme Court was deciding an appeal filed by Benson.

The Hall of Justice building in downtown Lansing, Mich., on Aug. 17, 2018. The building is home to the Michigan Supreme Court. Shutterstock

The campaign committee for State Supreme Court Justice Kyra Harris Bolden reported receiving the donation on May 17, 2024. The source of the donation, Legacy PAC, was founded and operated by Benson. Campaign finance reports show that an $82,500 donation was given on April 26, 2024, to the Keep Kyra Harris Bolden for Justice committee.

At the time, Bolden sat on the seven-member bench deciding an appeal Benson filed on Nov. 30, 2023.

On Aug. 28, 2024, Bolden filed the 5–2 majority opinion that granted Benson’s appeal. Republican election integrity advocates believe the decision will eliminate effective oversight of the conduct of elections by poll challengers.

The state Supreme Court ruling overturned a decision by the Michigan Court of Claims, and a subsequent 3–0 Michigan Court of Appeals ruling upholding the lower court’s decision, that Benson’s restrictive guidance regarding poll challengers violated state law and, therefore, had to be modified.

Benson’s loss in the Michigan Court of Appeals was the sixth legal defeat since 2020 involving her administration of statewide elections.

Calls for an Ethics Probe

On Oct. 1, election integrity activist Braden Giacobazzi and former state Sen. Patrick Colbeck, both Republicans, sent a formal request for an investigation of Bolden to the Judicial Tenure Commission, a panel that oversees the conduct of judges.

Giacobazzi and Colbeck asked the commission to look into the propriety of the Michigan Legacy PAC campaign donation.

Bolden, a Democrat, is a former state representative and criminal defense attorney from the Detroit area. She ran unsuccessfully for a seat on the Michigan Supreme Court in November 2022.

Just weeks after that election, Bolden was appointed by Gov. Gretchen Whitmer, a Democrat, to serve for a portion of the unexpired term of retiring Justice Bridget McCormack, a Democrat.

Bolden is running in the upcoming Nov. 5 election to retain her position until Jan. 1, 2029.

Democrats currently control the state Supreme Court 4–3.

In a statement on X, Colbeck posted the complaint which alleged that Bolden’s acceptance of the $82,500 campaign contribution from a defendant in a case that was currently before the court “has all the indications of a bribe intended to influence the decision of the court.”

The Michigan Code of Judicial Conduct states that a judge should uphold the integrity and independence of the judiciary, avoid impropriety and the appearance of impropriety in all activities, and perform duties impartially.

Bolden’s office referred inquiries to the spokesman for the Michigan Supreme Court, John Niven, who declined to comment.

On Oct. 11, Colbeck also submitted a request for an investigation of Benson, who is a lawyer, to the State of Michigan Attorney Grievance Commission, a group that oversees the ethics of lawyers.

In his request for investigation, Colbeck alleged Benson’s campaign donation to a Michigan Supreme Court Justice at a time when the court had a lawsuit with Benson as a defendant before it “constitutes a serious ethics violation and misconduct as a member of the Michigan Bar Association.”

Colbeck alleged that Benson’s “repeated violations” of MCR 9.104(3) and American Bar Association Rule 8.4: Misconduct, which seeks to maintain the integrity of the legal profession, were sufficient grounds to warrant her disbarment.

Under Michigan Court Rules 9.104(3), an attorney may be disciplined for conduct that is “contrary to justice, ethics, honesty or good morals.”

Benson did not respond to a request for comment.

The Michigan Legacy PAC could not be reached by phone or email. Its website lists a Detroit P.O. Box as the PAC’s address.

The website said, “Our goal at Michigan Legacy PAC is to keep working and fighting together to ensure we build the infrastructure necessary to win the battle for democracy.”

Tyler Durden
Tue, 10/15/2024 – 15:20

via ZeroHedge News https://ift.tt/0UYngZP Tyler Durden

Stagflation Odds Jump In Latest NY Fed Survey As Inflation Expectations Rise, Delinquency Fears Hit 4 Year High

Stagflation Odds Jump In Latest NY Fed Survey As Inflation Expectations Rise, Delinquency Fears Hit 4 Year High

In recent weeks, we have discussed on multiple occasions (here, here and here) how in his desire to get Kamala Harris re-elected by rushing out a jumbo cut before November 5, Fed president Jerome Powell may have triggered the second coming of the Arthur Burns “galloping inflation” Fed, and sure enough recent inflationary prints have certainly raised the threat that the Fed is now aggressively easing even as inflation has not only not been defeated, but is once again rising.

Then overnight, it was Deutsche Bank’s chief credit strategist Jim Reid who observed that US 5yr inflation swaps have seen their “largest 5-week climb since just before SVB’s collapse in March 2023, an event that shifted the narrative away from around 4 more hikes to imminent cuts for a period of time.”

To be fair, it’s not just the 50bps Fed easing in itself that has changed the inflation and rates outlook over the last few weeks. We’ve also seen 1) expectations that the ECB will move more aggressively; 2) renewed geopolitical risk and a potentially large China stimulus turn the Oil price (and other commodities) higher after a late summer slump; 3) a bumper payrolls report; and 4) still generally firm US data, including an upside surprise in the CPI last week.

Then again, these are all dynamics that the Fed should have considered before it launched an aggressive easing cycle at a time when stock prices are at all time highs, when wage inflation ~5%…

… and when home prices are still rising at a mindblowing 6%!

It is therefore not surprising that the latest monthly survey of consumer expectations from the NY Fed found that inflation expectations rose at both the three-year horizon (from 2.5% to 2.7%) and the five-year horizon (from 2.8% to 2.9%), and remained unchanged at the one-year horizon (where they are driven primarily by recent moves in gas prices).

And the reason why the short-term inflation expectations were unchanged – if at the Fed’s raised inflation target of 3% – is because the median respondent saw gasoline up “only” 3.4% over the next 12 months, the least in two years. Expected food inflation ticked higher after falling in August to the lowest level since pre-pandemic, while expectations for rental inflation moderated to 6.3%. Median home price growth expectations decreased by 0.1 percentage point to 3.0%. Some other year-ahead commodity price expectations: an increase of 0.1% for food to 4.5%, college prices remained unchanged at 5.9%; medical care cost expectations dropped by 1.4% to 6.6% (the lowest reading since February 2020).

And while inflation expectations rose, sentiment about the broader economy deteriorated as perceptions among households that they might become delinquent on debts increased last month to the highest levels since April 2020.  The anticipated probability of missing a minimum debt payment over the next three months rose to 14.2% in September, marking the fourth straight month of increases; the increase was most pronounced for respondents between ages 40 and 60 and those with annual household incomes above $100k.

The latest data confirms the view that the US economy is becoming increasingly split as some households do well while others are getting crushed by rising prices, slower growth and higher unemployment. In other words, stagflation. 

While the orchestrated surge in the stock market – and one has the Fed’s recent rate cut to thank for that – has helped propel overall household net worth to a record over the past few months, tens of millions of Americans do not own any equities and have instead been accumulating debt in recent years amid elevated interest rates.

The increased odds of delinquency were mirrored in a broader deterioration of perceptions about households’ current financial situations, with fewer consumers reporting being better off and more reporting being worse off than a year ago, according to the survey.

Sticking with the stagflation theme, year-ahead household income and spending growth expectations declined by 0.1 percentage point to 3.0 percent and 4.9 percent, respectively.

There was slightly more cheer in consumers’ labor market expectations, where the probability of leaving one’s job voluntarily in the next twelve months increased to 20.4% from 19.1%, and the mean perceived probability of finding a job in the event of job loss increased to 52.7% from 52.3% in August.

Hilariously, median year-ahead expected growth in government debt declined by 1.1 percentage points to 8.0%, reaching the measure’s lowest level since February 2020. Spoiler alert: it will be much, much higher.

And confirming that many of the respondents are absolutely clueless, the mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now decreased by 1.5 percentage points to 25.1%. Yes, about 25% of households have no idea that the Fed is now cutting rates and rates on savings accounts will be much lower in 12 months… unless of course we get hyperinflation in the next 3-9 months and the Fed panics into a hiking frenzy

Last but not least, the mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.0 percentage point to 40.3%. It was unclear how many bulls also expected lower rates in the coming year.

Overall, an ugly, stagflationary survey, and hardly what the Fed may have expected to see several weeks into the first easing cycle since the global economy was shut down by a genetically engineered flu virus in 2020.

Tyler Durden
Tue, 10/15/2024 – 15:00

via ZeroHedge News https://ift.tt/X7ptzOd Tyler Durden

Walgreens Jumps Most In Years After Better-Than-Expected Earnings, Outlook, & Widespread Store Closures

Walgreens Jumps Most In Years After Better-Than-Expected Earnings, Outlook, & Widespread Store Closures

Walgreens shares in New York surged the most in 16 years on Tuesday after the struggling pharmacy chain delivered an unexpectedly optimistic forecast for 2025. Simultaneously, Walgreens announced plans to shutter over a thousand stores nationwide as its turnaround plan gains steam. 

Fourth-quarter earnings were 39 cents, beating the Bloomberg consensus of 36 cents. This indicates that the struggling drugstore chain is executing on its aggressive cost-cutting measures in an ambitious turnaround plan after years of pain.

Here’s a snapshot of the quarterly results (courtesy of Bloomberg):

  • Adjusted EPS 39c vs. 67c y/y, estimate 36c
  • International sales $5.97 billion, +3.2% y/y, estimate $5.84 billion
  • Sales $37.55 billion, +6% y/y, estimate $35.56 billion
  • Adjusted gross margin 16.9% vs. 18.6% y/y, estimate 17.6%
  • US Retail Pharmacy Sales $29.47 billion, +6.5% y/y, estimate $27.48 billion
  • US Healthcare Sales $2.11 billion, +7.2% y/y, estimate $2.15 billion
  • Adjusted gross profit $6.33 billion, -4% y/y, estimate $6.24 billion
  • Adjusted operating income $424 million, -38% y/y, estimate $396 million

With the fourth quarter print not so bad, Walgreens issued profit guidance for 2025 that was in line with the average analysts tracked by Bloomberg:  

  • Sees adjusted EPS $1.40 to $1.80, estimate $1.73 (Bloomberg Consensus)
  • Sees sales $147 billion to $151 billion, estimate $146.9 billion
  • Sees adjusted operating income $1.6 billion to $2.0 billion, estimate $1.89 billion

CEO Tim Wentworth wrote that the “turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term.”

Walgreens also announced that 14% of its US stores, or around 1,200 locations, will close over the next three years. About 500 of those stores will close in 2025.

In June, the drugstore chain announced that 300 underperforming locations would close as part of the turnaround plan. It also noted about a quarter of all stores were unprofitable and would usher in “imminent” changes.

Here’s analyst commentary about Walgreens’s ER and turnaround plan:

Leerink Partners, Michael Cherny (market perform, PT $9)

  • Says WBA’s FY25 guidance “needs more details from the upcoming deck on the full breakdown from revenue guidance to EPS guidance”
  • The updated commentary on the store closure plan is a start, although further visibility into the makeup of the closures is going to be another focus
  • “All-in, the FY4Q’24 print and FY25 guidance was not as bad as it could have been, which is somewhat of a positive relative to recent trends”

Evercore ISI, Elizabeth Anderson (in line, PT $7.50)

  • Says WBA finished its FY24 on a relative high note, with strong pharmacy comp sales
  • “US Healthcare adj op margin was also positive (first time!) as the company continued to make progress on both GMs and OpEx”

Barclays, Stephanie Davis (underweight, PT $7)

  • Calls the 2025 guidance “better than feared”

Jonathan Palmer, an analyst with Bloomberg Intelligence

  • “The decisive decision to shutter a large cohort of underperforming stores is a positive in a narrative where the expectations are exceedingly low.” 

WBA shares jumped as much as 15% in markets—the most in 16 years. Shares peaked at the $96 handle in August 2015 and have since tumbled 91%. The latest downward pressure comes from budget-conscious consumers. 

We wonder how many of the Walgreens stores slated to close next are in lawless progressive cities. 

Sigh.  

Tyler Durden
Tue, 10/15/2024 – 13:40

via ZeroHedge News https://ift.tt/iBe7CkF Tyler Durden

Harris-Walz: “The Most Anti-Free-Speech Ticket In Centuries”

Harris-Walz: “The Most Anti-Free-Speech Ticket In Centuries”

Authored by Jonathan Turley,

Roughly five centuries ago, a new dance first reported in Augsburg, Germany was promptly dubbed the “waltz” after the German term for “to roll or revolve.”

Today, there is no more nimble performer of that dizzying dance than Democratic vice presidential nominee Tim Walz.

Indeed, “Walzing” has become the Minnesota governor’s signature political two-step after his controversial statements on his allegedly socialist viewseliminating the electoral college and other topics.

On Sunday, Walz’s dance partner was Fox News host Shannon Bream, who seemed to be fighting vertigo as the candidate tried to deflect his shocking prior statements on free speech.

Bream asked Walz about his prior declaration that there is “no guarantee to free speech on misinformation or hate speech”— a statement that runs counter to decades of Supreme Court decisions.

Walz notably did not deny or retract his statement. Instead, his interview ironically became itself a flagrant example of misinformation.

First of all, misinformation and hate speech are not exceptions to the First Amendment: Whether it is the cross burnings of infamous figures like KKK leader Clarence Brandenburg or the Nazis who marched in Skokie, Ill., hate speech is protected.

Yet both Harris and Walz are true believers in the righteousness of censorship for disinformation, misinformation and malinformation.

The Biden administration defines misinformation as “false, but not created or shared with the intention of causing harm” — meaning it would subject you to censorship even if you are not intending harm.

It defines malinformation as “based on fact, but used out of context to mislead, harm, or manipulate.”

So you can post “true facts,” but would still be subject to censorship if you are viewed as misleading others with your pesky truth-telling.

Furthermore, “book bans” are not equivalent to the Harris-Walz censorship policies.

After years of supporting censorship and blacklisting, Democrats are attempting to deflect questions by claiming that the GOP is the greater threat.

“We’re seeing censorship coming in the form of book bannings in different places,” Walz told Bream.

“We’re seeing attempts in schools.”

First, a reality check: The Biden-Harris administration has helped fund and actively support the largest censorship system in our history, a system described by one federal court as “Orwellian.”

These are actual and unrelenting efforts to target individuals and groups for opposing views on subjects ranging from gender identity to climate change to COVID to election fraud.

While Walz and others rarely specifically reference the book bans in question, Florida is one state whose laws concern age limits on access to graphic or sexual material in schools.

School districts have always been given wide latitude in making such decisions on curriculum or library policies. Indeed, while rarely mentioned by the media, the left has demanded the banning or alteration of a number of classic books, including “To Kill a Mockingbird” and “Of Mice and Men,” under diversity or equity rationales.

I have long opposed actual book bans perpetrated by both the left and the right. However, school districts have always made such access and curriculum decisions.

Finally, Walz and others often sell censorship by citing the dangers of child pornography or of threats made against individuals.

Walz on Sunday followed Hillary Clinton’s recent pro-censorship campaign as he employed such misdirection.

“The issue on this was the hate speech and the protected hate speech — speech that’s aimed at creating violence, speech that’s aimed at threats to individuals,” he claimed.

“That’s what we’re talking about in this.”

First, he’d said there is no protected hate speech.

Second, the law already provides ample protections against threats toward individuals.

What’s most striking is that, after years of unapologetically embracing censorship (often under the Orwellian term “content moderation”), the left does not seem to want to discuss it in this election.

Democrats in Congress opposed every major effort to investigate the role of the Biden administration in the social-media censorship system it constructed. Many denied any such connection.

Elon Musk ended much of that debate with the release of the Twitter Files showing thousands of emails from the administration targeting individuals and groups with opposing views.

Now the public is being asked to vote for the most anti-free speech ticket in centuries — but neither Harris nor Walz want to talk about it in any detail.

The result may be the largest bait-and-switch in history.

Walz, Clinton and others also falsely claim they are simply trying to stop things like child pornography — which is already covered by existing criminal laws.

But what many on the left want is to regain what Clinton called their loss of “control” over what we are allowed to say or hear on social media.

Make no mistake about it: The “Walzing” of free speech is one dance you would be wise to decline.

Otherwise, do not be surprised if, when the music stops, you find yourself without both your partner and your free speech.

*  *  *

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University and the author of “The Indispensable Right: Free Speech in an Age of Rage.”

Tyler Durden
Tue, 10/15/2024 – 13:20

via ZeroHedge News https://ift.tt/GomSkLN Tyler Durden

Last Time Halloween Shoppers Spent Less, It Was…

Last Time Halloween Shoppers Spent Less, It Was…

The National Retail Federation’s annual Prosper Insights & Analytics survey shows that total Halloween spending is forecasted to drop by 5% to $11.6 billion this year, down from last year’s record $12.2 billion. With inflation still elevated and interest rates sky-high, low- to mid-tier consumers are expected to cut back on seasonal splurges this fall.

The survey asked nearly 8,000 consumers about their Halloween shopping plans in the first week of September. Respondents, on average, said they planned to spend around $103.63, about $4.62 less than last year’s record of $108.24. This means some households (working-poor ones) are reducing purchases of costumes, decorations, and party supplies. 

Additional color on NRF’s survey:

Seventy-two percent of consumers plan to celebrate Halloween this year, consistent with last year’s record of 73%. Top holiday activities include handing out candy (67%), decorating their home or yard (52%), dressing up in costume (49%), carving a pumpkin (43%) and throwing or attending a party (29%).

Slight decline in participation compared with last year. 

“Halloween marks the official transition to the fall season for many Americans, and consumers are eager to get a jump start on purchasing new seasonal décor and other autumnal items,” NRF Vice President of Industry and Consumer Insights Katherine Cullen wrote in a statement, adding, “Retailers are prepared to meet this early demand by offering shoppers all the holiday essentials to make this year’s celebrations memorable.”

Bloomberg noted that NRF’s dismal outlook for the Halloween spending season is yet another “blow for heavily indebted retailers,” adding to the continued pressure on spending slowdowns from low—to mid-tier consumers. 

More from Bloomberg:

“2024 has been a perfect storm for retailers of all stripes,” said Erica Weisgerber, a partner at law firm Debevoise & Plimpton LLP. “Inflation, high operational costs, and reduced consumer spending have been especially challenging for brick-and-mortar retailers, and online retailers have struggled with steep competition from e-commerce giants like Amazon.”

Many of the troubled firms, including Michaels and At Home Group Inc., are owned by private equity managers after buyouts during the pandemic proved ill-timed when interest rates rose and inflation crimped household budgets. Home, clothing and hobby retailers dominate the list of distressed retailers because the size of their debt means they lack the liquidity to compete with better capitalized competitors, according to Moody’s Ratings.

The bigger picture is that the dismal Halloween spending outlook may indicate a continued souring consumer environment that worsens from here. And this could be a bellwether for the big holiday spending season, which kicks off on Black Friday and Cyber Monday in late November.

Tyler Durden
Tue, 10/15/2024 – 11:40

via ZeroHedge News https://ift.tt/i7OxLEo Tyler Durden

Time Magazine Owner Blasts Harris For Rejecting Interview Requests

Time Magazine Owner Blasts Harris For Rejecting Interview Requests

Via HeadlineUSA.com,

The owner of Time magazine blasted Vice President Kamala Harris for rejecting multiple interview requests from the prominent left-leaning publication ahead of November’s election.

Marc Benioff, the billionaire co-founder of Salesforce, bought Time magazine in 2018. He noted that since he’s been in charge of the publication, every presidential candidate has agreed to sit down for interviews during their campaigns, including former President Donald Trump and President Joe Biden.

Harris, however, has rebuffed every one of the magazine’s interview requests.

“Despite multiple requests, TIME has not been granted an interview with Kamala Harris — unlike every other Presidential candidate,” Benioff wrote on X.

“We believe in transparency and publish each interview in full,” he continued. “Why isn’t the Vice President engaging with the public on the same level? #TrustMatters #TransparencyMatters #Leadership.”

Despite Harris’s rejections, Time magazine published another predictably glowing profile of Harris on Friday.

The magazine published a similar puff-piece about Harris in August, after the vice president took over the top of the Democratic ticket. Harris also refused to speak to Time then.

For most of her campaign, Harris has avoided the media. In the past couple of weeks, however, Harris has opted to appear on friendlier shows, including The ViewThe Howard Stern Show and The Late Show with Stephen Colbert.

The result has been a cataclysmic drop in the polls for Harris, who is now in a dead-heat with Trump, according to the latest NBC polls.

The poll marks a five-point drop for Harris from NBC’s last poll in September, which found her leading Trump 49% to 44%.

“As summer has turned to fall, any signs of momentum for Kamala Harris have stopped,” said Democratic pollster Jeff Horwitt, who conducted this survey with Republican pollster Bill McInturff. 

Horwitt noted that Harris’s initial refusal to sit down for interviews likely hurt her, since voters still have significant questions about her campaign and its proposals.

“The challenge for Kamala Harris: Can she meet the moment and fill in the blanks that voters have about her?” he said.

She is scheduled to be interviewed by Fox News host Bret Baier later this week, in what could prove to be her biggest challenge yet.

Although the appearance that Harris is losing momentum may be a negative, it could also be the latest leg in her astroturfed three-month-old campaign with early voting now open in many swing states. The perception that she is tied or trailing may help drive more Democrats to the polls in advance of Election Day.

Tyler Durden
Tue, 10/15/2024 – 11:20

via ZeroHedge News https://ift.tt/5ELQy9d Tyler Durden

Bank of America Trading Results Beat As Net Interest Yield Hits Cycle Lows, Charge-Offs Unexpectedly Hit 11 Year High

Bank of America Trading Results Beat As Net Interest Yield Hits Cycle Lows, Charge-Offs Unexpectedly Hit 11 Year High

It wasn’t just Goldman Sachs that reported better than expected Q3 earnings this morning: on the surface, Bank of America surprised to the upside as well, and in fact its FICC division reported an even better results than Goldman’s. The bank, which had gotten Warren Buffett’s seal of disapproval, after the billionaire investors dumped much of his shares in what was once a Top 5 position, performed better than expected as it benefited from volatile markets while net interest income topped analysts’ estimates. On the other hand, there were also quite a few red flag, with the company’s Net Interest Yield sliding to a cycle low even as charge offs and credit losses jumped to the highest in years.

Here is a snapshot of what BofA reported in Q3:

  • Revenue net of interest expense $25.35 billion, beating estimate $25.27 billion
    • Trading revenue excluding DVA $4.94 billion, beating estimate $4.57 billion
      • FICC trading revenue excluding DVA $2.94 billion, beating estimate $2.77 billion
      • Equities trading revenue excluding DVA $2.00 billion, beating estimate $1.81 billion
    • Investment banking revenue $1.40 billion, beating estimate $1.24 billion
    • Wealth & investment management total revenue $5.76 billion, beating estimate $5.63 billion
  • EPS $0.81, beating estimates of $0.77

Taking a closer look at the Global Markets group, revenue from equity and fixed income, currencies and commodities trading rose 12% to $4.93 billion in the third quarter:

  • FICC revenue increased 8%, to $2.9BN, beating estimates of $2.8BN, “driven primarily by improved client activity and trading performance in currencies and  interest rate products”
  • Equities revenue increased 18%, to $2.0BN, beating estimates of $1.8BN “driven by strong client activity and trading performance in cash and derivatives”

Similar to Goldman, BofA’s investment banking also outperformed expectations, a sign that the long-awaiting rebound in dealmaking is taking hold. The company benefited from “year-over-year growth in investment banking and asset management fees, as well as sales and trading revenue,” CEO Brian Moynihan said in the statement.

Investment-banking revenue rose 15% to $1.40Bn, better than analysts expected amid renewed strength in dealmaking. Fees for advising on mergers and acquisitions fell 14%, less than the almost 24% decline analysts had expected. Revenue from equity and debt issuance increased 16% and 37%, respectively.

Not everything was stellar however: the second-largest US bank said that net interest income, a key source of revenue for the company, fell 2.9% to $14 billion, the lowest of the cycle; still this was better than the 3.4% drop analyst had expected (on an FTE basis, NII was $14.11 billion, also better than the estimate of $14.07 billion). The number increased $0.3B from 2Q24, driven by fixed-rate asset repricing, higher NII related to Global Markets (GM) activity, and one additional day of interest accrual, partially offset by higher deposit costs; it also decreased $0.4B YoY, as higher deposit costs more than offset higher asset yields, higher NII related to GM activity, and loan growth. Overall, BofA’s net interest yield came in at 1.92%, down both sequentially and YOY, and just below the estimate 1.93%. And now that the Fed is cutting rates again, that’s as good as it gets for BofA’s NII.

 

It wasn’t just the Net Interest Yield that left much to be desired: similar to JPM, BofA’s provision for credit losses unexpectedly rose to the highest in years, and was $1.54 billion in Q3, higher than the $1.53 billion estimates with a Q3 net reserve build of $8MM in 3Q24 vs. net reserve release of $25MM in 2Q24; This was the highest since the covid crash!

Charge offs also rose to $1.534 billion, above the $1.5 billion estimate and a 0.58% charge off ratio. This may come as a surprise to anyone looking at the stock which is still up, if not for long, and thinking that the results were somehow much better than expected.

According to the bank, commercial net charge-offs of $490MM increased $16MM; this was driven by commercial and industrial NCOs which increased $111MM, driven by two borrowers; at the same time commercial real estate NCOs declined $101MM.

 

On the spending side of the income statement, things were generally in line with expectations:

  • Non-interest expenses $16.48 billion, estimate $16.49 billion
  • Compensation expenses $9.92 billion, estimate $9.9 billion

Here is some other data:

  • Return on average equity 9.44%, estimate 9.01%
  • Return on average assets 0.83%, estimate 0.78%
  • Return on average tangible common equity 12.8%, estimate 12.2%
  • Basel III common equity Tier 1 ratio fully phased-in, advanced approach 13.5%, estimate 13.5%
  • Standardized CET1 ratio 11.8%, estimate 11.9%

Looking at the balance sheet, we find:

  • Loans $1.08 trillion, estimate $1.07 trillion
  • Total deposits $1.93 trillion, estimate $1.93 trillion

Shares of Bank of America, which gained 24% this year through Monday, climbed 1.4%, but were well off session highs, and we expect it to close red as investors override the euphoria algo kneejerk reaction.

BofA Q3 investor presentation below (pdf link)

Tyler Durden
Tue, 10/15/2024 – 11:00

via ZeroHedge News https://ift.tt/mW1RsXh Tyler Durden

Empire Fed Manufacturing Crashes From 30-Month High To 5-Month Low…

Empire Fed Manufacturing Crashes From 30-Month High To 5-Month Low…

After nine straight months of ‘contraction’, September’s surge to 30-month highs in the Empire Fed’s Manufacturing survey was greeted by all as proof that Bidenomics (or something…) was working and everything was awesome once again… so vote for Kamala…

October is a very different matter as the survey crashed from +11.5 to -11.9 – the lowest since May. That is the biggest MoM drop since January…

Source: Bloomberg

A measure of current new orders plunged nearly 20 points to -10.2 after climbing a month earlier to the highest since April 2023.

The index of shipments decreased almost 21 points to minus 2.7.

The employment index, however, rebounded to 4.1 – the first expansion in a year – while a measure of hours worked also climbed.

Meanwhile, the New York Fed’s gauge of prices paid for materials increased to a six-month high of 29, while an index of prices received by state manufacturers also accelerated.

Finally, to add further confusion, at the same time, the six-month outlook for overall activity increased to a three-year high of 38.7, indicating the state’s manufacturers are more upbeat about the economy’s prospects.

…baffle ’em with bullshit is back.

Tyler Durden
Tue, 10/15/2024 – 08:43

via ZeroHedge News https://ift.tt/PdEQnLb Tyler Durden

Boeing Desperate For Liquidity, Files $25 Billion Shelf Registration

Boeing Desperate For Liquidity, Files $25 Billion Shelf Registration

Just days after Boeing announced plans to cut 10% of its workforce due to intensifying financial pressure, such as dwindling cash reserves and mounting risk of a credit downgrade, as well as a drawn-out strike, the beleaguered planemaker filed a $25 billion shelf registration on Tuesday morning. 

“This universal shelf registration provides flexibility for the company to seek a variety of capital options as needed to support the company’s balance sheet over a three-year period,” Boeing wrote in the filing. 

Separately, Boeing entered into a $10 billion “supplemental credit agreement” with a consortium of lenders. It noted that the credit facility provides “additional short-term access to liquidity as we navigate through a challenging environment,” adding that it has not drawn down on this facility or its existing credit revolver. 

Sources familiar with the situation told WSJ that Boeing is expected to pursue a stock offering of about $10 billion. 

The company has not turned a profit since 2018 and has already burned through $1 billion in the monthlong strike. At the end of September, it had $10.3 billion in cash and securities, around the minimum amount needed to operate. It also has $45 billion in net debt.

The latest strike estimates from JPMorgan analysts indicate Boeing will lose $1.5 billion each month if workers stay off the production lines of commercial jets and continue picketing in the streets. Three major rating agencies have warned that the strikes could downgrade Boeing’s investment-grade credit rating to speculative territory, in other words, ‘junk.’ 

Last month, CFO Brian West told analysts at the Morgan Stanley conference that Boeing “will take any necessary actions” to preserve its investment grade rating and beef up its balance sheet. 

“We are perfectly comfortable to supplement our liquidity position to support those two objectives,” West told investors when asked about future money raises. 

Last week, Goldman analysts Noah Poponak and Anthony Valentini told clients:

“The company faces a balance sheet question, and has suggested raising capital is possible given the importance of the credit rating. We assume Boeing raises $12bn of equity before year-end, which matches the total maturities due in 2025 + 2026, and keeps the cash balance well north of $10bn in the near-to-medium-term while they ramp back up commercial deliveries and strive to resolve defense profitability.”

On Friday, the CEO penned a memo to employees about coming reductions of executives, managers, and employees (as much as 10% of its 171k workforce), warning that:

“Our business is in a difficult position, and it is hard to overstate the challenges we face together.”

According to preliminary figures, Boeing expects to report third-quarter revenue of $17.8 billion and a loss per share of $9.97.

Meanwhile, Boeing’s latest talks with its union to resolve 33,000 striking employees at its main Seattle-area facilities imploded early last week, prompting S&P Global Ratings to place the aircraft manufacturer on CreditWatch negative, with mounting risks that its investment-grade credit rating would be slashed to junk. 

In markets, Boeing shares are up about 1% following the news of the shelf registration. On the year, shares are down 43%, trading around $148-$150 handle. 

Dilution fears are here.

Tyler Durden
Tue, 10/15/2024 – 08:15

via ZeroHedge News https://ift.tt/jXd6QB5 Tyler Durden