Wall Street Today | US Is in Recession 'By Any Definition', Michael Burry Says
MACRO
IMF Chief Georgieva Warns of 'Tough Year' for World Economy
"We expect one-third of the world economy to be in recession," International Monetary Fund Managing Director Kristalina Georgieva told CBS’s 'Face the Nation' in an interview aired Jan. 1.
The IMF already warned in October that more than a third of the global economy will contract and that there is a 25% chance of global GDP growing by less than 2% in 2023, which it defines as a global recession.
US Is in Recession 'By Any Definition', Michael Burry Says
"The US in recession by any definition," Burry, the investor made famous by Christian Bale in the 2015 movie The Big Short, said on Twitter late Sunday. "Fed will cut and government will stimulate. And we will have another inflation spike."
In September, Burry had warned of more pain for the stock market, saying “we have not hit bottom yet.” In the second quarter last year, his firm dumped all of its equity exposure besides one company.
SECTORS
Shift to EVs Triggers Biggest Auto-Factory Building Boom in Decades
The U.S. auto industry is entering one of its biggest factory-building booms in years, a surge of spending largely driven by the shift to electric vehicles and new federal subsidies aimed at boosting U.S. battery manufacturing.
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More Social Media Regulation Is Coming In 2023, Members of Congress Say
Days after Congress passed a bipartisan spending bill banning TikTok from government devices, legislators and advocates say they are looking to further regulate social media companies in 2023.
Congress failed to pass many of the most aggressive bills targeting tech in 2022, including antitrust legislation that would require app stores developed by $Apple (AAPL.US)$ and $Alphabet-C (GOOG.US)$ to give developers more payment options, and a measure mandating new guardrails to protect kids online. Sen. Amy Klobuchar, D-Minn., said bipartisan support exists for many of these bills, and many have made it onto the Senate floor. But she said the tech lobby is so powerful that bills with “strong, bipartisan support” can fall apart “within 24 hours.”
Startups End a Bruising 2022, Stare Down Another Challenging Year
Startups had a dismal year by nearly every measurement in 2022, from plummeting investment to scarce public listings, and data point to a 2023 that could be even more difficult.
As 2022 closed, startup founders and investors were licking their wounds from plunging investment, scant opportunities to turn equity into cash, layoffs and business pivots. The startup industry is now staring down a bleak start to the new year, including signs that valuations have much further to fall, said venture capitalists, bankers and fund managers.
COMPANY
Elon Musk's Tesla Comes Up Short of 2022 Delivery Target as Growth Slows
Elon Musk's electric-vehicle maker said Monday that it delivered about 1.31 million vehicles last year, up roughly 40% from 2021. The company would have needed to hand over more than 1.4 million vehicles to meet its initial goal of increasing deliveries by 50% or more.
$Tesla (TSLA.US)$ signaled in October that it likely would come up short of its target, Wall Street had moderated its delivery expectations. Tesla still fell short of a lowered Wall Street forecast of around 1.34 million deliveries for 2022, according to FactSet.
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Southwest Airlines Says Holiday Meltdown Will ‘Certainly’ Hit Fourth-Quarter Results
$Southwest Airlines (LUV.US)$'s holiday meltdown will “certainly” hit its fourth-quarter results, executives said Thursday, adding it will take several weeks to work through affected travelers’ reimbursement requests. But executives declined to provide an estimate of how much the disruptions will cost the airline in total. A similar incident in October 2021 cost the airline about $75 million, the carrier said last year, but this event lasted longer, with more travelers flying because of the holidays and sharply higher fares.
General Electric Set to Spin Off Health Unit—Putting Focus Back on Power Division
$GE Aerospace (GE.US)$ will start 2023 by splitting off its healthcare unit, completing a key step in the slow-motion breakup of the industrial giant. For the rest of the year it will face questions about the next big step: shedding its power businesses.
GE HealthCare Technologies Inc. will start trading this week, leaving the once-sprawling conglomerate with three divisions: jet engines, natural gas-powered turbines and wind turbines. The gas and wind turbines are expected to be combined with other GE energy businesses into a new company called GE Vernova that will split off in early 2024.
Source: Bloomberg, Dow Jones, CNBC
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