🗓️ What to watch in 2023

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Markets

Tesla Stock Rallies on Prospect of Elon Musk Stepping Back From Twitter (3 minute read)Tesla Inc. shares jumped in anticipation of Elon Musk potentially stepping back from Twitter Inc., the social media company that has distracted him from running the electric-car maker for months. Tesla’s stock rose as much as 5% at the start of early trading Monday. The shares have plunged 58% since Musk disclosed in early April that he’d taken a stake in Twitter, underperforming the 15% drop in the S&P 500 Index. Musk, 51, tweeted Sunday that he would abide by the results of a poll asking whether he should step down as head of Twitter.

European Shares Seen Opening With Small Gains (2 minute read)European stocks are seen opening slightly higher on Monday despite mounting risks of a global recession. Asian markets traded mostly lower on concerns that a wave of COVID-19 infections sweeping through China will delay any economic recovery in the country. U.S. stock futures currently point to a steady start to the North after three consecutive sessions of losses. The U.S. Commerce Department is due to release its report on personal income and spending this week.

This holiday shopping season isn't looking great for retailers (3 minute read)So there I am on Super Saturday — the final big shopping day before Christmas — at my local Target. My first two thoughts: Why isn’t this store more crowded? And why is there still so much inventory left in this store, especially in seasonal categories such as holiday cards, toys, and party clothing? While this is just one anecdotal example from one discount retailer in a New York suburb, I think it’s safe to say the holiday shopping season hasn’t turned out like most retailers expected.

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Investing

What to Watch in 2023 (11 minute read)As is our custom, we say goodbye to each year with a glance back and a look ahead. In what follows, we briefly revisit our 2021 year-end calls for 2022 and evaluate how well or poorly we did, and then take a deeper dive into key themes for the world economy and financial markets for 2023. Our aim is to provoke thinking and debate.

Will A Dollar Decline Be Good For Stocks? (4 minute read)Will a dollar decline be good for stocks? It is an interesting question, given that during 2022 there was a significant non-correlation between the dollar and the stock market. The strong dollar rally was something I suggested could be a problem for stocks, given what happened in 2020. The problem with a strong dollar is that it makes foreign purchases of U.S. products more expensive. In an already weak economic environment and surging inflation, the strong dollar acts as a “tax” on foreign consumption.

Not Even AI Can Beat the Market These Days (4 minute read)From the earliest days of artificial intelligence (AI) and machine learning (ML) in the 1950s, practitioners have spoken of using it for investment fund management. After all, humans are notoriously bad at investing, as only a minority of money managers beat random security selections, and most who do are probably just lucky. So far, that promise has not been realized. The only major fund run by AI – AI Powered Equity ETF - has underperformed and attracted low investor interest. Since opening in October 2017 the fund has returned just under half as much as the Vanguard S&P 500 ETF

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Money

No, You Didn’t Travel for Free With Those Points and Miles (10 minute read)The headlines are inescapable. “How to Take a Free Vacation With Credit Card Rewards” and similar taglines draw you in, usually accompanied by a picture of a sandy beach, azure ocean, pale blue sky, and a few lovely palm trees. The fact is that points and miles don’t give you free travel. They give you an alternative way to extract some value from the charges you make on your credit card. You could have opted for cash or cash equivalents, but you opted for a travel experience instead. I applaud the decision, but that does not make it free!

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