Facebook Meta stock declines 16% after the bell as sales decline accelerates.
WSJ Thursday
In a bear market all news is bearish. Mind you, Meta recorded a whopping $27.7 billion in quarterly revenue. That is only a 4% decrease from the year ago quarter. But the stock got whacked anyway, and it is much worse than it seems. Meta traded at $340 last January. Monday, it was just $140, a drop of 65%. Since Wednesday it collapsed to $100, a 30% collapse this week.
The Industrials have jumped to 32,429, a high for this move. But a lot of that is thanks to a few stocks like Caterpillar. But the NASD where one finds Meta lags at 10,852. The Transports are up but not in a really convincing manner.
A scan of the headlines is revealing
- Golf Probe Eyes Augusta
- Microsoft Struggles to Enter Metaverse
- SEC Rule to Hit Executives
- Mortgage Rates Hit 20 Year High
- Credit Suisse Plans Wall Street Retreat, Asset Sales
- Boeing Reports $3.3B Loss
- Ford Takes $2.7 Billion Charge
Couple this with images of crowd protests around the world and it is clear social mood has shifted. It is increasingly negative. And that is reflected in these headlines.
We expect the stock rally, already not well-confirmed, to end around the elections in November.
Meanwhile the Biden energy plan is clear to no one but his advisers. A recent headline had the Biden administration re-examining their relations with the Saudis. This is after his failed trip to get output raised, a fist bump, not a deal. The headline had it backwards. It is the Saudis who are re-examining their relation to the U.S.
Thursday the Saudis told the West to raise fossil-fuel output. On Thursday the Saudi Arabian CEO correctly criticized global plans to de-carbonize. Instead of relaxing restriction and regulations on U.S. producers, Team Biden turns to thugs like Maduro in Venezuela for hard to refine Mayan crude.
As for price, West Texas Intermediate bottomed at $77.50 in September and is now rising again to $89. A break of the October high at $92.50 will confirm Goldman’s prediction of Brent going to $115.
Gasoline futures are rising, now above $2.60. Be glad your winter will be in the Permian Basin. Heating oil bottomed at 75 cents March 2020. It is now $3.75, a cold winter is coming.
Has Trump wisely receded himself prior to the election? The October surprise is Fetterman’s poor performance in a debate with Oz. But Biden and Harris are on the way to help. Will her word salad rescue his campaign?
