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Oil Takes a $3 Dive: Oversupply Signals Trigger New York’s Slide

In the world of black gold, Thursday saw a nosedive in oil prices, dropping over $3 a barrel. New York investors weren’t dancing to a happy tune as signs of a looming supply surge in the US and gloomy expectations for energy demand in China took center stage.

Brent futures took a hit, plummeting by $2.60 or 3.2%, clocking in at $78.58 a barrel by 1526 GMT. Meanwhile, the US West Texas Intermediate crude (WTI) shed $2.65, roughly 3.5%, down to $74.01. Both these benchmarks had already stumbled by more than 1.5% in the preceding session.

Adding a touch of drama, WTI’s front-month contract slipped below the second-month price, slipping into a contango setup – a red flag for oversupply.

According to Tamas Varga, the oil maestro from PVM, this crude price plunge is like a storm cloud warning of an oversupplied market. But, he admits, whether this nosedive is entirely justified is still up for debate. Nevertheless, he points out that the financial firepower of New York has a knack for blowing things out of proportion, especially when it comes to sentiment.

OPEC and the International Energy Agency (IEA) had painted a picture of tight supply in the final quarter. But reality seems different as US data spilled the beans on Wednesday, revealing bloated inventories.

The US government’s Energy Information Administration reported a hefty 3.6 million barrel surge in US crude stocks last week, reaching a staggering 421.9 million barrels. That’s way beyond what analysts in a Reuters poll had envisioned.

Meanwhile, US crude production stayed put at a record 13.2 million barrels per day (bpd).

Varga, the voice of reason amidst the chaos, hinted at potentially bullish October inflation data from economic big shots like Britain, the euro zone, and the US.

But hey, it’s not all doom and gloom! Chinese economic activity showed some muscle in October, flexing with faster industrial output and retail sales growth that beat expectations. Maybe there’s a glimmer of hope in this murky oil saga after all.

U.S. stocks fall after Walmart warns about consumer spending pressures

U.S. stocks were falling, stalling their recent rally as investors worry about Walmart’s outlook on consumer spending heading into the holiday shopping season.

At 11:10 ET (16:10 GMT), the Dow Jones Industrial Average was down 77 points or 0.2%, while the S&P 500 was down 0.1% and the NASDAQ Composite was down 0.3%.

Walmart warns about consumer pressures

Walmart (NYSE:WMT), the largest retailer in the U.S., posted net income of $453 million, or 17 cents a share, for the third quarter, a massive improvement from a loss of $1.8 billion, or 66 cents a share, in the year-earlier period.

However, it issued a word of caution around the state of the consumer heading into the crucial holiday shopping season. Shares fell 7.2%.

Chief Financial Officer John David Rainey told CNBC that inflation-hit consumers are still continuing to put off larger purchases as they await promotional periods, echoing comments made by fellow retailer Target on Wednesday, when it pointed to lingering pressures on consumers from higher interest rates and lower savings.

Macy’s (NYSE:M), on the other hand, jumped 6%% after the department store chain exceeded expectations in the third quarter and lifted its full-year guidance.

Additionally, Cisco Systems (NASDAQ:CSCO) stock fell 11.6% after the company cut its full-year revenue and profit forecasts in a sign that demand for its networking equipment was slowing.

Palo Alto Networks (NASDAQ:PANW) stock fell 5.4% after the cybersecurity company posted solid first-quarter results but issued second-quarter and full-year billing guidance below estimates.

Economic data feeds Fed decision

Fed officials meet next month for the last time this year to decide on interest rates, with futures markets widely expecting the central bank to leave interest rates unchanged in December, before cutting next spring if conditions continue to show improvement.

The main indices on Wall Street closed higher Wednesday, aided by the largest monthly drop in wholesale prices since 2020 in October, which bolstered expectations that the Federal Reserve could be near the end of its interest rate increases.

The 30-stock Dow added over 160 points, or 0.5%, while the benchmark S&P gained 0.2% and the tech-heavy Nasdaq rose 0.1%, adding to Tuesday’s sharp gains.

Sentiment was boosted by the news that the Senate passed a stopgap spending bill late Wednesday and sent it to President Joe Biden to sign into law before a weekend deadline, avoiding a damaging partial government shutdown.

Oil slips as U.S. inventories rise

Oil prices retreated Thursday after U.S. inventories rose more than expected, adding to concerns over lackluster energy demand from China.

Data from the U.S. Energy Information Administration showed that U.S. crude stocks rose a more than expected 3.6 million barrels in the week to November 10, while U.S. production remained at record highs of 13.2 million barrels per day through the week.

In Asia, China’s oil refinery throughput eased in October from the previous month’s highs as industrial fuel demand weakened and refining margins narrowed.


Bank of America Sees Brighter Days Ahead for StoneCo (STNE), Gives Green Light with $17 Per Share Target

In a plot twist that could make stock market dramas jealous, Bank of America (BofA) has gone from ‘meh’ to ‘oh yeah!’ on StoneCo (STNE) shares. They’ve cranked up the excitement, upgrading from Neutral to Buy and slapping a new $17 per share target – a juicy tidbit shared in a note hot off the press on Thursday.

Analysts, sharing the scoop with investors, couldn’t help but notice Stone’s déjà vu strategy for the next three years. It’s like déjà vu all over again, mirroring what they’ve been up to for the past four years.

The plan? Spruce up that client base by mixing in some banking, credit, and software services while trying to conquer more territory in the MSMB segment. Sounds familiar, right?

But here’s the kicker: Turns out, this grand plan hasn’t exactly been a grand slam in the past four years. Blame it on bloopers in execution and a wild, wild industry landscape. But fear not! There’s a new sheriff in town – or rather, a new CEO, CFO, Head of Credit, and Head of Technology. Plus, they’re all about pinching pennies now, so analysts are crossing fingers for better outcomes this time.

Confident in StoneCo’s crystal ball gazing for 2024, these analysts notched up the stock rating and price target, all thanks to some jazzed-up earnings estimates.

Yet, they’re keeping an eye on StoneCo’s wild ride lately. The stock’s been on a 25% joyride over the past three days, thanks to a killer third-quarter show, a fancy R$1.0bn buyback plan, and some seriously sunny forecasts during the Investor Day. They’re banking on Consensus forecasts to keep that stock performance party going strong.

Bottom line? Bank of America’s sudden swoon for StoneCo isn’t just about a fancy strategy refresh. It’s also a shiny, new outlook on where this rollercoaster of growth might lead. Hold on tight, investors!

Ah, the weekend—the perfect time to flip through stock reports as you flip pancakes. While some might brunch, the savvy investor does a different kind of stacking—portfolio stacking. Who needs brunch when you can have a side of dividends and a main course of compound interest? So here’s to making investment decisions as sharp as your Sunday brunch knife, slicing through volatility like it’s a perfectly cooked steak. Cheers to the weekend warriors of wealth-building!