Salesforce executive exits help push stock to its lowest point since March 2020 (4 min read)
Salesforce Co-CEO Bret Taylor said last Thursday that he is leaving after serving the role for just a year. The CEO of Slack, who joined Salesforce after the acquisition last year, also said on Monday he is leaving the company. Both are the highest profile exits among other executives who left in the past months. Along with the recent weak Q4 sales forecast and slowing revenue in Q3, Salesforce stocks have plunged for two consecutive days and reached the lowest since pre-pandemic.
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North Face owner VF Corp. falls 10% after guidance cut and CEO steps down (2 min read)
VF Corporation, owner of North Face and Timberland, has lowered its revenue and earnings projection for the second time in less than two months. VF said the continued weakened financial outlook is due to slowing sales and increasing order cancellation driven by surging inflation and Covid related disruption in China. It was also announced chairman and CEO Steve Rendle is stepping down from his post. Shares of VF fell 10% after the news.
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Chinese stocks and currency rally on reopening hopes (3 min read)
Chinese indexes jumped between 2% to 5% and renminbi rose 1.3% against the dollar after China announced further easing to their Covid restrictions. It varies across the country but major cities will now allow people on public transportation without PCR test and can quarantine at home if tested positive. Although it brings optimism to the markets, some analysts warned zero-Covid policy will stay in the near-term and China’s path to reopening will probably not be straightforward.
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OPEC+ keeps steady policy amid weakening economy (3 min read)
OPEC+ has agreed to stick to the existing oil output target of 2 million barrels per day. There were many speculations that they will cut output again since oil prices continued to drop. However, the group decided to keep the policy unchanged until their meeting next year. Some OPEC members have expressed frustration at the recent Russian oil price cap as it could ultimately be used against any producer. The US reassured that it was not aimed at OPEC.
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Direct Indexing Poised for ‘Tremendously Strong’ Inflows (2 min read)
A recent whitepaper projected assets in direct indexing will grow at a five-year CAGR of 12.3% and reach $825 billion by 2026. The flow into direct indexing over the last two to three years has been strong due to the rise in robo advising, zero-commission trades, and fractional share trading. Awareness of direct indexing remains low among financial advisors but will likely improve as large banks have entered the space and will market the concept aggressively.
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Where BlackRock sees market opportunities for ETF investors in 2023 (3 min read)
As the market is in a transition to departure from a decade of growth leadership, value stocks may outperform next year. If you expect a soft-landing to the economy is still possible then consider small cap equities instead of growth stocks. Treasury and investment grade corporate bonds are also potential buying opportunities amid a high interest rate environment. More on the ETF recommendations for each area is available in the article.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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