The S & P 500 will wrap up the fourth quarter this week and is on track to gain about 5.5% over the three-month period from October through December, as of the close on Wednesday, Dec. 28. The positive performance represents the only quarter of gains in 2022, breaking what had been the longest losing streak since 2008. What made the fourth quarter stand out from the first three of the year? First off, equities finally found some reprieve from the strong U.S. dollar , which peaked on Sept. 27, right before the end of the third quarter. The strong dollar has been a headwind to multinationals all year because it makes revenues generated outside the U.S. smaller when converted from foreign currencies. Also helping equity valuations was the peak in Treasury yields on Oct. 24. After yet another volatile quarter in the books, we’ve reviewed how our portfolio fared in the 3 months ended Dec. 31, using the close on Dec. 28 as our reference point. Here’s a snapshot of the best and worst performers in the Investing Club’s 33-stock portfolio for the fourth quarter, starting with our top 4 performers. (Note: We’re excluding our most recent initiation, Emerson Electric (EMR), from the rankings since the stock was purchased in mid-December. Shares of this industrial automation company have gained about 30.1% in the fourth quarter.) Top performers Taking the crown was Halliburton ( HAL), with a huge gain of around 54.7% for the quarter. What a difference a quarter can make. Shares of this oil-services company were the biggest laggard in the portfolio during the third quarter . The turnaround in performance shows that Halliburton was briefly a broken stock, not a broken company. Earnings also did the trick. In late October, Halliburton delivered strong third-quarter results , including improved operating margins thanks to healthy demand for its equipment and services. The gains were even more impressive when considering that the price of a barrel of West Texas Intermediate crude oil closed a volatile quarter roughly at the same price it traded at the start of October. Second place was a tie. Wynn Resorts (WYNN) gained 27.1% in the quarter. This was the second quarter in a row that Wynn made our top 4 list. Shares of this Macao-centric casino operator gained 10.6% in the third quarter. Wynn’s strong stock performance can be attributed to China’s pivot away from its strict zero-Covid policy . Wynn shares appreciated because investors finally gained some visibility into when the world’s second-largest economy will recover. It also helped that Wynn’s properties in Las Vegas and Boston continued to perform at a high level. Honeywell (HON) also climbed 27.1% in the quarter. Usually cyclicals are the ones that get hit when recession risks are fresh on investors’ minds. But, it was actually the industrials that were among the strongest performers in the quarter. In late October, Honeywell delivered a solid earnings beat for the third quarter and management raised the low end of its full-year outlook by about 15 cents a share. With Honeywell’s strong exposure to aerospace, oil-and-gas and non-residential construction, the company isn’t tied to the industrial end-markets that are currently facing declines. Fourth place was TJX Companies (TJX), which gained about 26.7% in the quarter. This was the second quarter in a row that TJX made our top 4 list. This off-price retailer was the portfolio’s top performer in the third quarter, gaining about 11.4%. The stock briefly broke above $80 a share and hit new all-time highs in reaction to a strong third-quarter earnings report . In addition to the positive results, management had been upbeat about the buying environment and merchandise opportunities heading into the holiday season. As an off-price retailer, TJX takes advantage of inventory gluts across the retail sector by purchasing quality brands at liquidation prices. The stocks that fared the best quarter-to-quarter changed frequently throughout the year. This highlights the difficulty of predicting what sector or group of stocks will outperform from one period to the next. It’s why we always strive to stay diversified and invest in high-quality companies across different industries. Worst performers Turning to what didn’t work in the fourth quarter, the worst performer for the club was Amazon (AMZN), which fell 27.6% in the quarter. Poor earnings and a disappointing fourth-quarter outlook were the major catalysts behind this decline. From online retail to its cloud unit, the weakening macroeconomic picture and high inflation negatively impacted nearly every part of Amazon’s business. It also didn’t help that Amazon stock was richly priced during a time in which valuations across the stock market have been adjusted due to higher interest rates. It has the highest price-to-earnings (PE) multiple of mega cap tech stock. Since Amazon has a premium PE multiple, it essentially has more room to fall. Second was Meta Platforms (META), which saw its share price come down by 14.2% in the fourth quarter. Meta went through a whole host of issues this quarter, mainly centering around its third-quarter earnings report . Revenues declined year-over-year for the second quarter in a row, but that was mostly anticipated by the market. What shocked the market the most was how management completely lost control over its expenses, with many billions of dollars earmarked for the Metaverse, an expensive endeavor with no real business case yet. Fortunately, Meta started to listen to the gripes of its shareholder base a few weeks later. The company announced it would lay off 13% of its workforce and tweaked lower its 2023 total expenses outlook. The news marked a step in the right direction, but Meta must do more to protect its earnings amid a slowdown in advertising spending. Bausch Health Companies (BHC) was the third worst-performing stock for the Club in the fourth quarter, with shares of this specialty pharmaceutials company dropping 11.6% in the quarter. There wasn’t much news impacting BHC this quarter, but its investment case remains a challenged one. Investors remain concerned about Bausch’s high debt load and lack of clarity around when a key drug, Xifaxan, will lose patent protection. This is a market that wants profitable companies with strong balance sheets, along with cash returns to shareholders through dividends and buybacks. Bausch may be profitable, but its bad balance sheet in a slowing economy will keep shareholders away. On the bright side, Bausch could move to spin off Bausch + Lomb (BLCO) in 2023, an event that would unlock value for BHC shareholders. The fourth worst performer was Walt Disney (DIS), which fell 10.8% in the quarter It all unraveled for Disney after it reported a much weaker-than-expected fiscal fourth quarter in November. Margins at the theme park division contracted and the losses from its streaming services swelled well beyond expectations. We made clear that a shakeup in leadership was necessary after that disaster of a quarter, and we got it. Bob Iger is back as CEO , having replaced Bob Chapek. He’s the steady hand Disney needs to course correct and provide more thoughtful navigation of cord-cutting at the company’s media division, while positioning the streaming business toward profitable growth. The common denominator this quarter was weakness in technology stocks. This group was once lauded for its secular growth characteristics, but as we have learned the hard way this year, many have closer ties to the economic cycle than previously thought. And if you aren’t profitable, then forget about it. An additional problem facing tech is that so many companies saw their businesses boom during the height of the Covid-19 pandemic, forcing them to overinvest, overspend and, some cases, increase inventories to keep up with the rapid uptick in demand. Now, many have become overstaffed, with bloated cost structures. What may be needed for these companies to sustainably rally again is to realign expense growth with the new reality of slowing revenue. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Workers walk towards Halliburton Co. “sand castles” at an Anadarko Petroleum Corp. hydraulic fracturing (fracking) site north of Dacono, Colorado, U.S., on Tuesday, Aug. 12, 2014.
Jamie Schwaberow | Bloomberg | Getty Images
The S&P 500 will wrap up the fourth quarter this week and is on track to gain about 5.5% over the three-month period from October through December, as of the close on Wednesday, Dec. 28. The positive performance represents the only quarter of gains in 2022, breaking what had been the longest losing streak since 2008.
A new bill submitted to the Oregon Legislative Assembly seeks to ban street-legal Class 3 electric bicycles from bike lanes in the state.
Class 3 electric bicycles include those that can reach motor-assisted speeds of up to 28 mph (45 km/h), whereas Class 1 and 2 electric bicycles can only reach 20 mph (32 km/h) under motor assist.
Under Senate Bill 471, the proposed legislation would make it an offense if a rider “operates a moped or a Class 3 electric assisted bicycle upon a sidewalk, a bicycle path or a bicycle lane.” Under Oregon law, traditional pedal bicycles can be legally operated on sidewalks unless restricted by a local ordinance, but e-bikes are already banned from operating on sidewalks.
Thus, the proposed legislation is effectively a ban on electric bikes capable of speeds exceeding 20 mph from being used in bike lanes. Instead, such bikes would only be permitted for use on public roadways.
In addition, Section 2 of the bill seeks to remove key protections for cyclists operating such 20+ mph electric bikes in bike lanes. Under current law, a motorist can be cited for failing to yield right of way to a cyclist in a bike lane when the motorist crosses over the bike lane, such as when crossing into a driveway, parking lot, etc.
The proposed legislation would remove the requirement for motorists to yield the right of way to cyclists on Class 3 e-bikes in bike lanes.
It should be noted that drivers cannot visually distinguish a Class 3 e-bike from other classes of e-bikes being ridden in a bike lane because the difference is performance-based.
Electrek’s Take
Sure, I support this law, as long as we can apply the logic equally. If the logic goes that Class 3 (28 mph maximum) e-bikes have the ability to be ridden faster than much of the traffic flow in a bike lane and thus should be banned in such bike lanes, then we might as well just ban cars capable of highway speeds from being operated on city streets. “Can your car go faster than 40 mph? Sorry, you know the rules. Keep that thing off city streets.”
It makes sense, right? Same logic. If it *can* go faster, it shouldn’t be allowed to operate there at all.
I mean, if a 60 lb e-bike that has the potential to go 8 mph faster than another e-bike is such a menace to public health and safety, then oh lordy what must we think of 5,000 lb vehicles that can easily exceed 120 mph with just a two-inch deviation of a distracted driver’s big toe? Surely we’ll be kicking those out of cities any day now, right? Right, guys? Guys…?
Ok, let’s get serious now. This law is awful and the legislators that conjured it up should be put on a 21 mph bicycle and forced to spend a couple minutes riding with their handlebar inches from 40+ mph cars to truly understand what real danger is. Then let’s hear them try to tell us how it’s a Class 3 e-bike that is the true danger.
I’m not trying to say that we should completely ignore that sometimes people get hit by an e-bike. It happens. It has even been lethal on exceedingly rare occasions. But you know what happens on regular occasions? Cyclists and pedestrians getting hit and killed by cars. So instead of spending legislative effort trying to push e-bikes back out onto roads, maybe we should expend some effort keeping car fenders off of cyclists’ bodies. Or invest in more bike lanes. Or increase enforcement of traffic violations for all road users. Or increase awareness education for drivers and riders alike. There are so many good answers, but none of them can be found in this bill.
Oil-linked shipping costs rallied after last week’s announcement of tighter U.S. sanctions to drain Russia’s war coffers, in a move that poses significant threats to Moscow’s maritime distribution chains.
On Jan. 10, the U.S. Treasury Department announced fresh measures to deplete Russia’s energy revenues, including sanctions against key producers Gazprom Neft and Surgutneftegas, along with 183 vessels that were “largely oil tankers that are part of the shadow fleet as well as oil tankers owned by Russia-based fleet operators.”
The Treasury added that several of the designated tankers had transported both Russian and Iranian oil, and further extended sanctions to Russia-based maritime insurance providers Ingosstrakh Insurance Company and AlfaStrakhovanie Group.
This is set to deliver a critical blow to Russia, which has been forced to reroute its crude and oil product supplies to Asia-Pacific, after these volumes were banned by European and G7 sanctions, which came in effect in December 2022 and February 2023, respectively.
Already, around 890 unique tankers loaded Russian oil — comprising both crude and oil products — in the past six months, analytics firm Vortexa told CNBC on Jan. 7, with 107 of these ships — or 12% of the total — being subject to vessel-specific sanctions at the time.
The figures do not factor in the Jan. 10 announcement. On Wednesday, the Paris-based International Energy Agencyassessed that around 160 out of the 183 blocked tankers had moved over 1.6 million barrels per day of Russian oil last year, accounting for 22% of Russian seaborne exports over the period.
The latest U.S. measures are also set to tighten the number of vessels available for the commission of non-Russian parties, pushing up shipping costs for other tankers. Since the Jan. 10 announcement, the effect of the bans has spilled into freight derivatives, with the volume of traded Forward Freight Agreement (FFA) contracts — which can allow traders to hedge against volatility in fluctuating freight rates – jumping to 11,412 on Jan. 10, and topping 7,900 and 6,700 on Jan. 13 and Jan. 14, respectively, according to data from the Baltic Exchange. The figures compare with 2,987 and 1,683 contracts traded daily on average in the months of November and December, respectively.
Rates for supertankers crossing from the Middle East Gulf to Asia-Pacific — a bellwether route for the oil industry — picked up by more than 40% between Jan. 9 and Jan. 14, according to pricing data from Argus Media.
As a result, the sanctions “could significantly disrupt Russian oil supply and distribution chains,” the IEA warned, noting that Russian exports will “take a hit from the shadow tanker fleet reduction” and the “elimination of shipping insurance, the bridling of dominant traders of Russian oil and designation of key handling companies in consumer markets.”
The agency nevertheless fell short of factoring the latest U.S. steps into its Russian supply forecasts, while noting that crude exports from the Eastern European country – a key member of the OPEC+ alliance – fell by 250,000 barrels per day month-on-month to 4.6 million barrels per day in December.
Swedish and Chinese EV automaker Polestar has shared an updated business strategy, looking to 2025 and beyond as its next chapter in growth. Per the release detailed below, Polestar is expecting increased sales volume, especially as its long-promised Polestar 5 GT is set to launch this year. Additionally, the automaker confirmed its Polestar 7 model will be a compact SUV and its most affordable BEV to date.
Polestar remains a growing name in the EV segment, and more and more people are becoming aware of the Geely-owned brand as it brings more models to market. Its two most recent were the Polestar 3 SUV and 4 crossover, built in the US and China, respectively. According to Polestar, those two models have gained “strong product momentum,” accounting for 56% of orders in Q4 2024.
Polestar looks to ride that wave into 2025 and add to its impetus with the launch of the Polestar 5, a sports sedan based on the automaker’s Precept concept EV that is targeting up to 884 hp and will attempt to compete against some of the big boys, like the Tesla Model S and Porsche Taycan.
While it won’t be part of Polestar’s 2025 launches, the automaker’s executives have divulged some new details about a new model called the Polestar 7, which was teased back in April 2024.
Polestar 7 to replace the 2 as its entry-level model
According to a release published on its investor page, Polestar expects a fruitful 2025 that will set the town for its revamped business strategy through at least 2027. Per the automaker, it is targeting compound annual retail sales volume growth of 30-35% over the next three years and positive adjusted EBITDA in 2025. Furthermore, Polestar executives expect positive free cash flow after investments in 2027. Polestar CEO Michael Lohscheller elaborated:
With Scandinavian design, performance and a premium brand, Polestar has successfully positioned itself in the global automotive market. We have three outstanding cars on the road and a growing, passionate customer base.We are building on the strong Polestar brand with design and performance at its core.
But significant changes are needed to make this well-respected progressive brand a successful and viable business. We are speeding up our retail expansion and commercial transformation, whilst adjusting our future model line-up and significantly reducing our cost base. Both in terms of volumes and financials, we expect 2025 to be the strongest year in Polestar’s history.
Part of Polestar’s success in 2025 will depend on the start of sales of the Polestar 5, the automaker’s first model to sit atop an 800V platform. According to the company, that launch is expected in the second half of this year. Until then, Polestar will continue to push sales of its current lineup, which consists of the Polestar 2, 3, and 4.
While the Polestar 2 will be remembered as the BEV that put the brand on the map, its days are unfortunately numbered. Previous Polestar CEO Thomas Ingenlath said the company intends to phase out the 2 sedans around 2027, and its successor will be a new model called the Polestar 7.
We hadn’t heard much about the Polestar 7 since then, but the company confirmed today that it will arrive as a premium compact SUV. Additionally, we’ve learned the Polestar 7 will be the brand’s first model built in Europe. With production footprints in China, South Korea, and the US, Europe is a natural next step in expansion, especially for an affordable, compact SUV the Polestar 7 promises to be, because that is such a popular segment in the EU.
The Polestar 7 will also represent a new design strategy for the automaker. From that launch onward, it will “gradually move from a multi-platform approach to one single architecture, reducing complexity, costs, and investments.”
While we’ve learned what style of BEV the Polestar 7 will be, we don’t know much else at this point. With the expectation that we won’t see anything come to market until 2027 at the earliest, our immediate focus will remain on the upcoming launch of the Polestar 5 in 2025, followed by the Polestar 6 roadster convertible in 2026.
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