Instacart Shelves IPO Plans

MARKET MOVERS

• Instacart pulls the plug on IPO plans. The grocery delivery start-up decided to postpone its plan to go public due to market conditions,* according to a person familiar with the matter. In an email to employees, Instacart said it won’t be making its public market debut this year, the person said. It was one of the few high-profile IPOs anticipated this year.

• Ark Invest’s Cathie Wood scoops up $13.7 million in Tesla shares after sell-off. The innovation-focused investor added 66,190 shares of Elon Musk’s company for her flagship Ark Innovation ETF after shares of Tesla slid about 6.7% Thursday as the company’s revenue fell short of expectations. Wood’s updated call on Tesla predicts the stock to hit $4,600 by 2026.*

• Snap stock plummets more than 25% as online advertising continues to struggle. The social media company believes it is highly likely that year-over-year revenue growth will decelerate* as we move through Q4, due in large part to the fact that Q4 has historically been relatively more dependent on brand-oriented advertising revenue, which declined slightly on a year-over-year basis in the most recent quarter.

• Amazon to use Airbus Cargo planes for the first time. The company is hiring Hawaiian Airlines to fly its packages on 10 rented Airbus jets* around the U.S., and it will take a stake in the carrier. The rise in e-commerce during the pandemic and the grounding of passenger jets led to demand for freighter planes. Amazon said a shortage of 767s to convert led it to look at other aircraft.

• Home prices and bidding wars withstand sliding sales. The housing sector continues to undergo an adjustment due to the continuous rise in interest rates, which eclipsed 6% for 30-year fixed mortgages in September and are now approaching 7%, NAR Chief Economist Lawrence Yun says. He added that expensive regions of the country are especially feeling the pinch and seeing larger declines in sales. Read more here.
  

WHAT TO WATCH

• Microsoft is in advanced talks to increase investment in OpenAI. The software giant seeks to further incorporate artificial intelligence* into its products. No deal has been reached between the two sides and the funding amount could vary as negotiations evolve. The companies have held talks in recent weeks, according to people familiar with the matter.

• It's a gloomy outlook overall for the UK. The Bank of England expects that the recession will last for 15 months. Usually, during a recession, there are strong rebounds in GDP. And what is striking is the Bank of England also thinks that in 2025, GDP will still be lower by 1.75%. This is a gloomy economic outlook for the coming years which might prompt investors to have low exposure to British assets. Source(20:49)

• Kushner Cos. offers to buy rival Veris Residential Inc. The deal would value Veris at about $4.3 billion including debt. Kushner offered $16 a share for the real estate investment trust. Kushner, was a major investor in New York real estate in the years leading up to the financial crisis, but in recent years has shifted its focus to amassing a national portfolio of rental apartments*

• Fed policy could ‘pause’ in the new year, Fundstrat’s Tom Lee says. Lee pointed to the fact that tail risks are coming off, specifically pointing to the U.K. prime minister stepping down Thursday after markets reacted to the government’s tax-cutting plan. Meanwhile, in the U.S., he said earnings have been “quite good” despite expectations* that the bear market would leave company bottom lines crushed.

• A leading economic index drops deeper into negative territory. The Conference Board’s Leading Economic Index (LEI) declined by 0.4 percent to 115.9 in September. The Conference Board is forecasting real GDP growth for 2022 to be 1.5 percent year-over-year amid high inflation, rising interest rates, tighter credit conditions, and slowing labor markets. The economy is expected to slow further* in the first half of 2023.