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Today in the Market (11/23/2022)

Good Evening. The minutes from the Federal Reserve’s most recent policy meeting indicated that the central bank would likely decrease the rate of interest rate hikes next month.

When Wall Street’s closing bell sounded, all three main indexes were in positive territory, with the S&P 500 up 0.59%, the Dow up 0.28%, and the Nasdaq up 0.99%.

COST-CUTTING STRATEGY

The IT giant HP (HPQ) disclosed late Tuesday a fresh $1.4 billion cost-cutting strategy that would see it lay off 4,000 to 6,000 staff by the end of the fiscal year 2025. This represents around 12% of HP’s employees. Despite the decline in revenue, the corporation exceeded all analyst projections.

  • Earnings Per Share: $0.85 vs. $0.84 expected
  • Revenue: $14.8 Billion vs. $14.65 Billion expected
  • Printing Sales: $4.5 Billion vs. $4.41 Billion expected

More into the layoffs… HP expects it will spend about $1.0 billion in labor and non-labor expenses related to restructuring and other charges, with almost $600 million incurred in the fiscal year 2023 and the remainder incurred in fiscal years 2024 and 2025.

Still a very common theme. The reorganization comes at a time when major corporations, including Amazon.com Inc, Facebook’s parent company Meta Platforms Inc, and Cisco Systems Inc, are laying off large numbers of employees in preparation for a future economic slump.

NO MORE BETTING ON GAMESTOP?

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According to S3 partners’ data, just 3 million shares remain available to be sold short, since 95% of available stock borrowing has already been utilized to cover shorts. In other words, just 5% of the shares of the corporation made available for short sale by investors remain unsold.

What is short selling? Short-sellers wager on a company’s decline by selling borrowed shares of a stock whose price they anticipate will decrease, with the intention of buying them back at a lower price and pocketing the difference.

“The vast majority of GME short selling has already been done, existing short sellers will be able to add some more exposure to their positions and new short sellers may enter the trade — but there is not enough stock left to borrow to execute large trades in the stock,” S3’s Ihor Dusaniwsky said in a note.

 

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