Week of Nov 12, 2021 Weekly Recap & The Week Ahead
“Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.” – Bruce Kovner
1. General Electric to Split Into Three Public Companies — the plan is being unveiled three years after Larry Culp took over the troubled company and tried to stabilize its operations by selling off business units and paying down the company’s debt load. But GE’s stock price, despite a 1-for-8 reverse split, has lagged behind the S&P 500 and rivals. What remains today are three businesses—aviation, healthcare and power. The company will now spin them off into separate publicly traded companies. GE said it is spinning off GE Healthcare, which makes MRIs and other hospital equipment, in early 2023, with GE expecting to retain a stake of 19.9% that it plans to sell over time. In 2020, the unit had about $17 billion in revenue.GE plans to combine its power unit and renewable energy unit, which make turbines for power plants and wind farms, respectively, and spin off that operation in early 2024. The company’s remaining digital division will also be moved into the power business. Those units together had about $33 billion in revenue in 2020.
That would leave behind a GE focused on making and servicing jet engines.
2. Pfizer, BioNTech Ask FDA to Expand Covid-19 Booster Use to All Adults — Pfizer Inc. and partner BioNTech asked U.S. health regulators to expand the authorization of their Covid-19 booster to people as young as 18 years old, as the government explores expanding access to extra doses. The application opens the door for authorization of the extra dose potentially before the end of the year, which could provide millions of people with another layer of security as winter drives many indoors where the risk of transmission is higher.
The Food and Drug Administration in September cleared a third dose of the Pfizer-BioNTech vaccine for adults who are 65 years and older or are at risk of severe disease and death, including because of their jobs or where they live. The government has also cleared booster shots of vaccines from Moderna Inc. and Johnson & Johnson, and is backing mixing-and-matching the extra doses.
3. U.S. Inflation Hit 30-Year High in October as Consumer Prices Jump 6.2% — the Labor Department said the consumer-price index—which measures what consumers pay for goods and services—increased in October by 6.2% from a year ago. That was the fastest 12-month pace since 1990 and the fifth straight month of inflation above 5%. The core price index, which excludes the often-volatile categories of food and energy, climbed 4.6% in October from a year earlier, higher than September’s 4% rise and the largest increase since 1991. The inflation surge is complicating the Federal Reserve’s strategy for unwinding easy-money policies the central bank imposed early in the pandemic. It has also emerged as a political factor affecting the Biden administration’s economic agenda.
4. Elon Musk Sells About $5 Billion in Tesla Stock — Elon Musk sold about $5 billion in Tesla Inc. shares this week as he exercised stock options that he received as part of his compensation package, according to regulatory filings made public late Wednesday. After selling less than 1% of his holdings Monday, he sold about 2% over the subsequent two days, the regulatory notices show. He sold around 4.5 million shares in total over the three days, shrinking the size of his stockholdings in Tesla even after exercising the options.
5. Beijing Cancels Events as Covid Cluster Hits 17-Month Record — Beijing is hunkering down after experiencing more Covid infections in the current cluster than at any time in the past 17 months, with officials asking for events and activities to be moved online. Organizers of the winter Olympic games to be held in February said that two foreign athletes tested positive for the virus in the test events underway in China, the Associated Press reported Friday. The organizers didn’t share more details, according to the report.
Beijing has detected 45 cases in the latest wave, the most since June 2020. The country is struggling to contain its fourth outbreak with the more infectious delta variant in the past five months. With more than 1,000 locally-transmitted infections spread across 21 provinces, it is already the broadest flare-up since the virus first emerged in Wuhan.
The week ahead — Economic data from Econoday.com:
