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(Bloomberg) — Tesla Inc. is getting a strong show of faith from a group that Chief Executive Officer Elon Musk once blasted for doubting the company’s prospects: Wall Street analysts. 

The electric-carmaker’s shares closed up 7.7% Wednesday, after Federal Reserve Chair Jerome Powell signaled a slowdown in the pace of tightening as early as December, triggering a market-wide rally. Despite the strength, Tesla’s stock recorded its biggest monthly drop since April, capping a rout that’s pushed it down some 37% since late September on concerns about a recession, rising interest rates and the ripple effects of Musk’s takeover of Twitter Inc.  

But the scale of the slide has turned securities analysts increasingly bullish, wagering that the selloff has run too far. More than 60% are now recommending that investors buy Tesla stock, the highest share since early 2015, according to data compiled by Bloomberg. And such ratings have been ratcheted up steadily this year, with at least two analysts upgrading the stock this month and several reiterating their bullish stance. 

“The Tesla bulls I know are loading up at these levels,” said Catherine Faddis, senior portfolio manager at Fernwood Investment Management. 

After hitting an all-time high in early November 2021, Tesla’s share price has been dragged down by interest-rate hikes that have hammered growth-stock valuations and by problems that have dogged the global economy since the pandemic.

Tesla has been contending with a supply-chain crisis and soaring costs of raw materials that are affecting the entire auto industry. It has also seen multiple production disruptions at its key factory in China, where the government has taken a hard line toward containing the pandemic. More recently, the rising fears about a recession next year fueled concern that demand for its relatively expensive cars may also take a hit.

Musk’s Twitter deal has also been a major drag on Tesla’s share price. That’s because of the risk that he could sell stock to inject more cash into the money-losing social-media site and that turning around Twitter will take his focus away from the EV maker.

Some analysts remain skeptical that the worst is over, with its stock still commanding a higher price-to-earnings ratio than 90% of the stocks in the S&P 500. Some 27% of the analysts tracked by Bloomberg still rate Tesla a hold, while 13% advise selling the stock.

“Tesla’s stock price remains high on almost every valuation metric compared with traditional automakers due to its unique growth profile,” Bernstein analyst Toni Sacconaghi, who rates Tesla the equivalent of a sell, wrote in a note on Tuesday. He added that broader market pressures amid higher rates and slower consumer spending, could “likely impact higher valuation stocks such as Tesla disproportionately.” 

But the bullish sentiment is being stoked by the steep drop in its stock price and expectations that its business will boom over the long-term as it extends its competitive edge in the electric-vehicle market.

The shares have cheapened so much that Tesla has since retraced several milestones it broke through during the stratospheric surge of 2020 and 2021, including losing its position as the fifth-most valuable company in the S&P 500 Index to Berkshire Hathaway Inc. and its $1 trillion market capitalization. 

Yet retail investors, among whom Tesla enjoys ardent support, are continuing to pile into the stock, according to data from Vanda Research. Tesla was second only to the SPDR S&P 500 ETF in a list of the most bought securities this year, in terms of number of days at the top spot, Vanda said.

Those bulls have some positive business fundamentals to point to. As the leading EV maker, the company is set to benefit from US President Joe Biden’s Inflation Reduction Act, which provides a tax credit for buyers of such vehicles. The widely awaited Cybertruck pickup is expected to get into production in the middle of next year, and the company is holding a delivery event on Thursday for its Semi trucks. 

Citigroup Inc. analyst Itay Michaeli last week upgraded Tesla shares, saying the valuation was more balanced after the selloff and the company’s strong competitive edge in the EV market will help it weather a downturn. Morgan Stanley’s Adam Jonas struck a similar chord, saying Tesla is the only EV maker covered by the bank that generates a profit on the sale of its cars.

“In a slowing economic environment, we believe Tesla’s ‘gap to competition’ can potentially widen, particularly as EV prices pivot from inflationary to deflationary,” Jonas said.

(Updates stock move in second paragraph.)

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(Bloomberg) — Snowflake Inc., whose software helps businesses organize data in the cloud, fell 10% in late trading after giving a disappointing sales forecast, a sign that corporate customers are slowing technology investments in an uncertain economy.

Product revenue will be as much as $540 million in the fourth quarter, which ends in January, the company said Wednesday in a statement. Analysts, on average, estimated $551.8 million, according to data compiled by Bloomberg. Product sales make up the majority of Snowflake’s total revenue and are watched closely by investors and analysts.

Snowflake’s signature consumption pricing model, which charges customers based on how much they use its products, has been controversial among some analysts, who say it’s vulnerable to quick pullback during recessions. Growth of consumption-based cloud offerings from Amazon.com Inc. and Microsoft Corp. slowed “significantly” recently, Mark R Murphy, an analyst at JPMorgan Chase & Co., said before the Snowflake results were released. 

Read more: Snowflake’s consumption-model pricing is taking off

In the fiscal third quarter, product revenue increased 67% to $522.8 million. Analysts, on average, estimated $505.7 million. 

The shares had closed at $142.90 in New York, down 58% this year — part of a broader tech rout that has punished less profitable companies.

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(Bloomberg) — Apple Inc.’s top executive in charge of media-related software technology is leaving the iPhone maker to join Roblox Corp., adding to a string of recent high-profile departures. 

John Stauffer is exiting Apple after about 24 years to become a vice president of engineering at the online gaming platform. He was one of a handful of company vice presidents to report directly to software engineering chief Craig Federighi. 

The departure adds to upheaval at Apple, with a series of vice presidents leaving in recent months. The company’s head of procurement was ousted in September, while its chief privacy officer, head of industrial design, chief information officer, vice president of software engineering for information systems, and vice president of online retail have all recently stepped down.

Stauffer oversaw a team of more than 1,000 engineers and was responsible for most of Apple’s media, graphics, display and communications software technologies across the iPhone, iPad, Apple TV, Apple Watch and other devices.

The veteran executive, who ran what is known as the Interactive Media Group, also helped develop features like AirPlay, FaceTime and CarPlay, as well as the software that powers the graphics components inside of devices, according to his LinkedIn profile. And he contributed to Apple’s work on its upcoming augmented and virtual reality headset. 

In his new job, Stauffer will oversee the Roblox Engine, which the gaming provider describes as the “heart of the company’s social 3D runtime platform.” An Apple representative didn’t immediately respond to a request for comment. 

Stauffer is little known outside of the Cupertino, California-based technology giant, but was seen as a key executive within the company. He was briefly in the spotlight during Apple’s legal fight with Epic Games Inc. over App Store rules and fees. An email exchange with Stauffer and Federighi was included as evidence. 

The executive suggested in 2017 that Apple should begin moving some of its key applications and features to the cloud. He argued that Apple could create the “largest application ecosystem” in the world by offering cloud-based applications that run its devices via the web rather than on the hardware itself. 

Stauffer said this would improve game availability on Macs, allow the release of pro apps on low-end devices and unify apps across Apple’s platforms. Federighi dismissed the idea, saying it countered Apple’s business model and work on higher-end processors such as those found in the latest Macs. To date, Apple still doesn’t rely heavily on the cloud for applications, though a shift to cloud computing at other technology companies has gained momentum.

Axios previously reported on Stauffer’s exit.

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(Bloomberg) — Bad Bunny spent much of 2022 on the appropriately-titled “Word’s Hottest Tour.” He also was the year’s hottest artist on Spotify.

The Puerto Rican rapper was the most-streamed artist globally on Spotify in 2022, the company said on Wednesday. He’s been the most-streamed artist on the platform since 2020, when he released the albums YHLQMDLG and El Último Tour del Mundo. The 2022 follow-up, Un Verano Sin Ti, was the most-streamed album globally this year. His songs Me Porto Bonito and Tití Me Preguntó were among the five most-streamed songs worldwide. In total, users streamed his catalog more than 18.5 billion times.

Taylor Swift, Drake, The Weeknd and BTS, the K-pop supergroup, rounded out the top five most-streamed artists globally of the past year. As It Was by Harry Styles was the most-streamed song both globally and in the US. And Swift’s Midnights, which debuted Oct. 21, is already the fourth most-streamed album in the US this year. 

Bad Bunny — otherwise known as Benito Antonio Martínez Ocasio or by his first name, Benito, to fans — topped Bloomberg’s Pop Star Power Rankings this year, thanks to a mix of album sales and streams as well as ticket sales. His 2019 tour grossed $36.9 million, and his 2022 tour has broke all-time concert gross records in cities across the US, according to Billboard’s October Boxscore report.

The rapper is at the forefront of the rapidly growing Latin music market, particularly in the US. Revenue for the genre exceeded $510 million in US retail stores in the first half of 2022, according to a midyear report issued by the Recording Industry Association of America. That’s a 23% increase from the same time period in 2021. The bulk of revenue came from streaming and paid subscriptions like the one Spotify offers in particular. 

Un Verano Sin Ti is the first entirely Spanish-language album to be nominated for Album of the Year in Grammys history. The rapper has previously won two Grammys and four Latin Grammys. Un Verano Sin Ti was also nominated for Album of the Year at this month’s Latin Grammys but did not take home the prize.

Bad Bunny is also set to join the ever-expanding Marvel universe as El Muerto in an upcoming Sony Pictures project. The film is slated to be released in 2024.

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(Bloomberg) — Facebook parent Meta Platforms Inc. is giving up some offices at Manhattan’s Hudson Yards as the company seeks to slash expenses and cull its workforce. 

Meta will return its space at 30 and 55 Hudson Yards to landlord Related Cos., according to people with knowledge of the plans, who asked not to be named because the matter is private. Meta, which leases more than 250,000 square feet (23,000 square meters) across the two towers, has declined the option to renew its lease, which runs through 2024, the people said.

The social media giant in 2019 agreed to rent more than 1.5 million square feet spread among three towers at the development on Manhattan’s far west side. Most of the space is at the third building, 50 Hudson Yards. Meta is subleasing a small amount of space at that tower, according to spokesperson Tracy Clayton. 

Bloomberg reported in July that the company halted plans to further build out its offices at 50 Hudson Yards while it evaluates its real estate in New York, which includes about 730,000 square feet at the redeveloped Farley Building across from Pennsylvania Station.

“We remain firmly committed to New York City as evidenced by the opening of the Farley Building, further anchoring our local footprint,” Clayton said. “We also look forward to opening 50 Hudson Yards, which is estimated to be complete next year.”

A representative for Related declined to comment. 

Meta is scaling back its real estate as Chief Executive Officer Mark Zuckerberg embarks on a wide reorganization of the company, cutting thousands of jobs while pausing hiring. On its third-quarter earnings call, Meta said it expects to take a roughly $2 billion hit related to consolidating its offices and exiting space. 

Large tech companies have driven office leasing in New York during the pandemic, even as they allowed flexible, remote-working options. Some firms have since pulled back in the wake of broad stock-market declines and growing fears about the US economy heading into a recession. 

Earlier this year, Meta backed out of a deal to add 300,000 square feet to its space at 770 Broadway, a building near Astor Place. The firm also is shutting down its offices at 225 Park Ave. South. 

(Updates with additional comment from Meta spokesperson, Related declining to comment.)

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(Bloomberg) — Stocks rebounded after Jerome Powell signaled a likely slowdown in the pace of tightening as early as December, while indicating more hikes will be needed to curb inflation.

The S&P 500 erased losses and headed for a new milestone: its longest monthly winning streak since August 2021. Big tech outperformed as bond yields fell with the dollar.

“The time for moderating the pace of rate increases may come as soon as the December meeting,” Powell said in the text of his speech. “Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level.”

Follow Powell’s Remarks at Brookings in Real Time: TOPLive

Officials have signaled they plan to raise their benchmark rate by 50 basis points at their final meeting of the year on Dec. 13-14, after four successive 75 basis-point hikes which have lifted it to a 3.75% to 4% target range.

Ahead of Powell’s remarks, Fed Governor Lisa Cook said it would be prudent for the central bank to make smaller hikes as it determines how high it will need to go to tame price gains.

Traders also scoured several economic reports, with key gauges of US activity painting a mixed third-quarter picture. Job openings fell in October — a hopeful sign for the Fed as it seeks to curb demand.

The figures precede Friday’s jobs report, which is currently forecast to show employers added 200,000 workers to payrolls in November. Economists are expecting the unemployment rate to hold at 3.7%, and for average hourly earnings to moderate.

“You’re still not in a recession yet, but growth is slowing, and you’re just seeing this volatility of trying to price this in. It’s a challenge,” Matt Miskin, co-chief investment strategist at John Hancock Investment Management, said at Bloomberg’s New York headquarters. “It’s like a traffic light going red-green, red-green.”

Read: Funds Line Up to Bet on More Dollar Pain After Brutal November

Key events this week:

• S&P Global PMIs, Thursday
• US construction spending, consumer income, initial jobless claims, ISM Manufacturing, Thursday
• BOJ’s Haruhiko Kuroda speaks, Thursday
• US unemployment, nonfarm payrolls, Friday
• ECB’s Christine Lagarde speaks, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.8% as of 1:56 p.m. New York time
• The Nasdaq 100 rose 1.6%
• The Dow Jones Industrial Average rose 0.3%
• The MSCI World index rose 0.9%

Currencies

• The Bloomberg Dollar Spot Index fell 0.4%
• The euro rose 0.3% to $1.0360
• The British pound rose 0.3% to $1.1989
• The Japanese yen was little changed at 138.55 per dollar

Cryptocurrencies

• Bitcoin rose 2.7% to $16,910.6
• Ether rose 4.8% to $1,277.98

Bonds

• The yield on 10-year Treasuries declined three basis points to 3.72%
• Germany’s 10-year yield was little changed at 1.93%
• Britain’s 10-year yield advanced six basis points to 3.16%

Commodities

• West Texas Intermediate crude rose 3% to $80.51 a barrel
• Gold futures rose 0.5% to $1,771.90 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from John Viljoen, Vildana Hajric, Peyton Forte and Cecile Gutscher.

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(Bloomberg) — Banks are developing technology to identify potential mass shooters, according to a CEO backing the push to get credit-card companies to more closely track gun purchases. 

“Detection scenarios” are in the works that, if triggered, would prompt banks to file a Suspicious Activity Report to the Treasury Department’s Financial Crimes Enforcement Network, Amalgamated Bank Chief Executive Officer Priscilla Sims Brown said at the New York Times DealBook conference Wednesday.

“We’re at the very early stages of this — this particular code just got approved in October, so those detection scenarios are still being brought together,” Brown said. “But as this is implemented, those scenarios will be used.”

The strategy would mirror ways banks try to identify and stop fraudsters from using customers’ funds. 

The International Organization for Standardization approved a new merchant category code earlier this year that banks will use when processing transactions for gun and ammunition stores after Amalgamated submitted an application on the matter. Gun-control advocates were quick to celebrate the move, arguing it would help banks flag suspicious activity at these retailers.

While major payment networks have said they would adopt the new code, some have argued it won’t have its intended effect. Visa Inc., for example, has said it doesn’t have access to data showing the products consumers are actually buying. That means the network and its banking partners would have no idea if a gun-store customer is purchasing an automatic rifle or safety equipment.

Banks, too, have faced pressure from Congress over what they plan to do with the new codes. Some conservative policymakers have said they’re concerned lenders will use the data to create an unofficial list of firearm owners in the US, which certain government agencies are prohibited from doing.

Banks already file thousands of suspicious activity reports every year as they detect a litany of potential misdeeds by customers. The new codes should mean they treat the issue of tracking gun purchases no differently, Brown said.

“What I’m hearing from other banks is that they have been honoring this process and this system, filing Suspicious Activity Reports across a myriad of industries to stop a myriad of crimes — or at least alert authorizes of them,” she said. “And I have every confidence that banks are going to do the same thing here.”

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(Bloomberg) — The European Union’s executive arm will conduct a stress test at Twitter Inc.’s headquarters early next year as the bloc’s digital chief warned Elon Musk he has “huge work ahead” to comply with content moderation laws.

“Twitter will have to implement transparent user policies, significantly reinforce content moderation and protect freedom of speech, tackle disinformation with resolve, and limit targeted advertising,” Internal Market Commissioner Thierry Breton wrote in a readout following the meeting. “All of this requires sufficient AI and human resources, both in volumes and skills. I look forward to progress in all these areas and we will come to assess Twitter’s readiness on site.”

Breton said the stress test will help Twitter to comply with the EU’s new Digital Services Act ahead of key deadlines and to prepare for a mandatory independent audit.

How EU Could Frustrate Musk’s Plans for Twitter: QuickTake

The European warning also came as Treasury Secretary Janet Yellen said Musk’s purchase of Twitter would warrant a government review if deemed to raise national security concerns, walking back her previous comments that played down the need for scrutiny. 

If there are risks in general, “it would be appropriate for Cfius to take a look,” she said Wednesday at a New York Times event in New York, referring to the Committee on Foreign Investment in the US, which she leads. 

In Europe, the DSA requires companies to take down illegal content and take a more aggressive approach on handling disinformation and hate speech. Companies could face fines up to 6% its annual sales, or even be banned from the platform if they continually break the rules.

Regulators have raised concerns following Musk’s takeover of the influential social media platform. The CEO’s emphasis on free speech and dramatic cuts to the company’s workforce make it more difficult for the company to follow EU laws including upcoming content moderation regulations and existing data protection rules.

Breton has previously warned Musk that he needs to abide by EU legislation. After Musk’s Twitter buyout was finalized the new owner tweeted, “the bird is freed,” Breton responded: “In Europe, the bird will fly by our rules.”

EU Commissioner Warns Musk Twitter Must ‘Fly by Our Rules’

Earlier this year, Breton had also reminded Musk that his free-speech focus on Twitter would be limited by the EU’s content-moderation laws. Breton traveled to Texas in May where the two said there was “no disagreement” over their approach to content.

Concerns among regulators have increased now that more than half of Twitter’s staff has either been fired or resigned. Ireland’s data protection watchdog said this week that it was “very concerned” after the mass exodus of staff and news that a top policy executive in Dublin had to sue the company to keep her job. Twitter representatives have tried to reassure regulators it will follow the EU’s data protection rules.

Musk’s Twitter Risks Being EU Outlaw After Staff Exodus

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(Bloomberg) — Amazon.com Inc. Chief Executive Officer Andy Jassy said buying behavior was still muted as shoppers looked for deals during the Thanksgiving weekend. 

“Consumers are spending, but they’re being careful about trying to stretch their dollar,” Jassy said Wednesday at the New York Times DealBook conference. The company is still assessing how buyers are reacting to the current environment, he said.

Amazon initially predicted a slow holiday season as inflation and rising rates hurt consumer sentiment. But fears of rising prices eased in recent weeks, pointing to a better-than-expected holiday season.

Deal-hunting was most pronounced for big-ticket discretionary items such as televisions and computers, Jassy said. “People care a lot about getting a bargain right now,” he said.

US shoppers ended up spending $11.3 billion online on Cyber Monday across retailers, according to Adobe Inc. This was up 5.8% from 2021, when supply-chain snarls prompted people to shop earlier and retailers to skimp on discounts.

Amazon has been criticized for selling a book and film promoted by basketball star Kyrie Irving and widely decried as antisemetic. The Anti-Defamation League asked Amazon executives last week to remove the title after it appeared on the site’s bestseller list. Jassy said the company is considering adding a content warning to the book but said outright removal would lead to a “slippery slope.”

Like other technology executives, Jassy has been reducing expenses as growth slows in several areas of Amazon’s business. Job cuts that began earlier this month are expected to reach 10,000, and Jassy has said they will last into 2023. The segment responsible for Alexa-powered devices has been particularly hard-hit. 

Bloomberg reported on Tuesday that Amazon’s cloud services arm expects to keep expanding and hiring next year.

Jassy said he doesn’t regret rapidly expanding capacity through the pandemic boom by building new warehouses and accelerating hiring, even if the company is now undergoing cuts. “We knew we might be overbuilding,” he said.

Tech layoffs were a consistent topic during the conference. Treasury Secretary Janet Yellen earlier said that the sector was being impacted by “some special factors” such as slowing ad revenue and a post-pandemic slowdown. 

(Updated with Jassy comments on content warning, cost-cutting)

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(Bloomberg) — David Velez, the Colombian billionaire who helped found the world’s biggest standalone digital bank, has given up his stock compensation after shares slumped 64% since their peak last year. 

Nu Holdings Ltd. said Velez, who serves as chairman and chief executive officer for the Sao Paulo-based company, asked to end a stock-based incentive program relative to 2021. The executive also declined any new stock compensation tied to performance this year and in 2023, according to a filing. Itau BBA said the decision boosts its forecast for Nubank’s next year net profit by 15%.

The move brings much-needed cost relief for the Brazilian lender, which so far has failed to assuage investor concerns that it will be hit hard by a surge in bad loans and high interest rates. Nubank, which counts Warren Buffett’s Berkshire Hathaway Inc. among backers, expects the move to bring savings of $365 million over seven years. 

Velez has an estimated fortune of about $4.2 billion, according to the Bloomberg Billionaires Index. He came under fire earlier this year as some investors flagged the contrast between what they deemed generous compensation packages for Nubank’s top management and a lackluster share performance. Stock-based compensation expenses alone totaled about $218 million in the nine-month period ended last Sept. 30.

Nubank has erased about $35 billion in market value since peaking a few days after its blockbuster initial public offering in late 2021. Shares fell 1.8% in New York trading on Wednesday to $4.19.

In a call with sell-side analysts, management acknowledged that the macroeconomic scenario is now more challenging than it was at the time of the program’s creation, according to Goldman Sachs Group Inc.

Bradesco BBI analysts led by Gustavo Schroden also welcomed the move, but said the ongoing deterioration in credit quality in Brazil and concerns about the pace of loan growth may weigh on the business. 

“We recognize the efforts on the efficiency front, but are questioning ourselves whether this could be a profit warning,” said Schroden, who has an underperform recommendation for Nubank. 

–With assistance from Felipe Marques.

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