Eight young females have been charged with second-degree murder in the stabbing death of a 59-year-old Toronto man, Toronto Police Homicide Detective Sergeant Terry Browne said at a news conference on Dec. 21. He said it is believed the girls were trying to get a bottle of alcohol from the victim.
“Eight young girls and most under the age of 16—if this isn’t alarming and shocking to everyone, then we’re all in trouble quite frankly,” Browne told reporters.
“I’ve been in policing for almost 35 years and you think you’ve seen it all,” Browne said.
“Anyone who isn’t shocked with hearing something like this has clearly just thrown in the towel and just said that anything is possible in this world.”
The girls made their first court appearance on Dec. 18 and have been remanded into custody. The next court date has been set for Dec. 29.
Witnesses Needed
Police have asked members of the public to come forward if they witnessed the event or have video footage. Investigators are requesting any video surveillance from the intersection of York Street and University Avenue in Toronto on Dec. 18 at 12:05 a.m. Any surveillance footage in the area from an hour before that until a couple hours after that are appreciated as well.
Browne described the alleged attack as a “swarming.” He said the girls—three aged 13, three aged 14, and two aged 16—were allegedly in an earlier altercation in the area earlier in the evening of Dec. 17, around 10 p.m. Police said the girls met through social media and came from varying parts of the city.
“I wouldn’t describe them as a gang at this point,” said the police officer, adding that what is alleged to have occurred “would be consistent with what we traditionally call a swarming or swarming type of behaviour.”
“Maybe these were eight young women that wanted to make a name for themselves and see if they could become socially famous,” he said.
Police believe they all acted in unison.
‘Swarm’
“They are all equally culpable,” he said. “There is no doubt in our minds that they were all working as a singular entity in a swarming mob mentality when they chose to attack this man.”
“We don’t know how or why they met on that evening and why the destination was downtown Toronto,” said Browne.
“We don’t know how long they’ve been acquainted.”
Three of the youth have had prior contact with police services. Police also secured a number of weapons but have not indicated what was taken into evidence.
The homicide occurred on Dec. 18 at approximately 12:17 a.m. Police responded to a call for help to the York Street and University Area, after being told that a man had allegedly been assaulted and stabbed by a group of teenage girls.
The victim was transported to the hospital with life-threatening injuries but did not survive. The man’s name has not been released as police said next of kin is still being notified. The police will not name the young girls as their identity is protected by the Youth Criminal Justice Act.
The man was not homeless, although police said he had moved into the shelter system in late fall, despite having a very supportive family in the area.
“I wouldn’t necessarily call him homeless, maybe just recently on some hard luck,” Browne said.
Philadelphia Hits 500 Homicides For Second Year In A Row
Philadelphia marked a second year of out-of-control violence, hitting 500 homicides this week as elected officials scramble to address two of the worst years in a long time.
“As of today, 500 people’s lives have been cut short by senseless violence in our city,” said Mayor Jim Kenney (D) during a Monday press conference. That’s 500 of our friends, neighbors, colleagues and family members. As we enter this holiday season, I can’t help but think of all the incredible potential that has been extinguished by this loss of life.”
Most affected are black males between the age of 18 and 45.
While down 7% from 2021, when the city reported 562 killings – the highest on record, Philly’s crime wave has caught the attention of state lawmakers, who in November took the unprecedented step of impeaching District Attorney Larry Krasner by a vote of 107-85, over the city’s lack of action and alleged misconduct.
Krasner was also accused of obstructing a House committee investigation, according to Fox News.
“They have impeached me without presenting a single shred of evidence connecting our policies to any uptick in crime,” Krasner said at the time. “We were never given the opportunity to defend our ideas and policies – policies I would have been proud to explain. That Pennsylvania Republicans willfully avoided hearing the facts about my office is shameful.”
Two weeks ago we reported that crime in Philadelphia has gotten so out of control that local gas station owners have turned to hiring heavily armed guards.
“They are forcing us to hire the security, high-level security, state level,” said Karco gas station owner, Neil Patel, who has recruited Kevlar-clad S.I.T.E. agents packing AR-15s or shotguns. “We are tired of this nonsense; robbery, drug trafficking, hanging around, gangs,” Fox5 reported at the time.
The final straw for Patel after his business was reportedly vandalized by young people who stole an ATM machine. His car has also been a casualty of crime, according to the report.
“We wear Kevlar, we are trained, my guards go to training every other week, they’re proficient with [their guns] and with their taser, they know the law,” said police chief Andre Boyer.
Gonzalez, in an interview with Fox News, made the remark while discussing a video he filmed at a processing center in El Paso, Texas, last week.
“I’d been to that processing center many times, but I’ve never seen it that bad,” he added, noting that the “absolutely horrible” conditions had not improved in the five days since he took the video.
NEW: Video provided to @FoxNews by TX Congressman @RepTonyGonzales shows extreme overcrowding at the Border Patrol Central Processing Center in El Paso, TX. Congressman Gonzales says he took the video on Friday, when 4,600 migrants were in federal custody. Capacity is only 1,040. pic.twitter.com/dpvH0NNseJ
“I got an update last night,” the congressman advised. “There’s still over 4,000 migrants in that center, that processing center, which is 400 percent past capacity. And here you have the administration saying, ‘We need to do away with Title 42.’”
Describing the scene in El Paso, Gonzalez said that National Guard members have put up razor wire fence along the border.
“It’s out of a movie,” he said. “It’s out of an apocalyptic time”
Title 42
Title 42, invoked in March 2020, allows U.S. border patrol officials to quickly expel asylum-seekers from countries with high infection rates of COVID-19.
For months, the Biden administration has sought to terminate the Trump-era policy, holding that it is no longer necessary given the overall improvement in the nation’s public health situation. However, those efforts have been blocked by legal challenges.
On Monday, the Supreme Court granted a temporary stay on the expiration of the policy, which a lower court had ordered to occur by Dec. 21, while the court decided on an emergency request from 19 Republican-led states to reverse the lower court’s ruling.
In its Tuesday response to those states’ request, the Biden administration asked the Supreme Court to delay the expiration of Title 42 until after Christmas, due to reduced staffing over the holiday and other operational issues.
While also acknowledging that the termination of the Title 42 policy would likely result in disruption and a “temporary” increase in illegal border crossings, the administration argued that the solution to that problem should be through Title 8immigration law rather than the indefinite extension of “a public-health measure that all now acknowledge has outlived its public-health justification.”
Meanwhile, proponents of Title 42 hold that the policy’s termination would create an untenable situation for those states that are already overwhelmed by the dramatic increase in illegal immigrants crossing the border.
“Getting rid of Title 42 will recklessly and needlessly endanger more Americans and migrants by exacerbating the catastrophe that is occurring at our southern border,” Arizona Attorney General Mark Brnovich noted on Monday.
According to Gonzalez, the surge of illegal immigrants at the border has inundated the city of El Paso, in particular, to the point where individuals are now being housed in buildings provided by the local school district as well as at the El Paso Convention Center.
“There’s talk of using Fort Bliss,” the congressman added, “which is the Army base there in El Paso.”
Gonzalez said that the Biden administration’s plan is to erect temporary tents along the border to increase holding capacity while they create a new expedited removal process apart from Title 42.
“What that means is, ideally, people that do not qualify for asylum get removed,” Gonzalez said. “But I worry that they’re only going to increase capacity and then just release more people into El Paso and throughout the country.”
And Republicans are not the only people with such concerns.
Bipartisan Fears Escalate
California’s Democrat Gov. Gavin Newsom, for instance, told ABC News last week that he feared his state would not be able to handle the influx of illegal immigrants that an end to Title 42 would create.
“The fact is, what we’ve got right now is not working, and it’s about to break in a post-42 world unless we take some responsibility and ownership,” Newsom said. “I’m saying that as a Democrat. I’m not saying that to point fingers. I’m saying that as a father, I’m saying that as someone that feels responsible for being part of the solution, and I’m trying to do my best here.”
Additionally, describing the situation at the border as “unsecure” and a “humanitarian and security nightmare,” newly independent Rep. Kyrsten Sinema of Arizona warned Tuesday that Title 42’s expiration would only worsen the crisis and allow “thousands of migrants to enter Arizona, Texas, and other border states without the proper procedures, plans, or infrastructures in place.”
Hunter Biden Hires Bill Clinton’s Criminal Defense Attorney As Congressional Investigations Loom
As House Republicans gear up to grill Hunter Biden over a wide range of alleged influence peddling and other illegal activities with members of the Biden family, the First Son has hired famous white collar criminal defense attorney Abbe Lowell of the firm Winston and Strawn.
Lowell has represented several high-profile Democrats over the years, including former President Bill Clinton, former Sen. John Edwards (D-NC), Sen. Bob Mendez (D-NJ) and Jared Kushner during the Mueller Russian collusion probe.
“Hunter Biden has retained Abbe Lowell to help advise him and be part of his legal team to address the challenges he is facing,” said Hunter Biden attorney, Kevin Morris, adding “Lowell is a well-known Washington based attorney has represented numerous public officials and high profile people in DOJ investigations and trials as well as Congressional Investigations. Mr. Lowell will handle congressional investigations and general strategic advice.”
According to NBC News, Lowell will be primarily responsible for coordinating Hunter Biden’s response to the anticipated congressional oversight investigations, as well as other legal issues.
The incoming House Oversight Committee chairman Rep. James Comer, R-Ky., said at a news conference in November that Hunter Biden and other Biden family members will be a major focus, specifically if the family’s business activities “compromise U.S. national security and President Biden’s ability to lead with impartiality.” -NBC News
The White House in November accused Congressional Republicans of stoking long-debunked conspiracy theories” in regards to allegations from House lawmakers that President Biden was actively involved in overseas business dealings with his son Hunter.
“Instead of working with President Biden to address issues important to the American people, like lower costs, congressional Republicans’ top priority is to go after President Biden with politically-motivated attacks chock full of long-debunked conspiracy theories,” said White House Counsel office spokesman, Ian Sams.
Except, here’s former Biden business partner Tony Bobulinski explaining how the Biden family brought him in on a shady Chinese energy company deal.
In mid-November, after Republicans retook the House in the midterm elections, GOP Reps. James Comer and Jim Jordan held a press conference to provide details into their upcoming investigations into the Bidens and the Biden administration.
According to Comer, whistleblowers have come forward to detail how Hunter and family “flourished and became millionaires simply by offering access to the family,”Fox News reports.
“Was Joe Biden directly involved with Hunter Biden’s business deals, and is he compromised? That’s our investigation,” he said.
Republicans have alleged a “decade-long pattern of influence peddling, national security risks, and political cover-ups” involving the Biden family.
“Committee Republicans’ investigation has uncovered evidence demonstrating deliberate, repeated deception of the American people, abuse of the Executive Branch for personal gain, use of government power to obstruct the investigation and prevent transparency, and potential violations of the United States Constitution’s Foreign Emoluments Clause,” states a GOP report released Thursday.
“The President’s personal participation in his family’s global business ventures—committed through and by a complex network of relatives and associates to enrich the Biden family—has exposed the United States to national security risks that could be leveraged by our enemies to undermine the Office of the President.”
Tennessee’s two Republican senators and Gov. Bill Lee are demanding a response from Immigrations and Customs Enforcement (ICE) on its plans to transport illegal immigrants from New Orleans to the state in a letter sent on Tuesday.
Sen. Marsha Blackburn (R-Tenn.) posted her frustration with the agency’s lack of transparency, stating “ICE can respond to media requests about trafficking illegal immigrants to Tennessee, but won’t get back to us with information about who they are dropping off in our state.”
However, Blackburn said on Fox News Wednesdaythe plan is to have “50 at a time” and “at least two buses, maybe more, every single week” into Tennessee.
The agency responded to a request for more information by The Epoch Times with additional information on their plan, noting illegal immigrants had not yet been moved into the state.
The agency told The Epoch Times it has not transported noncitizens for release to Tennessee yet, but officials are in communication with the relevant nongovernmental organizations (NGO) in Nashville, which have volunteered to “assist with noncitizens that may be transported to the Nashville area.”
“Noncitizens apprehended and determined to need custodial supervision are placed in detention facilities and those released from secure custody are part of ICE’s Enforcement and Removal Operations (ERO) non-detained docket,” an ICE spokesperson said in an email. “ERO officers weigh a variety of factors when making general custody determinations, including criminal record, immigration history, community ties, flight risk, and whether the individual poses a potential threat to public safety.”
The spokesperson added noncitizens placed on ICE’s non-detained docket are enrolled in the agency’s “Alternatives to Detention (ATD) program.” The ATD uses technology, case management, and other tools to manage compliance of individuals with their release conditions.
ICE had no further information to release to The Epoch Times as of Wednesday afternoon.
ICE Coordination With NGOs in Nashville
ICE’s ERO officials anticipate the NGO community will primarily help with hotel and onward movement of the illegal immigrants, officials stated.
ICE would not release information on the NGOs they were partnering with, but the letter sent by Blackburn and Sen. Bill Hagerty (R-Tenn.) to ICE Acting Director Tae Johnson identifies the group as the Tennessee Immigration and Refugee Rights Coalition (TIRRC).
“We have learned that the New Orleans ICE field office has been working in coordination with TIRRC, a left-wing immigration advocacy group, to bus these immigrants to Tennessee,” the senators said in their letter. “We have learned that as many as 50 single-adult, detained illegal immigrants could be bused to Tennessee at a time, with the possibility of multiple busloads each week. Further, these individuals would be released into Tennessee while they await court proceedings.”
The senators say they are troubled by the report and request more information given “previous instances of ICE busing immigrants to Tennessee without notice.”
TIRRC wrote on Twitter the Department of Homeland Security had listened to “what local organizations and communities have been demanding.”
“DHS took steps to provide more transparency and better coordination to get folks home for the holidays,” the organization wrote on Twitter. “We cannot allow for disinformation, fear, and partisanship to dictate how we treat other human beings. Shame on Gov. Bill Lee’s office for not showing Tennessee’s values of family, integrity, and welcoming others.”
The organization said they, along with other Tennesseans, local organizations, and faith communities are “ready to rise to the opportunity by leading with values and welcoming with dignity.”
TIRRC did not respond to an emailed request for comment by press time.
The governor’s office said notices from the Biden administration on Monday are the first time federal officials have notified the state of plans to relocate “single adult detainees into Tennessee,” adding they have received no further details.
“We know that ICE is seeking to move these single adult detainees to Tennessee, as the federal government is overwhelmed by the continued flood of people and drugs illegally moving across the nation’s border,” a representative for the governor’s office said in an email. “As you may have seen, ICE has said they are working with the TIRRC in Nashville. However, the federal government still has not provided real transparency into the vetting process or included answers as to when, where and how many illegal migrants they intend to transport to Tennessee. We continue to demand answers and demand they change this plan.”
Lee said on Fox News Wednesday morning that “this is something new for Tennessee,” adding the Biden administration “is requiring Tennesseans to pay the price for their failures.
“Tennesseans are already paying a huge price in the way of fentanyl deaths and trafficking—we’re already paying a price,” he said. “But now we’re being asked to pay a greater price for the failure at the border and we can’t take that much longer. Americans can’t take this much longer.”
ICE’s Reasoning Behind Releasing Illegal Immigrants in Tennessee
ICE explained Customs and Border Patrol (CBP) screens and vets all migrants encountered at the border against public safety databases, and “any migrants who may pose a threat to national security or public safety are detained.”
The agency said as part of contingency planning they notify local and state-level officials when they are coordinating with local NGOs that intend to offer support to noncitizens.
The agency says those released through ATD must be 18 years of age or older, effectively removable from the United States, and in some stage of the immigration process.
Those released pending court proceedings must provide an address and “follow strict reporting requirements.”
$1.7 Trillion Omnibus Spending Package Passed By Senate
Update (1430ET): The Senate on Thursday voted to pass a $1.7 trillion omnibus package that had previously hit a snag over immigration reform.
The passed legislation provides Ukraine with $45 billion in additional military and economic aid, and sets aside $38 billion for emergency disaster assistance,The Hill reports.
It also includes reforms to the Electoral Count Act in response to the Jan. 6, 2021, attack on the U.S. Capitol, clarifying that the vice president does not have the power to overturn the results of a presidential election.
The package passed with a large bipartisan majority, 68-29, wrapping up the Senate’s legislative business in the 117th Congress a few days before Christmas.
The omnibus bill represents one of several major bipartisan legislation accomplishments of President Biden’s first two years in office, along with the $1 trillion Infrastructure Investment and Jobs Act; the Bipartisan Safer Communities Act, to address gun violence; and the $280 billion Chips and Science Act, to improve U.S. competitiveness with China. -The Hill
The bill also spends $858 billion on defense – a 9.7% increase, as well as $772.5 billion on non-defense – a 5.5% increase.
There is also a 22% increase, or $118.7 billion, for Veterans Affairs medical care, and $59 billion for programs which last year’s bipartisan infrastructure bill cover.
“The world’s greatest military will get the funding increase that it needs, outpacing inflation. Meanwhile, non-defense, non-veterans spending will come in below the rate of inflation, for a real-dollar cut,” said Senate Majority Leader Mitch McConnell (R-KY), who hailed the bill as a victory for Republicans due to the increase in defense spending.
Senate Majority Leader Chuck Schumer warned that a failure to pass the bill would have risked freezing federal funding levels well into 2023 – or potentially even a government shutdown.
“To go to a [continuing resolution] or even worse, a government shutdown, would be a huge disservice at any time, and particularly at holiday season, to the American people,” he said.
Some key Democratic initiatives were left out of the final version, including a proposal to extend the pandemic-era enhanced Child Tax Credit and the SAFE Banking Act, which would protect financial institutions which do business with cannabis-related businesses.
* * *
Update (0953ET):Senate Majority Leader Chuck Schumer (D-NY) says the chamber has finally reached a deal to move the omnibus forward.
“It’s taken a while but it is worth it,” said Schumer, who says that while timing is unknown, he hopes to get a line of amendments through the voting process quickly. “We will vote on all of the amendments in order and then vote on final passage.”
WE HAVE A DEAL. Senate has a time agreement to get to the Omnibus. There is a line of amendments and Schumer is hoping to get through the votes quickly. Final timing still not 100%.
It appears Schumer’s savior came in the form of one Sen. Kyrsten Sinema (I-AZ), who on Thursday introduced an amendment to beef up border funding and resources for communities and to extend Title 42, the health policy which allows border agents to quickly deport migrants seeking asylum.
A Trump-era border policy that allows immigration officials to turn quickly expel migrants without processing during a public health crisis is currently holding up passage of the omnibusspending package.
The effort, led by Sen. Mike Lee (R-UT), would keep Title 42 in place – and would cut funding for the office of Department of Homeland Securitychief Alejandro Mayorkas unless the Biden administration reinstates the border control policy.
“We have a difference of opinion on immigration policy. We’re not going to solve that in this budge,” said Sen. Chris Murphy (D-CT), chair of the Senate Appropriations Homeland Security Subcommittee, who took aim at Lee’s immigration efforts. “And to let that disagreement take down aid to Ukraine to keep people alive during a cold winter, especially tonight, is pretty unthinkable.”
Lee, meanwhile, told Fox News on Wednesday night “I insisted that we have at least one amendment, up-or-down vote, on whether to preserve Title 42. Because Title 42 is the one thing standing between us and utter chaos. We already have mostly chaos. This would bring us to utter chaos if it expires, which it’s about to.”
The effort to maintain Title 42 has scuttled hopes that lawmakers could vote on the omnibus overnight, however on Wednesday evening, Senate Minority Whip John Thune (D-SD) said he thought they might be able to move forward on Thursday morning.
“There’s been some progress made. … I wouldn’t say breakthrough yet,” he said.
The Biden administration has sought to end the practice since the spring, arguing that the pandemic health emergency it was based on has subsided (despite extending the emergency last month). A group of GOP-led states has sued the administration in federal court to block him from ending the policy.
Title 42 was ruled “arbitrary and capricious” by a district court judge, and ordered the Biden administration to end it on Wednesday, but Supreme Court Justice John Roberts halted that deadline on Monday after the court was asked to intervene. On Tuesday, the Biden administration asked the court to end the program, but, asked for an extension until at least Dec. 27 to allow immigration officials time to prepare for a wave of illegal immigrants at the southern border.
While border agents are already encountering thousands of immigrants every day, the number is expected to rapidly spike when the program ends. Notably, the Biden administration has already minimized the use of Title 42 – instead processing immigrants under Title 8, which allows officials to screen for asylum claims, the Washington Examinernotes. Title 8 also allows border officials to refer migrants for criminal prosecution for repeat illegal entries.
US officials have expelled around 2.5 million migrants under Title 42, nearly two million of which have been carried out by the Biden administration.
A Democratic Senate aide told Punchbowl News that Lee’s insistence on Title 42 is a “poison pill”. If Lee’s amendment passes, Democrats say the omnibus bill would be “dead on arrival” in the house, which votes after the Senate. Democrats are reportedly circulating a competing amendment on Title 42 aimed at attracting centrists, and dissuading them from voting on Lee’s amendment.
“We have a difference of opinion on immigration policy. We’re not going to solve that in this budget,” said Sen. Murphy. “And to let that disagreement take down aid to Ukraine to keep people alive during a cold winter, especially tonight, is pretty unthinkable.”
Talk about a guilt trip…
According to Senate Majority Leader Chuck Schumer (D-NY), the chamber will work until 2am on Thursday. “It is my expectation that we will be able to lock in an agreement on the omnibus later this morning. We are very close, but we’re not there yet,” he said, asking members to stay near the chambers to “minimize any delays.”
Following an incident of severe turbulence aboard a flight from Phoenix to Hawaii in which 36 people were hurt, some media outlets published misleading reports claiming that turbulence is now more dangerous because of climate change.
Airplane turbulence might be getting more common — a union representing flight attendants is warning — thanks to climate change. https://t.co/fIBiKQl1cK
As detailed in the above report, the source for articles was one Taylor Garland, spokesperson for the Association of Flight Attendants, who claimed turbulence caused by severe weather is going to become more common due to climate change.
There is, of course, no actual data to support that statement… from a flight attendant.
You are not a serious news source if you push things like this.
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Schizophrenic Morgan Stanley EV Note Saw Uber-Bull Adam Jonas Re-It Overweight $330 Target, Hours Before Tesla Plunged Further
Just hours before today’s shellacking in shares of Tesla, Morgan Stanley looked as though they were starting to wave the white flag not just on the Elon Musk-led company, but on electric vehicles as a whole.
In a note released Wednesday called “Tesla’s Decline: Will Big Auto ‘Blink’ On Electric Vehicles?”, analysts led by Tesla sycophant Adam Jonas posed the question of whether or not it is “time to consider alternative technological paths in addition to EVs”.
The note can only be described as schizophrenic. In it, Jonas makes key arguments against Tesla and the industry, while noting the progress of Tesla’s competitors. Despite that, Jonas doesn’t change his overweight stance on the name.
Despite skepticism, the note – which was released just hours before Tesla would shed another 11% – says it views the sell off in shares of Tesla as a “buying opportunity” and perfunctorily reiterated an overweight rating on the name. Great work, guys.
Jonas first explored the impact of rising rates on the sector: “It was far easier to take EV hegemony for granted at 0% Fed funds and when Tesla was a trillion $ company. Are we sure batteries are the only (or ultimate) path to decarbonizing transport? Is the technology cheap enough? Is our electric grid ready? Are the enabling policies viable? Stories like Porsche (covered by Harald Hendrikse) investing in eFuels as a ‘dual path’ / complementary technology to EVs is worth watching.”
And another brick in the wall of Jonas’ bull case, quizzically, was that Tesla was likely going to continue discounting: “Tesla’s price cuts started in China and we expect them to quickly spread to Europe and the US. While circular in nature, lower EV prices are important for the next leg of mass adoption, but depress the returns of many of the companies expected to compete against Tesla.”
Jonas also seemed to allude to how he thought Ford was leading the industry on the shift to EV: “We believe Ford’s divisional re-organization may be an important moment for the industry in understanding the trade-offs of capital allocation and margin loss vs. terminal value preservation in legacy autos. While the intercompany transfer pricing and impact of government incentives may take a while to sift through, we expect a more open and balanced understanding of the risk/reward for EVs”.
He also looked at Toyota as a new formidable competitor in the space: “Akio Toyoda, leader of the world’s largest and highest valued legacy auto company, Toyota (covered by Shinji Kakiuchi), refers to the ‘silent majority’ of auto executives who question over-committing to EV strategies at the sacrifice of other decarbonizing technologies. The vocal majority of auto industry followers (this author included) had criticized Toyota’s resistance to keep up with EV launches from competitors. While Toyota will eventually achieve scale in EVs, the later/follower approach may prove optimal over time.”
He also believes managing cash burn is going to be crucial for the industry: “With respect to emerging (non-Tesla) EV startup strategy we believe ‘hunkering down’ to manage the pace of cash burn is a winning strategy. We anticipate more challenging capital markets environment may limit the number of EV players that can achieve sustainable scale.”
Finally, he comments that many large players in the industry will be forced to rejigger their spending plans and timelines now that the playing field has become saturated and rates have risen:
“Volkswagen (covered by Harald Hendrikse) spends its entire enterprise value in combined capex + R&D in just ~1 year. How long companies spend at this rate? In our view, it’s the capital not deployed that can frequently create the most value in auto stocks. In 2023, we think legacy automakers like GM and Ford have an opportunity to reconsider the quantum and timing of their EV investment plans last established during a very different economic and interest rate environment of 2020/2021.”
Big Tech Is Unlikely To Find Smooth Comeback In 2023
By Heather Burke, Bloomberg markets live reporter and strategist
Big Tech’s fall from grace has been one of the abiding market themes of 2022. But the earnings outlook, macro backdrop and valuations offer little support for a big turnaround in 2023 after the worst year since the global financial crisis.
The Nasdaq 100 has plummeted more than 30% this year, lagging the S&P 500, as the Federal Reserve and other central banks aggressively hiked rates. Surging bond yields made highly-valued tech stocks look less attractive. This value destruction has made so-called FAANG stocks such as Amazon.com and Apple less important to the S&P 500 as some lost more than a third of their value
Now inflation and monetary tightening have raised the prospect of a global recession. If the US economy contracts, technology stocks will face a drag from lower corporate earnings.
The Nasdaq’s 12-month forward EPS has dropped more than 4% from the start of October through Dec. 16, compared with about 2.7% for the S&P 500. Another measure shows Nasdaq 100 EPS y/y growth has fallen to almost zero.
Big-tech earnings also don’t command the premium they used to versus bonds. The spread between the Nasdaq 100’s earnings yield and the 10-year Treasury yield narrowed to the least since 2009 in October. Tuesday’s premium of about 49 basis points is well below a 10-year average of around 191 basis points. This makes tech stocks less attractive, even if the Fed slows tightening.
Inflation may be decelerating in top-line economic data but that doesn’t mean it has fully worked its way through future earnings — especially with the sense that some behemoths have reached peak growth. Amazon projected the slowest holiday-quarter growth in its history and is cutting jobs. Subtracting still-elevated inflation from the Nasdaq 100 earnings yield leaves the real stock yield negative, although improving, and well below a 10-year average.
Tech is often seen as a long-duration play, yet has been unable to benefit from bonds’ horrible year. With debt traders betting on rate cuts in 2023 despite the Fed’s hawkish messaging, long-dated Treasuries could get a bid — further weighing on stocks’ relative attractiveness.
Valuations are a mixed bag. The Nasdaq 100’s 12-month forward P/E of about 20.3 is in line with the 10-year average of ~20.5. While the Nasdaq 100 is nowhere near the valuations seen before the dot-com bust, in 2002 valuations fell below 20. With the prospect of both an earnings and an economic recession, it’s conceivable there’s still froth to be shaken out. Bernstein noted this week that tech is trading at a 29% premium to the market, down from a Nov. 2021 peak of 52%, but still above its historical average of 25%.
The technical setup is not supportive for the Nasdaq 100. The gauge has been under its 200-DMA for the longest period since the tech bubble. It’s also testing a long-term uptrend in place since 2008 and has failed to overcome a technical downtrend that’s been in place since the start of the year.
To be sure, the Fed could engineer a soft landing and earnings may hold up — companies tend to beat. If, however, the economy holds its poise, earnings may not be affected — but then the Fed would be less likely to cut rates, which won’t augur well for stocks
Tech’s 2023 may not be the nightmare of 2022, but its era of stellar growth has stalled, if not ended.
Tesla Offers Rare $7,500 Discount To Boost Holiday Deliveries
One day after we reported, Tesla Inc. implemented a hiring freeze and a new round of layoffs. News for the EV company worsened as it offered a rare discount on Model 3 and Model Y vehicles, a sign that demand is softening.
Discounts on Model 3 and Model Y vehicles delivered in the US this month had discounts of $7,500, according to the company’s website. That’s up from the $3,750 credit it offered previously. On top of that, another perk was offered: free supercharging for 10,000 miles.
Electrek pointed out customers have canceled their orders and held off on their purchases until new government tax credits take effect in January, weighing on demand.
Tesla was already offering a discount, and to double it, along with free supercharging, indicates the company is dissatisfied with demand figures for the holiday quarter.
“The fact they seem to be cutting price to increase deliveries volumes doesn’t raise confidence, particularly at a time where we see increasing competition,” Craig Irwin, a senior analyst at ROTH Capital Partners, told Reuters.
It’s unusual for Tesla to offer such discounts and perks. Elon Musk has said the company doesn’t discount. The billionaire also predicted an “epic” end of the year for the company but discounting and perks suggest otherwise.
Furthermore, the news of the company expected to make layoffs during the first quarter of 2023 is another ominous sign of demand problems that may extend into the new year.
Tesla said in October it would miss the vehicle delivery target for the year. Shares of the company have slid more than 60% year-to-date, possibly reflecting a bumpy future.
