Today is Wednesday, January 11, 2023.
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Wells Fargo Takes a Backseat
Wells Fargo (NYSE: WFC), which at one point was a leading mortgage lender, is now shrinking its mortgage business.
Details: The banking giant released strategic plans on Tuesday to reduce the size of its mortgage operations by only focusing on current bank customers and underserved communities. Wells Fargo is also ending its correspondent business involving third-party mortgages.
Background: Before the pandemic, Wells Fargo was one of the biggest mortgage lenders in the United States. The fact that it is reducing its mortgage business speaks volumes about the current state of the housing market and the direction of the bank. Wells Fargo cut hundreds of lending jobs back in December, according to HousingWire.
Stock Price: Shares of Wells Fargo are down 24% in the last 12 months, but are only down 1% in the last 30 days. Wells Fargo reports earnings on Friday.
Final Thoughts: Wells Fargo’s decision to shrink its mortgage business really shows the impact of higher mortgage rates. In a way, it’s an opportunity for Wells Fargo to limit risk. We’ll see if more banks follow suit, especially with the earnings season for big banks kicking off later this week.
Notable Earnings Today: KB Home (NYSE: KBH).
Notable IPOs Today: Plutonian Acquisition Corp. Common Stock (Nasdaq: PLTN).
Notable Equity Crowdfunding Campaigns Ending Today: Harmony Turbines (StartEngine), rThreat (StartEngine), Layers & Legends (Silicon Prairie).
Notable Economic Events Today: Crude Oil Inventories (10:30 a.m. ET).
Shiba Inu’s Early 2023 Surge, Explained
The price of the cryptocurrency Shiba Inu soared over 3% on Tuesday and is up over 12% so far in 2023.
Background: Crypto prices dramatically declined in 2022 because investors saw them as speculative assets at a time when interest rates were increasing.
Now: These speculative assets, including meme coins, are doing well because there are rumors that the Fed’s interest rate hikes might be ending this year. Some investors are now backing cryptos as a bet on the market - especially if the rate hikes come to an end.
Coming Soon: While it’s true that many altcoins are performing well in early January 2023, Shiba Inu is doing especially well because of the anticipation of the launch of Shibarium.
Definition: Shibarium is the new blockchain solution for Shiba Inu that is said to make transactions faster.
More Background: Shiba Inu has lost over 70% of its value since the start of last year. For some, Shiba Inu is just another meme coin.
Final Thoughts: While it’s been a good start for the year for Shiba Inu and other meme coins, this good feeling can’t last forever.
Equity Crowdfunding’s Growth Stays Flat
Total investments for startups raised through equity crowdfunding in 2022 stayed flat from 2021, according to Tech Crunch.
Final Thoughts: Investing platform KingsCrowd notes that Dalmore Group and StartEngine were the largest equity crowdfunding platforms in 2022.
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Trends to Watch
Departing: Stephanie McMahon resigns from WWE; Nick Khan now sole CEO (ESPN)
Sunday Funday: FedEx to further trim Sunday deliveries (Reuters)
Everything is Bigger in Texas: Tesla plans to spend $700M+ to expand Austin gigafactory (Austin Business Journal)
Bed Beth & Beyond Help: Bed Bath & Beyond reports wider-than-expected loss as possible bankruptcy looms (CNBC)
Euro Trip: European Stocks Are Outshining U.S. Peers (The Wall Street Journal)
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