Welcome to Read Sunday, your essential source for a concise and impactful weekly Business & Finance recap. Dive into the pivotal market highlights from the week, distilled for your convenience, and stay tuned for the thought-provoking editor's piece that rounds off your Sunday with insightful perspectives.

Market Recap

This Week’s Headlines

Public Markets

• Orange juice prices have been on a steady rise due to a combination of factors, including the impact of a widespread greening disease affecting citrus groves and extreme weather events. Frozen concentrate orange juice futures, in particular, have experienced a significant surge, with their prices more than tripling since late 2021. This surge has positioned orange juice as one of the standout performers among commodities this year, consistently setting new records week after week. As of Friday, frozen concentrate orange juice futures reached an all-time high of $3.91 per pound, a substantial increase from the price of $2.11 per pound observed in October of the previous year, according to data from FactSet. These price increases reflect the challenges faced by the citrus industry due to the greening disease and adverse weather conditions, impacting the supply and contributing to the notable uptrend in orange juice prices. (WSJ)

• Microsoft experienced an impressive increase in sales growth during the last quarter, driven by heightened demand for its cloud computing services, particularly in the context of the growing excitement surrounding artificial intelligence (AI). In its latest report on Tuesday, the company disclosed that its revenue had surged by 13% to reach $56.5 billion for the quarter ending in September. This figure exceeded the predictions of analysts and represented an acceleration from the 11% growth seen in the same period the previous year. Microsoft's Azure cloud business, a significant contributor to its growth, achieved a growth rate of 29%. While this figure was slightly lower than the pace observed in the same quarter of the previous year, it outperformed the preceding quarter and surpassed analyst expectations. Notably, around 3 percentage points of this growth can be attributed to the rising demand for AI services, highlighting the increasing significance of artificial intelligence in driving Microsoft's cloud business. (WSJ)

• Sam Bankman-Fried appeared in a New York courtroom on Thursday, where he and his legal defense team presented their case before U.S. District Judge Lewis Kaplan. Originally, the former cryptocurrency billionaire was slated to testify before the jury. However, Judge Kaplan decided to dismiss the jurors early so that they could deliberate on whether certain elements of Bankman-Fried's intended testimony, concerning legal advice he received while operating FTX, would be permissible as evidence in the court proceedings. (CNBC)

• Morgan Stanley made an announcement on Wednesday evening, stating that its board of directors had unanimously chosen a successor for CEO James Gorman. The selected individual is Ted Pick, who currently oversees the investment banking and trading operations at the firm. Ted Pick is set to assume his new role as CEO on January 1, while James Gorman will remain with the company as executive chair for an unspecified duration. (FT)

Economy

• Chinese stocks have experienced a significant setback, wiping out all the gains they had accrued over the past four and a half years. This development marks another unfortunate milestone in what has been a challenging year for the world's second-largest economy. The CSI 300 index (XX:000300) in China saw a decline of over 1% in its Monday session, closing at 3,474.24. This closing level is the lowest it has reached since February 21, 2019, as per FactSet data. When measured in U.S. dollar terms, the index has dropped by nearly 15% since the beginning of 2023. It's important to note that the CSI 300 index encompasses stocks traded on the Shanghai and Shenzhen stock exchanges. (MW)

• New home sales in the United States made a robust recovery, rising by 12.3% to reach a seasonally adjusted annual rate of 759,000 units in the most recent month. This marks the highest sales level since February 2022. Additionally, August's sales pace was revised upward from the initially reported 675,000 units to 676,000 units.

  This surge in new home sales can be attributed to several factors, including builders offering discounts to attract buyers, leading to the annual median house price dropping by the most significant margin since 2009. However, it's worth noting that the potential impact of rising mortgage rates, which are approaching 8%, could potentially dampen future demand despite the recent strong sales performance. (RET)

• Major energy producers are currently engaged in a contentious dispute over the allocation of billions of dollars in subsidies from last year's climate law. This conflict sets the Biden administration's objectives for economic growth against its commitment to reducing greenhouse gas emissions. The primary point of contention revolves around subsidies intended to support the production of clean hydrogen, which is considered a potential alternative to traditional fossil fuels like oil and natural gas, especially in industries such as steelmaking and trucking where renewable energy sources and batteries alone may not suffice. The Biden administration is in the process of determining how rigorously to define the energy sources that can be utilized to produce clean hydrogen while still allowing eligibility for some of the most valuable tax credits outlined in the Inflation Reduction Act. (WSJ)

Mergers & Acquisitions

• Exxon Mobil's (XOM.N) $59.5 billion acquisition of oil and gas producer Pioneer Natural Resources (PXD.N) may have surpassed Chevron's (CVX.N) $53 billion deal to purchase Hess (HES.N) in terms of total value, but it's Chevron that's bearing a steeper financial burden. Although Pioneer generates double the annual cash flow of Hess, the all-stock transaction values Pioneer at only 6.35 times its 12-month cash flow, in contrast to Hess's valuation at 11.65 times its cash flow. (RET)

• Bain Capital is reportedly considering various options for Rocket Software Inc., including a potential sale of the company. This transaction could value Rocket Software at over $5 billion, taking into account its debt. (BBN)

• ConocoPhillips (COP.N), one of the largest oil and gas producers in the United States, is reportedly contemplating making an offer for CrownRock LP, an energy producer situated in the Permian basin in west Texas. This move comes as consolidation within the energy sector gains momentum. ConocoPhillips, headquartered in Houston, has shown interest in participating in the sale proceedings for privately held CrownRock. CrownRock is estimated to be valued between $10 billion and $15 billion. (RET)

• Stellantis, the owner of Chrysler, has announced its investment of approximately $1.6 billion to acquire an approximate 20% stake in Zhejiang Leapmotor Technology. In addition to this stake, Stellantis will secure two board seats and establish an exclusive export partnership with Leapmotor through a joint venture based in Europe, where Stellantis will hold a majority ownership stake of 51%. (WSJ)

• Jazz Pharmaceuticals Plc is reportedly considering various strategic options, including the possibility of a sale, according to individuals familiar with the matter. The company is said to be in discussions with advisors to gauge interest from potential buyers. Additionally, Jazz Pharma is exploring other possibilities, which may involve a breakup or divestment of certain segments of its business. (BBN)

Earnings

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