32% of the S&P by market cap report this week, including the Magnificent-Now-Six-Post-Tesla-Bomb. GOOG, MSFT, AMZN, AAPL, and META will be driving the bus.
Per GS, big tech doesn’t like to bounce on earnings. AMZN has traded lower on 9 of 13 prints T+1. GOOGL has traded lower on 5 of 7 prints, META lower on 6 of 10, MSFT lower on 3 of 5.
It seems like all the central banks are on the pause-and-be-patient route. What if the Fed tells investors this week to be patient for rate cuts. Will they believe the Fed? The FT questions this possibility. Across the pond, the BoE is expected to stay pat on rates on Thursday as well, per the London Times. The ECB’s de Guindos told folks that they’re fighting inflation, and someday policy will reflect that fact, per Bloomberg. Singapore’s MAS kept its monetary policy settings unchanged as well.
Blackstone is building $25 bn worth of data centers, betting on AI and power consumption. When Blackstone bought QTS, it had $1bn properties in development…now it has $15bn, per BBG. Regular folks who will be sharing the grid with these centers are not going to be happy, as they’ll be sucking out an equivalent of 5mm homes of electricity.
Remember the Chinese financial/developer Evergrande? Well, it can’t come up with a restructuring plan, so a HK court says it has to liquidate, per Reuters. You have to wonder if the timing of the gov’s ban on short sales (by suspending lending of restricted shares per Reuters) is related. Strategic investors won’t be allowed to lend out shares during agreed lock-up periods starting today.
Economists are forecasting the China GDP deflator to decline until at least 3Q24, which would be the longest stretch of price declines since 1999, per Bloomberg. Imagine cheap prices here—a breakfast of citrus, bacon and eggs wouldn’t cost so much.
The US’ response to the deadly drone attack is critical. Iran is saying “don’t look at us”. The attack on a US base in Jordan by Tehran-backed militants killed 3 US soldiers and wounded dozens others, and while no one wants events like this to escalate already heightened tensions, at the same time the US is going to respond and wants to hold folks accountable.