To the races, as only equity markets can do with an inflation reading that is better than expected. Inflation was flat in Oct m/m and up 3.2% y/y. Core CPI is at a 2-year low. So, traders are hoping that the Fed will pack their bags for a while on hawkish interest rate speak. Ex food and energy, core CPI was up 0.2% m/m and 4% y/y. We’re still far above the 2% target, but it gives folks hope that inflation is peaking. The reading brought the 10-yr UST yield down below 4.5%.
Investors are at their first equity overweight since April 2022, with a 2024 playbook of a soft landing, lower rates, and a potentially weaker dollar, per Bloomberg. Fed swaps are pricing in a 50bps cut in Jul right now. PIMCO is calling “again” for a year of the bond in 2024…does anyone remember this call in early 2023?
Whether you like pumpkin or strawberry rhubarb, there seems to be a lot of pie being shared. GOOG’s economics expert mistakenly shared during the current antitrust trial that Google pays Apple 36% of the rev it earns from search advertising made through Safari browser. GOOG’s main litigator visibly cringed when the UofC professor blurted it out, because now people can estimate that in 2021 they probably paid AAPL $18bn, translating into $50bn in overall revs—which equates to roughly one-third of GOOG’s overall search rev (~$149bn).
SNAP Partnering with AMZN on Ads—you can buy AMZN products directly from ads on SNAP. Kind of like the recent announcement whereby you can buy products from AMZN ads on Instagram and Facebook. The co is reacting to competitors like TikTok and Shein, per Reuters. So, now you and your kids can shop from anywhere, anytime. It makes me respect the guy who stopped buying everyday junk, sold all his stuff, bought a sailboat, and now lives for $1,900/mo with his wife and kid—enjoying the outdoors and experiences versus a new face cream.
Although HD beat on their top and bottom lines, their sales were down -3% y/y, and they gave a cautious forecast. Customers are doing partial versus full remodels. High inflation and rates squeeze their customers’ wallets.
Supposedly Biden and Xi will announce a crackdown on fentanyl from China.
NVDA unveiled its newest chip for training AI models, the H200, per CNBC.
Hyundai is increasing wages for US workers in Georgia and Alabama, per Bloomberg. After seeing automaker peers get trounced by unions, they might as well get ahead before they’re next.