Markets look positioned to extend their drop in 2024 as traders look to a number of datasets / Fed minutes as to whether interest-rate cuts are fairly justified. Nvidia dropped in pre-market trading as investors continued their selloff in last year's winning tech stocks while Bitcoin erased its gains from yesterday. Richmond Fed Prez Thomas Barkin remained quiet on giving a forecast on when the central bank might start cutting rates saying, "conditions are ever evolving. So too will our approach. So, buckle up. That's the proper safety protocol even if you expect a soft landing."
Markets look to Wednesday's data which includes the ISM manufacturing report for December and the JOLTS report of job openings for November, followed by minutes from the Fed's last meeting.
According to analysts at UBS, luxury stock investors should remain prepared for a weaker earnings season. Slowing demand from Chinese consumers with demand elsewhere not seemingly picking up any of the slack are told to be the root cause. LVMH and Gucci-owner Kering were both down ~3% early Wednesday.
The People’s Bank of China injects $50 billion (with a B) worth of low-cost funds into banks last month as the net injection marks the largest increase since Nov 2022 (lending program climbed to $456 billion at the end of December). It seems like Beijing is pulling out the stops to drive its markets and economy stronger before their Lunar New Year festivities, per Bloomberg.
Auto sales slow as prices remain inflated and loan rates have recently made cars less affordable. US sales softened at the end of last year as shoppers appear to be hesitant to indulge in 10% interest rates on car loans and ave prices around $48k. According to Bloomberg, sales likely slipped to a seasonally adjusted annual rate of about 15.4 million vehicles in Dec, down from 15.5 million in the prior two quarters. While vehicle sales are down, auto makers may not be willing to cut prices because they are making more money while selling fewer cars, catering to higher income households.
Starbucks is aiming to increase its morning traffic by adding two egg dishes (see if they sound good to you):
i) a chicken, maple butter and egg sandwich
ii) a potato, cheddar and chive bake
The idea is to bolster its afternoon business and create products designed to appeal to customers at specific times of the day. I’m sure the sandies won’t necessarily be cheap alternatives to breakfast.
Bloomberg notes that the U.S. has become the biggest exporter of LNG, overtaking Australia and Qatar. Increased production in the U.S. should help to offset any potential supply disruptions in the Middle East.
The WSJ, citing data from a subscription-analytics provider, Antenna, notes that “about one-quarter of U.S. subscribers to major streaming services—a group that includes Apple TV+, Discovery+, Disney+, Hulu, Max, Netflix, Paramount+, Peacock and Starz—have canceled at least three of them over the past two years.”
China removed the press and publications regulator after its most recent decrees sparked a renewed selloff in tech giants, per Reuters.
Per the WSJ, Disney reached a deal with activist investor ValueAct that secures its support for the company’s slate of board nominees at the upcoming 2024 shareholder meeting. In exchange for its support, ValueAct executed a confidentiality agreement that allows it to “peek behind the curtain” and share company information.