Dec personal spending was up higher than expected, whereas the Fed’s favorite gauge of underlying inflation didn’t rise much. Market’s conclusion? Rates moved up a bit.
Global credit spreads are tightening, with corporate bond investors locking in high yields. The premiums of notes in a BBG index of IG and junk credit fell to their lowest levels since Jan 2022. Per NOSO, US IG spreads were 11 bps tighter than their Asian peers.
A not-so-hot revenue forecast is leaving doubters in the driver’s seat, per Bloomberg. It’s hard when you supply to data center, EV and non-AI markets. Some companies had a decent quarter (Visa, Amex), so we’re seeing more have’s and have not’s this earnings season. Check out Tata. They’re doing the anti-Tesla-move by making fewer cars at higher prices at Land Rover.
Investors threw $11.9 bn into the Chinese stock market for the week Wed/Wed, the 2nd-largest amount ever, and the largest since Jul 2015, per NOSO. But BofA cautioned, “no one believes it’s an investment”—so I guess it’s a short-term like versus longer-term love. It sounds like the gov is going to spend—but only on sectors of natl importance, so stock pickers take note.
Musk’s AI start-up is trying to raise $6bn from folks at a $20 bn valuation, in hopes to take on OpenAI, per FT. The Tesla board of directors can’t be happy. After yesterday’s rout on the back of lowered expectations, today they’ll probably get more shareholder lawsuits.
Tokyo consumer prices ex fresh food declined more than expected to 1.6% in Jan—as the BOJ is trying to get off the negative rate path, that type of cooling doesn’t help.
After a tough time this past year, oil may have its biggest weekly gain since Oct because of geopolitics, lower US crude stockpiles, and the potential for China to stimulate its economy.
Levi Strauss is shedding >10% of its employees, per CNBC. Norfolk Southern is reducing -7% of its team. Lots of cuts happening, folks, which we understand from a managerial point of view, but it doesn’t help the economy.