There’s a camp that is forecasting earnings growth to become positive in 3Q23, after 3 quarters of declines, per Bloomberg. Folks are saying that the worst is over, because inflation is coming down. BI data reflects that while per-share earnings are down -7% so far, growth should rebound. That has led various big banks to squash recession calls, on the heels of companies increasing cap ex and consumers still spending.
There’s another camp that says that positive forecasts are wrong. JPM is warning to brace yourself, because corporate earnings will worsen as economic activity deteriorates. The risk-reward for equities is “unappealing,” and point to FOMO in today’s market. Morgan Stanley is also in that camp (is Michael Wilson flopping back to negative?), noting growth will be tough. He says the fiscal tightening is a risk for stocks, as it will pressure earnings, per Bloomberg. Interestingly a majority of investors surveyed by Bloomberg MLIV expect a US recession to occur before the end of 2024.
Apple is looking for dozens of people in generative to advance iPhones and iPads, per the FT. CNN Business is forecasting that a lack of chips will weigh on AI growth. Reuters explained that tech advances (like AI) have had mixed economic records.
Lucid cut their EV prices because the market has gotten more competitive, per Reuters.
The FT says that US regional banks are still depending on the gov life support, tapping hundreds of billions to keep afloat.
Zoom told employees to get back in the office, reversing the WFH trend during the pandemic, per Fox Business.
GS says that Chinese copper inventories are nearing critical levels. They note that supply constraints could buffer lower demand and still increase prices because the bulk of global stockpiles are held by China. They also warned on iron ore because China may cut steel output in 2H23.
Meta’s Threads will integrate search and web functions in the next few weeks, per CNBC. Perhaps more importantly, a Musk-Zuck cage fight would be live-streamed on X. You have to admit that you would AT LEAST watch the highlight clips.
Bloomberg points to research flagging that ECB rate hikes could trim 4% from the EZ’s economic output. German industrial production fell more than expected, below pre-pandemic levels, per Reuters.
China economists were told by the gov not to discuss negative trends like deflation and capital flight, per the FT. Why? Their economy has been stagnant. Reuters notes that China’s exports probably were down in July, and imports were probably down -5% as well. To fight their debt problem, China is looking to special bonds, debt swaps and central budget dipping, per Reuters. So, who wins? Per Bloomberg, investors are leaving China for Japan.
China economists were told by the gov not to discuss negative trends like deflation and capital flight, per the FT. Why? Their economy has been stagnant. Reuters notes that China’s exports probably were down in July, and imports were probably down -5% as well. To fight their debt problem, China is looking to special bonds, debt swaps and central budget dipping, per Reuters. So, who wins? Per Bloomberg, investors are leaving China for Japan.
