Global bonds rallied on the back of soft inflation data as traders increased positioning for rate cuts, estimating up to 145bps of cuts by the BOE, with GS bringing the timing up a month to May from June. UK CPI slowed more than expected to 3.9% in Nov. US mortgage rates fell for a 5th week to their lowest level since Jun. Chinese commercial banks held their benchmark lending rates flat, which increased bets that they’ll see easing in 2024 too, per Reuters.
Want to know how much more it costs for shipping insurance for transit through the Red Sea? 2.5x the amount prior to the attacks, from 0.2% to 0.5% of a vessel’s hull value. What to know how much more stuff is going to cost? Well, you won’t have to wait too long to find out. Over 100 container ships are not rerouted. News is out today that your Ikea furniture is facing delays and shortages.
ByteDance’s revenues increased by +30% to over $110bn in 2023. The owner of TikTok, Temu, Shein and CapCut is coming for you…Tencent….Amazon…Facebook…everyone. Also out in the news, Chinese consumers cut back non-essential spending, per Bloomberg, with retail competition intensifying, per Reuters. Well, someone’s making ByteDance successful…so not sure about how these fit together.
Lots of auto news. EZ car sales rose +6% in Nov, although it dropped that much in Germany, which is hurting economically. A Lending Tree study reported that Tesla drivers had the highest accident rate (and Ram drivers the 2nd highest, and Subaru the 3rd—which I found surprising), with BMW drivers having the highest DUI rate. “…there are indications that certain types of vehicles attract riskier drivers than others,” noted the study. Fewest accidents with drivers of Pontiac, Mercury and Saturn vehicles. In other Tesla news, the co knew about defects with suspensions and steering parts but blamed issues on drivers. Cue the regulators and the lawyers.
FedEx missed on Express profitability issues and cut its revenue guidance, per Reuters. The stock was down hard (-10% roughly). USPS shifted packages from air transport (which is higher margin for the co) to ground transport. Mgmt blamed the macro and soft customer demand, but it’s the switch that I’d focus on. Also, they’re buying back stock ($1bn expected in 2024)….but mgmt. shouldn’t do that unless they have a plan to fix Express profits, right?
CH Robinson expects the current freight recession to continue, but mgmt. forecasts a rebound in 2H24, per Bloomberg. Call me skeptical, but isn’t that what you say when you don’t want to forced to perform near-term but need to convey enough hope about the future?
Japan’s equity markets rose, probably on the back of US markets, with the Nikkei up 1.37% and Topix up 0.67%. But they printed a stinker. Japan exports shrank for the 1st time in 3 mo, with import contraction larger-than-forecasted, per Reuters.