All about AMZN, AAPL, and META. Will GOOG be an omen, or will they beat to their own holiday sales, lowered expectations, and AI drums, respectively?
All about Powell and his cold water on folks hoping for a March pivot. Also, he said don’t expect cuts until inflation is moving more sustainably toward the rough 2% or so target, per the FT.
The market is up pre-market today because US weekly jobless claims rose 9k to 224k, which was above estimates. So, now the market is hoping you lose your job in order to make Powell cut rates. On Friday, we get the jobs report, so we’ll see if this softening trend continues. DB announced 3.5k layoffs. TS Lombard put out an interesting chart. Real wage growth is accelerating due to lower inflation, so that’ll put more money in people’s pockets, which will make it harder for Powell to cut soon.
Ave stock return for 7 of 11 sectors declined. Even though overall tech was up 3.9%, the ave tech stock was only up a tad 0.4%. Returns are uneven, folks.
Some banks just can’t get a break. First, it’s tighter regulation and fleeing deposits. Now it’s WFH, higher rates, upcoming maturities and the commercial real estate market. Per our note yesterday, NYCB fell -38% yesterday, sending the KBW Regional Banking Index on its worst day since the collapse of SVB. In Tokyo, Aozora Bank fell >-20% after warning about losses tied to commercial real estate. DB did a 4x on its US real estate loss provisions to ~$133mm in 4Q23. Barry Sternlicht came out saying that the office market is headed for >$1trn in losses, which if it occurs, you would expect to see folks walking away from their properties versus refinancing.
Nvidia’s new China-focused AI chip will be priced at a similar level to that of Huawei, per Reuters. The co has to thread a lot of needles (regulatory, geopolitical, commercial, technological).
The scuttlebutt, per a BBG article, is that a bunch of UK wind farms are enriching themselves unfairly. Because they overestimate how much power they’ll produce, on days with a lot of wind, instead of overloading the system, the grid operator pays them not to generate—at an inflated rate for power they wouldn’t have generated anyway. Consumers pick up the tab.
EZ inflation eased less than anticipated last mo, so it’ll be hard to bet on early cuts over there too, per Reuters.
Gotta show some love for a bully like Musk. Deliver a ruling on my pay package I don’t like? Well, I’m going to get a shareholder vote to move my incorporation from Delaware to Texas. But, boy, what a ruthless review of the Tesla board members, including someone I know well. They’ll definitely not be in the running for any board independence awards this year. But they can peek at their bank accounts and then move along and forget about the awards.
No new licensing deal? Well, UMG just pulled Swift and Drake songs from TikTok. With only 1% of its rev coming from TikTok, UMG is in the driver’s seat here and looks good to its artists.