The good news is that inflation is easing. Dec producer prices declined -0.5%, “better” than consensus, meaning that inflation is declining faster. Also, retail sales in Dec declined more than expected at -1.1%. Interestingly, 10 of 13 retail categories declined. But, unfortunately inflation is ...
Read moreConsensus has margins rising at 66% of companies, with EBIT margins expected to increase by 100bps between 4Q22 and 2H23 for the S&P ex Fins/Energy. As we have warned, even though energy costs may have abated, labor and other costs are up—so it is unlikely companies will be able to push through pr...
Read moreStocks were down in the morning with Big Banks’ earnings season boofs. Yes, boof is a word…looked it up this morning. $C reported adj EPS below consensus but set FY23 rev guidance above consensus; the co’s 4Q profit declined by -21%, and they stashed some cash for credit losses. $WFC reported ...
Read moreInvestors were hoping for a greater deceleration of inflation that would pressure the Fed to slow/pause hikes. CPI was down -0.1% m/m, and up 6.5% y/y (chart below). Lower energy costs helped drive the move. Given various messaging in the past week, including Fed’s Harker and Collins, it looks lik...
Read moreInvestors are waiting for the Thurs CPI print (another lovely countdown below). So, today is a good day to get things done, before tomorrow’s macro-driven market moves. This morning, stocks are up slightly, bond yields are down, oil and nat gas are up. Long duration plays are outperforming. Accord...
Read moreUS markets pared pre-market losses as Powell refrained from pontificating on rate hikes during his talk in Stockholm. There’s always the Q&A, right?! To fill his shoes, Blackrock and Fidelity are warning that markets are underestimating inflation and peak rates. Plus, JPM’s Dimon said rates migh...
Read moreJust a refresher—last week China Reopening was a leading theme. The gov softened tech regulation banter and supported the real estate sector. China Internet was up big. Gold Miners, airlines, travel/leisure—also up big. Laggards until Friday were SaaS/software, cyber security, de-SPACs, unprofit...
Read moreThe Jobs Report is causing the market bounce this morning. What slowed? Private sector employment growth, private sector hourly earnings growth, private sector ave weekly hours, and thus a private sector labor income slowdown. On the flipside, various unemployment rates also moved down slightly, and...
Read moreStocks in the US reversed and UST yields rose after US labor market data showed continued strength this morning. Hiring topped estimates in private payrolls. New claims for unemployment benefits fell last week. Powell is feeling vindicated with his second cup of coffee. Then Bostic said the Fed has ...
Read moreUBS is out with a slew of downgrades: $MSFT because of slowing Azure growth (px target to $250 down from $300), plus industrials $EMR and $HON, and $CHRW. WF downgraded $TGT to hold from buy, given deceleration (px target $142 from $170). CS downgraded $DLR after data center checks. BofA upgraded $M...
Read moreIMF head Kristalina Georgieva projects that one-third of the world may suffer from recession, if the US, EU, and China all slow as expected. Not to be outdone by negative forecasts on investors’ first day back at work in the new year, Scion Asset founder Michael Burry projects that the US will hav...
Read moreEnergy was the standout this year of challenging markets. WTI and Brent increased by >4% and >7%, respectively, for YTD22 after jumping >50% in 2021. Farm commod also were strong, notching a fourth annual increase—the longest stretch since the early 90’s. Tech obviously got pummeled, with the NA...
Read moreThat’s what inflation swaps are pricing in, hoping for rate cuts in late 2023. Investors believe inflation will moderate, with headline CPI growing at around 2.5% y/y at 2023-end. This would enable the Fed, in their eyes, to at least pause and maybe cut if the economy and labor weaken....
Read moreEquity markets are down roughly -20% this year globally, and BBG is reporting that an index of global bonds is down around -16%. The USD is up 7% (a lot), and the UST 10-yr moved from 1.5% to above 3.8%. Markets appear to be up this morning based on investor optimism for China’s reopening. But vol...
Read more$NET published its Cloudflare Radar 2022 Year in Review. After a dip mid-year, worldwide Internet traffic has grown from Aug through Dec 2022. They note the recent increase due to early holiday e-commerce shopping and the World Cup....
Read moreEurope’s Stoxx 600 is up so far (+0.17%), hoping to close out a first up week in three. As of writing, the MSCI World hadn’t moved much, Asia Pac was down around -1%, and EM was down around -1%. Investors are digesting the PCE deflator, an inflation data point tracked by the Fed, which, expected...
Read moreFood and drink prices in the UK are rising at the fastest pace since 1989, according to the Telegraph. To ease some pain, the gov stepped in to cap a rail price hike, making it the biggest gov intervention in rail fares in history, capping the rise below inflation to mitigate passenger impact....
Read morePrez Zelensky is headed to DC to chat with Congress about getting that $2bn in aid plus Patriot missiles to fight Russia this winter. You can imagine Putin is having a bad day today as he watches the besties help each other out....
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