HK Weekly Recap & Analysis February 21st, 2023
The Week Ahead (February 20th – February 24rd)
KEY ECONOMIC DATA RELEASES TO WATCH
MARKET RECAP FROM THE PREVIOUS WEEK
February 13, 2023
Twilio "parting ways" with 17% of its workforce
Fed's Bowman: It is still feasible that we will be able to achieve a soft landing.
The one-year-ahead inflation forecast for January remains unchanged at 5% compared to December.
There will be many data between now and the following policy meeting.
The expected household income in January falls to 3.3% from 4.6% in December.
WFC Wells Fargo’s Chris Harvey says the stock bear market is over.
Microsoft-owned LinkedIn laid off staff in its recruiting department on Monday
Intraday Change for Indices:
SPY +1.17%
Dow Jones +1.13%
Nasdaq +1.60%
February 14, 2023
CPI
US CPI MoM Actual 0.5% (Forecast 0.5%, Previous -0.1%)
US Core CPI MoM Actual 0.4% (Forecast 0.4%, Previous 0.3%)
US CPI YoY Actual 6.4% (Forecast 6.2%, Previous 6.5%)
US Core CPI YoY Actual 5.6% (Forecast 5.5%, Previous 5.7%)
Fed funds futures are now pricing in top-fed funds rate of 5%-5.25% by July, vs. earlier near-even odds of a higher Fed funds rate.
US Redbook YoY Actual 4.9% (Forecast -, Previous 4.3%)
CME is to launch event contracts on Bitcoin futures on March 13.
Fed's Barkin: Return inflation to target will take some time.
A perfect case can be made for keeping rates higher for longer.
The job market has been the biggest surprise. Last month's job gains were significantly higher than expected.
Tesla employees in New York state have launched an effort to unionize. Employees at Tesla's Buffalo factory emailed CEO Elon Musk expressing their intention to organize a union to obtain better pay and job security and reduce production pressures.
The Saudi Public Investment Fund bought more than 4 million shares of Google during Q4.
Fed's Harker: We must continue above 5% in 25 bps increments.
I am still determining what the FOMC will do at the March meeting.
Fed’s Williams: It will take several years to get inflation back to 2%; the Fed still has a long way to go in controlling inflation.
Current inflation levels remain too high; underlying levels are too high. Better global growth & constrained supply chains are boosting inflation.
A year-end federal funds rate between 5.00% and 5.50% appears reasonable.
Brookfield, the parent of the largest office landlord in Downtown Los Angeles, is defaulting on two LA office tower loans.
Reddit Aims for IPO in the Second Half of the Year
Intraday Change for Indices:
SPY -0.05%
Dow Jones -0.41%
Nasdaq +0.74%
February 15, 2023
US Retail Sales MoM Actual 3% (Forecast 2%, Previous -1.1%)
US Retail Sales YoY Actual 6.38% (Forecast -, Previous 6.02%)
US Core Retail Sales MoM Actual 2.3% (Forecast 0.9%, Previous -1.1%)
US Industrial Production MoM Actual 0% (Forecast 0.5%, Previous -0.7%)
US Industrial Production YoY Actual 0.8% (Forecast -, Previous 1.65%)
US Manufacturing Output MoM Actual 1% (Forecast 0.8%, Previous -1.3%)
US NAHB Housing Market Index Actual 42 (Forecast 37, Previous 35)
US Business Inventories MoM Actual 0.3% (Forecast 0.3%, Previous 0.4%)
Tesla CEO Elon Musk looking to appoint new Twitter CEO by year-end
Tesla will make at least 7,500 superchargers available to all EV drivers by the end of 2024.
US FTX judge has ordered the names of the two backers of Sam Bankman-Fried’s $250 million bail to be made public.
One is Andreas Paepcke, a Senior Research Scientist at Stanford.
The other is Larry Kramer, the former dean of Stanford Law School.
CBO Forecasts: April income tax receipts would significantly impact the timing of potential debt servicing issues.
Real GDP growth in the United States is expected to be 0.3% in calendar 2023, 1.8% in 2024, and 2.7% in 2025.
Intraday Change for Indices:
SPY +0.32%
Dow Jones +0.15%
Nasdaq +0.77%
February 16, 2023
US PPI YoY Actual 6% (Forecast 5.4%, Previous 6.2%)
US PPI MoM Actual 0.7% (Forecast 0.4%, Previous -0.5%)
US Core PPI YoY Actual 5.4% (Forecast 4.9%, Previous 5.5%)
US Core PPI MoM Actual 0.5% (Forecast 0.3%, Previous 0.1%)
US Initial Jobless Claims Actual 194k (Forecast 200k, Previous 196k)
US Continued Jobless Claims Actual 1.696M (Forecast 1.695M, Previous 1.688M)
Fed's Mester: At the most recent FOMC meeting, there was a compelling case for a 50 basis point increase.
January's CPI data showed there's still more to do with cooling inflation.
Fed actions will slow growth and increase unemployment.
Balance-sheet runoff is something I expect will continue.
DocuSign to reduce and restructure workforce by 10%
Cisco CEO - "We are now at a point where 44% of our revenue is recurring."
Bank of America to cut jobs in investment banks.
Tesla reportedly sold out of the Model Y for Q1. The company updated its estimated timeline for Model Y to between April and June.
NY Fed: In the fourth quarter, credit card balances increased by $61 billion to $986 billion, surpassing the pre-pandemic high.
China put $LMT Lockheed Martin and a unit of $RTX Raytheon Technologies on an "unreliable entities list" over arms sales to Taiwan. This bans them from imports and exports related to China.
Fed's Bullard: I advocated for a half-point increase to reach an adequately restrictive level faster at the most recent Fed meeting.
I would not rule anything out for the next Fed meeting; recent market pricing firming is welcome.
Apple has begun laying off contractors
Intraday Change for Indices:
SPY -1.38%
Dow Jones -1.25%
Nasdaq -1.88%
February 17, 2023
US Import Prices MoM Actual -0.2% (Forecast -0.1%, Previous 0.4%)
US Export Prices MoM Actual 0.8% (Forecast -0.2%, Previous -2.6%)
Fed's Barkin: Labor demand continues to run ahead of labor supply, & businesses are reluctant to shed employees.
Shortages in labor supply will continue.
There are segments of the economy where inflation is slowing, while others, such as food and utilities, are not.
US Leading Index Change MoM Actual -0.3% (Forecast -0.3%, Previous -0.8%)
Fed's Bowman: Much uncertainty is ahead, and geopolitical tensions may impact energy prices.
We're still going, and we still need to beat inflation.
Intraday Change for Indices:
S&P 500+0.23%
Dow Jones +0.49%
Nasdaq -0.66%
THE WEEK AHEAD & EARNINGS
Monday – 02/20/2023
President’s Day, none scheduled.
AM Earnings: None scheduled.
PM Earnings: None scheduled.
Tuesday – 02/14/2023
S&P flash U.S. services PMI - 9:45 AM ET
S&P flash U.S. manufacturing PMI - 9:45 AM ET
Existing home sales - 10 AM ET
AM Earnings: Arconic (ARNC), Public Service Enterprise (PEG), Dana Incorporated (DAN), Expeditors International (EXPD), Fuor Corp (FLR), Home Depot (HD), Huntsman (HUN), Westlake Chemical (WLK), Walmart (WMT), Medtronic (MDT)
PM Earnings: Public Storage (PSA), Palo Alto Networks (PANW), Realty Income Corp (O), Keysight Tech (KEYS), SBA Communications (SBAC), Diamondback Energy (FANG), Coinbase (COIN), Chesapeake Energy (CHK), Caesars Entertainment (CZR), Toll Brothers (TOL)
Wednesday – 02/15/2023
FOMC minutes - 2 PM ET
AM Earnings: TJX Companies (TJX), Baidu (BIDU), Stellantis NV (STLA), Garmin (GRMN), Targa Resources (TRGP), Charles River Laboratories (CRL), Brink's Company (BCO), Constellium NV (CSTM), iQIYI (IQ), Wix.com (WIX)
PM Earnings: Nvidia (NVDA), Pioneer Natural Resources (PXD), eBay (EBAY), ANSYS (ANSS), Extra Space Storage (EXR), Lucid Group (LCID), Coterra Energy (CTRA), Unity (U), Etsy (ETSY), Mosaic Company (MOS)
Thursday – 02/16/2023
Initial jobless claims - 8:30 AM ET
GDP - 8:30 AM ET
Atlanta Fed President Bostic speaks - 10:50 AM ET
AM Earnings: Alibaba (BABA), American Electric Power (AEP), American Tower Corp (AMT), Bath & Body Works (BBWI), CBRE Group (CBRE), Bausch Health Companies (BHC), Domino's Pizza (DPZ), NetEase (NTES), Moderna (MRNA)
PM Earnings: Intuit (INTU), Booking Holdings (BKNG), EOG Resources (EOG), Block (SQ), Autodesk (ADSK), Warner Bros (WBD), VICI Properties (VICI), Edison International (EIX), Live Nation Entertainment (LYV), Alliant Energy (LNT)
Friday – 02/17/2023
Consumer spending (nominal) - 8:30 AM ET
Personal income (nominal) - 8:30 AM ET
PCE index - 8:30 AM ET
Core PCE index - 8:30 AM ET
Core PCE (year-over-year) - 8:30 AM ET
New home sales - 10 AM ET
Consumer sentiment (final) - 10 AM ET
AM Earnings: Canadian Imperial Bank (CM), Evergy (EVRG), Fomento Economico (FXM), HF Sinclair (DINO), Lamar Advertising (LAMR), Frontier Communications (FYBR), Chart Industries (GTLS), Balchem Corporation (BCPC), PNM Resources (PNM), Brady Corp (BRC)
