HK Weekly Recap & Analysis December 5th, 2022
The Week Ahead (December 5th – December 9th)
KEY ECONOMIC DATA RELEASES TO WATCH
MARKET RECAP FROM THE PREVIOUS WEEK
Monday, November 28th
Stocks fell as protests spread in China calling for President Xi Jinping to step down amid growing anger over severe restrictions imposed as part of his “zero COVID” strategy.
Elon Musk said Apple threatened to remove Twitter from its App Store and criticized the tech giant for censorship. He also said they had withdrawn most of its advertising spending from Twitter.
The market will get another critical piece of data on the economy later this week when the Labor Department issues its monthly jobs report.
Preliminary estimates for cyber-Monday sales hit a record of 11.6 billion, with WMT, AMZN, and TGT among the retailers in the forecast. (Actually, you can probably get the exact numbers by the time the recap is to be sent out).
Today, the S&P 500 fell less than 1% to end at 4,026.12, Nasdaq Composite finished at 11,226.36, declining 0.5%, and Dow Jones Industrial Average (DJI) was up 5% or 152.97 points to close at 34,347.03.
Tuesday, November 29th
Elon Musk said Apple threatened to remove Twitter from its App Store and criticized the tech giant for censorship. He also said they had withdrawn most of its advertising spending from Twitter.
Stocks fell as protests spread in China calling for President Xi Jinping to step down amid growing anger over severe restrictions imposed as part of his “zero COVID” strategy.
According to Adobe Analytics data, consumers spent $11.3 billion on Cyber Monday this year, a 5.8% increase from last year, making it the biggest shopping day ever. For the five days from Thanksgiving through Cyber Monday, e-retail sales grew 4.4% to $35.27 billion. Here are some of the categories:
Toys (online sales on Cyber Monday were 684% higher than on an average day in October)
Sporting goods (up 466%)
Appliances (458%)
Books (439%)
Jewelry (410%)
Electronics (391%)
Computers (372%)
Apple shares fell lower today amid continued concerns over a disruption in iPhone production due to Foxconn uncertainty in China. China protests could also reduce iPhone shipments by 20%.
Consumer confidence continued to fall in November, almost in line with expectations, as persistently high gasoline prices and ongoing inflation concerns haunted consumers into the holiday season.
It was a low volume day as we ended the day as the S&P and Nasdaq ended lower for three days straight. Today, the Nasdaq Composite fell 0.6% to 10,983.80, while the S&P 500 lost 0.2% to 3,957.63. The Dow Jones Industrial Average was almost unchanged at 33,852.53.
Wednesday, November 30th
Youtube was momentarily down.
Jerome Powell spoke, and the markets ripped higher
Elon Musk tweets that Fed should cut rates
Doordash lays off 1250 employees
The time to slow the rate hikes could come as soon as the December meeting
Economic Data Today:
U.S. 3Q prelim GDP +2.9% vs. consensus +2.7% and previous +2.6%; but inflation readings a bit higher than expected with GDP Price deflator for Q3-P +4.3% vs. est. +4.1% and core PCE Prices prelim +4.6% vs. est. +4.5%; consumer spending +1.7% from 1.4% prior; Q3 business investment +5.1% (vs. prior +3.7%); equipment +10.7% (vs. prior +10.8%)
Chicago PMI showed a considerable drop, falling to 37.2 from 45.2 the prior month and well below the economist estimate of 47.0; prices paid rose at a slower pace, signaling expansion, while new orders fell faster, signaling contraction.
November ADP Jobs Report: +127K vs. 200K consensus and +239K in October; Goods-producing jobs up 86,000, service-providing jobs up 213,000
October goods trade deficit moved higher to $99 billion vs. $90.6 billion est. & $91.9 billion in the prior month (rev from $92.2 billion)
Pending home sales dropped for the fifth straight month in October as October Pending Home Sales fell -4.6% M/M to 77.1 vs. -5.0% consensus and -8.7% in September (revised from -10.2%)
US Job Openings (JOLTs) fell to 10.33mln in Oct. from 10.69mln
The US mortgage market index fell 0.8% in the latest week, says the MBA, as the mortgage purchase index rose 3.8%, refinancing index fell 12.9% despite the average 30-year mortgage rate falling 18 bps to 6.49%
Powell drove an incredible move. Futures tied to the Fed policy rate imply a 75% chance of a 50-bps rate hike in December, which is bullish for the market.
Today: Nasdaq unofficially closes 466.38 points, or 4.25%, at 11,450.16, S&P 500 unofficially closes 119.16 points, or 3.01%, at 4,076.79, and Dow Jones unofficially closes 656.60 points, or 1.94%, at 34,509.13.
Thursday, December 1st
Biden had a detailed discussion on the US inflation reduction act with France’s President Macron.
Chevron CEO: More liquefied natural gas from eastern Mediterranean holdings could be delivered to Europe in the decade's second half.
Wells Fargo cuts hundreds more mortgage employees due to slowdown. The Fed raising the interest rates is a major cause for these layoffs.
US ISM Manufacturing PMI Actual 49.0 (Forecast 49.7, Previous 50.2)
US S&P Manufacturing PMI Final Actual 47.7 (Forecast 47.6, Previous 47.6)
Fed's Bowman: However, we must slow the rate of increase, which will allow us to assess the impact of our actions more fully.
Financial stocks fell. Investors cited concerns that banks might set aside more funds to cover potential credit losses, a move that cuts into their profits.
The S&P 500 was off 0.1% on Thursday, falling 3.54 points to 4076.57. The Dow Jones Industrial Average fell 0.6%, or 194.76 points, to 34395.01. The tech-heavy Nasdaq Composite Index gained 0.1%, or 14.45 points, to 11482.45.
Friday, December 2nd
US Unemployment Rate Actual 3.7% (Forecast 3.7%, Previous 3.7%)
US Average Earnings YoY Actual 5.1% (Forecast 4.6%, Previous 4.7%, Revision 4.9%)
Canadian Employment Change Actual 10.1k (Forecast 10k, Previous 108.3k)
Market indexes were lower following bigger-than-expected nonfarm payroll data. A rise in the US Treasury yields has also weighed on the market
Today, The Dow Jones Industrial Average went up 35 points (0.1%) to 34,430, while the S&P 500 Index declined 5 points (0.1%) to 4,072, and the Nasdaq Composite decreased 21 points (0.2%) to 11,462.
THE WEEK AHEAD & EARNINGS
Monday – 12/05/2022
S&P U.S. services PMI (final) - 9:45 AM ET
ISM services index - 10 AM ET
Factory orders - 10 AM ET
AM Earnings: Science Applications International (SAIC), Veru Inc (VERU)
PM Earnings: None
Tuesday – 12/06/2022
Trade deficit - 8:30 AM ET
AM Earnings: AutoZone (AZO), Signet Jewelers Limited (SIG), Couchbase (BASE), J Jill Inc (JILL), Conn's (CONN), Alico (ALCO)
PM Earnings: MongoDB (MDB), Caseys General Stores (CASY), Toll Brothers (TOL), HealthEquity (HQY), Smith & Wesson (SWBI), SentinelOne (S), AeroVironment (AVAV), Sprinklr (CXM), Dave & Buster's (PLAY), Zuora (ZUO)
Wednesday – 12/07/2022
Productivity (SAAR) revision - 8:30 AM ET
Unit labor costs (SAAR) revision - 8:30 AM ET
Consumer credit (level change) - 3 PM ET
AM Earnings: Academy Sports & Outdoors (ASO), Campbell Soup (CPB), Thor Industries (THO), United Natural Foods (UNFI), Vera Bradley (VRA), John Wiley & Sons (WLYB), The Lovesac Company (LOVE)
PM Earnings: Gamestop Corp (GME), The Descartes Systems Group (DSGX), HashiCorp (HCP), Greif (GEF), Verint Systems (VRNT), C3.ai (AI )
Thursday – 12/08/2022
Initial jobless claims - 8:30 AM ET
Continuing jobless claims - 8:30 AM ET
AM Earnings: Ciena Corp (CIEN), GMS Inc (GMS), Hello Group Inc (MOMO), Liquidity Services (LQDT)
PM Earnings: Costco (COST), Broadcom (AVGO), Lululemon (LULU), Chewy (CHWY), The Cooper Companies (COO), Vail Resorts (MTN), DocuSign (DOCU), Phreesia (PHR), Domo (DOMO), Torrid Holdings (CURV)
Friday – 12/09/2022
Producer price index final demand - 8:30 AM ET
UMich consumer sentiment index (early) - 10 AM ET
UMich 5-year inflation expectations (early) - 10 AM ET
Wholesale inventories revision - 10 AM ET
AM Earnings: Li Auto Inc (LI)
