TradeTheNews.com Weekly Market Update: Mixed jobs report and SVB collapse trouble investors, dampens Fed expectations
3/10/2023 4:17:14 PM
It was a tumultuous week for investors to say the least. Markets encountered two distinct catalysts and neither supported equity valuations, but did induce significant volatility into fixed income markets. Initially all eyes were on Capitol Hill where Fed Chairman Powell testified on Tuesday and Wednesday. His remarks were clearly received as more hawkish than many investors may have hoped for. The door was kicked wide open for a 50 bps hike later this month after he implied the pace of tightening could re-accelerate depending on the upcoming data. Powell also acknowledged the March dots will be revised higher after January data and December revisions partly reversed softening trends, but how much higher remains unclear. The US 2-year yield surged above 5% and the 2-10 year spread inversion plunged well below -100 basis points before ADP employment and JOLTS jobs reports came in stronger than expected, supporting the Chairman’s message.
Separately ominous signs emerged that the Fed’s aggressive tightening campaign is starting reveal cracks in portions of the economy. Multiple US regional banks highlighted the difficulties that the rising cost of deposits are causing, and that this credit normalization is likely to hamper bank profitability going forward. Banking stocks came under significant pressure in the wake of those investor comments and the deepening inversion across the US Treasury yield curve. But, it was the implosion of Silicon Valley Bank that resulted in full blown panic reminiscent of the lead up to the 2008 Financial Crisis. SVB shares plunged more than 60% on Thursday after management said it would need to raise nearly $2.3B to cover unforeseen asset impairments mostly related to long term US Treasury holdings. Shares continued to plunge on Friday along with a host of other regional banks amid reports of an ongoing run on SVB by its depositors. The FDIC was forced to assume control of SVB, effectively shutting the institution down in what amounted to the largest bank failure since the 2008 financial crisis and the second-biggest failure in US history behind Washington Mutual. Many expected some sort of forced resolution this weekend in the form of a sale or bailout. Nevertheless a debate raged on several fronts on just how bad the fallout will be from the unforeseen demise of this key cog in the US venture capital ecosystem.
Friday’s jobs report largely offered a green light to those traders looking to park money in the relative safety of government backed debt. February payroll data stayed hot, but that was largely expected. It was the below-trend gain in average hourly earnings and another decline in the workweek that suggested take home compensation and wage trends in general may be softening more than anticipated. The volatility in US Treasury markets and in the 2-year yield in particular has been ferocious. That yield, which was approaching 5.10% mid-week, had careened to 4.6% which was the fastest 2-day decline since 2008. Expectations for a 50 bps hike later this month receded, as futures now favor 25 bps once again. The US dollar lost ground, trading down more than 1% broadly, while gold price jumped nearly 2%. The S&P dropped back below 3,900 and appears to be testing below the uptrend channel coming off the Oct 22nd low. For the week, the S&P sold off 4.6%, the DJIA lost 4.5%, and the Nasdaq was down 4.7%.
Outside of the regional banking sector upset, corporate news continued to focus on earnings reports and investor day presentations. Shares of Dicks Sporting Goods hit an all time high after its strong earnings report, proving business is still good in the post-pandemic period. GE shares moved out to 5-year highs after management told investors guidance is on track and that they are seeing significant free cash flow growth. Oracle earnings beat expectations and provided solid guidance, but shares were still caught in the riptide of Friday’s sell off. On the M&A front, Black Knight suffered a setback as the FTC officially decided to challenge the acquisition by ICE on the grounds it would limit competition in the mortgage loan technology business. Spirit Airlines faces a similar battle as the DOJ confirmed it would seek to block its proposed merger with Jetblue.
MON 3/6
(PT) ECB's Centeno (Portugal): ECB targets headline inflation, NOT core inflation; Asked about possible 50bps hike in Mar, says decision must be based on data; Notes interest rates have risen too fast
(EU) ECB chief Lagarde: Reiterates very likely to raise rates by 50bps in Mar
(AT) ECB's Holzmann (Austria): Calls for four more 50bps interest rate hikes by July 2023 [**Note: implies 4.50% terminal rate v 4.00% currently expected by markets]
CIEN Reports Q1 $0.64 v $0.36e, Rev $1.06B v $959Me
VST To acquire Energy Harbor Corp in deal valued at $3.0B plus 15% interest in Vistra Vision; Increases share buyback by $1B (12.2% of market cap)
(US) JAN FACTORY ORDERS: -1.6% V -1.8%E
SAVE Reportedly Spirit-Jetblue merger facing DoJ anti-trust suit as soon as Tuesday, DoJ said to see deal as anticompetitive - press
KEY Cuts FY23 NII outlook to +1-4% from 6-9% prior (assumes cumulative beta in the mid to high 30's v mid-to-high 20% guid) - investor presentation
(CN) China's new Foreign Min Qin Gang : US's China policy entirely deviated from the rational and sound track; US means to contain and suppress China in all respects and get the two countries locked in a zero-sum game - first speech since taking office
TUES 3/7
(UK) FEB HALIFAX HOUSE PRICE INDEX M/M: 1.1% V 0.0% PRIOR; Y/Y: 2.1% V 1.9% PRIOR (fastest M/M increase since June 2022)
(TW) Taiwan Feb Trade Balance: $2.4B v $3.9Be
(CN) CHINA FEB FOREIGN RESERVES: $3.133T V $3.157TE (1st decline in 5 month
DKS Reports Q4 $2.93 v $2.86e, Rev $3.60B v $3.41Be; Guides FY23 strong; Raises Quarterly dividend 105.1% to $1.00 from $0.4875 (indicated yield 3.03%)
Feb Manheim Used Vehicle Value Index: +4.3% M/M; -7.0% Y/Y (inline with mid-Feb update)
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: -0.7% v -1.5% prior
(US) FED CHAIR POWELL: WE WILL STAY THE COURSE UNTIL THE JOB IS DONE; ULTIMATE PEAK LIKELY TO BE HIGHER THAN EXPECTED; PREPARED TO INCREASE PACE OF RATE HIKES IF NEEDED; LATEST ECONOMIC DATA HAS BEEN STRONGER THAN EXPECTED
(US) 2-year Treasury yield touches 5% for first time since 2007
(US) JAN CONSUMER CREDIT: $14.8B V $25.3BE
UPS Affirms FY23 Rev $97.0-99.4B v $97.9Be, adj Op margin 12.8-13.6%, Capex $5.3B, FCF $8B in base case - conf slid
WED 3/8
ADS.DE Reports final Q4 FY22 Net -€482M v +€123M y/y, Op -€724M v -€717Me, Rev €5.21B v €5.29Be; Cuts annual dividend 79% to €0.70/shr from €3.30/shr
(DE) GERMANY JAN RETAIL SALES M/M: -0.3% V 2.3%E; Y/Y: -4.6% V -5.0%E
(UK) BOE’s Dhingra (dove; dissenter): Further tightening is a bigger risk to output; Prudent strategy would be to hold policy steady
(US) FEB ADP EMPLOYMENT CHANGE: +242K V +200KE; Pay growth "still quite elevated"
(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATE UNCHANGED AT 4.50%; AS EXPECTED [**Note: becomes 1st G7 Central Bank to pause in current tightening cycle]
(US) JAN JOLTS JOB OPENINGS: 10.824M V 10.55ME
(US) DOE CRUDE: -1.7M V +0.5ME; GASOLINE: -1.1M V -2ME; DISTILLATE: +0.1M V -1ME
(US) Atlanta Fed GDPNow: raises Q1 GDP from 2.0% to 2.6%
(US) USDA WORLD AGRICULTURAL SUPPLY AND DEMAND ESTIMATES (WASDE) CROP REPORT: End 2022/2023 US Stocks (M bu): Soybeans: 210 v 219e; Corn: 1,342 v 1,299e; Wheat: 568 v 576e
(US) FERC: Allows Freeport LNG production up to the max capacity authorized
(US) President Biden budget proposes to tax incomes >$400K at 39.6%; Proposes to impose a 25% minimum tax on billionaires - US financial press
(CN) CHINA FEB CPI M/M: -0.5% V +0.8% PRIOR; Y/Y: 1.0% V 1.9%E [slowest annualized pace since Feb 2022]
- PPI Y/Y: -1.4% v -1.3%e
THRS 3/9
ANNOUNCES TECHNICAL DELAY OF PUBLICATION OF 2022 ANNUAL REPORT; Notes last-minute SEC call to comment on certain revisions to its consolidated cash flow statements from 2019-2020
WAF.DE Reports FY22 Net €434.4M v €289.6M y/y, Rev €1.81B v €1.41B y/y; Notes start into 2023 was rather muted
(US) Sen. Lindsey Graham (R-SC): To introduce a bill laying the groundwork for Pres Biden to use US military force against Mexican drug cartels; I would get tough on Mexico - Fox News interview
GE Affirms FY23 $1.60-2.00 v $1.95e, Rev 'high single digits'; Notes significant FCF growth continues into 2023 - investor day slides
GE CEO Culp: See's FY23 "high-growth", Feel very good about our affirmation of our financial projections today – CNBC
BKI FTC officially votes to challenge the ICE/BKI deal
(US) INITIAL JOBLESS CLAIMS: 211K V 195KE (highest since late Dec 2022); CONTINUING CLAIMS: 1.72M V 1.66ME (highest in 13 months)
SBNY Issues Updated Financial Figures as of March 8, 2023; Reiterates Strong Financial Position and Limited Digital-Asset Related Deposit Balances in Wake of Industry Developments
(US) BIDEN ADMINISTRATION PROPOSED BUDGET: PROJECTS $1.846T DEFICIT IN FISCAL 2024, $17.054T DEFICIT OVER 2024-2033; Annual deficits over $1T each year through 2033, projects annual deficits 4-6-6.8% of GDP through 2033
(US) Q4 FINANCIAL ACCOUNT HOUSEHOLD CHANGE IN NET WORTH: +$2.927T V -$392B PRIOR
(US) TREASURY $18B 30-YEAR BOND REOPENING DRAWS 3.877% V 3.585% PRIOR; BID TO COVER 2.35 V 2.45 PRIOR AND 2.38 OVER LAST 8 REOPENINGS
ORCL Reports Q3 $1.22 v $1.20e, Rev $12.4B v $12.4Be; Raises Quarterly dividend 25% to $0.40 from $0.32 (indicated yield 1.81%)
(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED
FRI 3/10
TSM Reports Feb Rev (NT$) 163.2B, +11% y/y and -18.4% m/m; YTD Rev 363.2B +13.8% y/y
(UK) JAN MONTHLY GDP M/M: 0.3% V 0.1%E
DTG.DE CFO: No signs of weakening demand; Expects further partial supply chain difficulties in 2023, but no production disruptions expected - post earnings comments
(IT) Italy Jan PPI M/M: -9.9% v +3.8% prior; Y/Y: 11.6% v 39.2% prior (slowest annual pace since Aug 2021)
(RU) Russia Foreign Min Lavrov: Talks with US Sec of State Blinken on G20 sidelines were constructive; Discussed Ukraine and nuclear arms issues
*FDIC: Moving to protect insured depositors of Silicon Valley Bank; Bank closed by California regulator; SVB is the first insured institution to fail this year
TradeTheNews.com Weekly Market Update: More stubborn inflation data and Russia bear swat markets
2/24/2023 4:15:17 PM
US investors returned to a holiday shortened trading week with geopolitics back in focus. President’s Biden’s surprise trip to Kyiv ushered in a string of headlines from both sides in the lead up to the one-year anniversary of Russia’s invasion of Ukraine. Ultimately, new rounds of sanctions, tariffs, and aid were introduced by the West, even as high-level Chinese officials visited Moscow, sparking speculation about Beijing’s designs on acting as either a peace broker or arms broker in the conflict.
Stock markets continued to encounter resistance in the form of rising interest rates. The economic data and central bankers’ signaling remained supportive of the higher-for-longer narrative that has gained traction as investors have had to adjust to the stronger than expected January data. That theme culminated on Friday when the S&P fell to roughly a 1-month low after hotter than expected January PCE data spooked the market. The month over month core PCE reading of 0.6% was the largest monthly rise since August. Moreover, it got a boost from the category that Chair Powell has highlighted recently: core non-housing service prices. That sub-index also rose by nearly 0.6%, which was its largest gain since November 2021, illustrating this very large component of core inflation is not yet showing any real signs of deceleration. After that data, the US 2-year yield climbed above 4.8% and futures markets began to price in the terminal fed funds rate to exceed 5.4% later this year. The Dollar firmed up to the best levels in roughly two months while commodities and risk assets in general weakened into the end of the week. For the week, the S&P lost 2.7%, the DJIA was off 3%, and the Nasdaq fell 3.3%.
Growth and inflation tensions played out in corporate news this week. Discount retailer Dollar General, which usually flourishes during recession, announced it is cutting quarterly guidance, citing bad winter weather. Walmart beat analyst expectations handily, noting that the big box retailer is managing to contain capex costs and attracting more higher-end customers looking for bargains. Home Depot’s numbers were shakier, reporting a 6% decline in customer transactions and guiding a decline in earnings for the year, perhaps signaling more weakness in the housing market. Contrary to that, homebuilder Toll Brothers reported strong quarterly results and affirmed guidance, noting that it is seeing an uptick in demand continuing as recently as last weekend. In the tech world, Cybersecurity firm Palo Alto reported strong quarterly results and gave solid guidance, sending share higher. Intel continued to flounder, cutting its dividend by two thirds, though affirming its guidance. Adobe shares fell to their lowest levels of 2023 after reports emerged that the DOJ is preparing a suit to block its $20B acquisition of Figma.
MON 2/20
(TW) Taiwan Jan Export Orders Y/Y: -19.3% v -24.0%e; Sees Feb orders down between -10.8% and -6.9% y/y
(HK) Macau Jan tourist arrivals at 1.4M, +101.3% y/y
(US) US Pres Biden: Ukraine will get new military aid package worth $500M to be announced on Feb 21st; Will include HIMARS ammunition - statement from Kyiv
(NL) Dutch intelligence agency official: Russia tried to gain intelligence to sabotage critical infrastructure in the Dutch part of the North Sea; Russia may target Netherlands' offshore infrastructure - press
(TR) Magnitude 6.4 earthquake strikes Turkey-Syria border region
TUES 2/21
(FR) FRANCE FEB PRELIMINARY MANUFACTURING PMI: 47.9 V 51.0E (moves back into contraction); Composite PMI highest since July 2022
TSM Reportedly considers to delay its Europe fab by two years to 2025 amid automotive chip shortage is no longer as severe as it was – press
(JP) Japan Cabinet Office (Govt) Feb Monthly Report: Maintains overall economic assessment
(RU) Russia Pres Putin: We are in difficult times, prior to historical events; We will decide tasks of special military operation step by step; Vows to continue military operation in Ukraine - Federal Council address
(UK) FEB PRELIMINARY MANUFACTURING PMI: 49.2 V 47.5E (7th straight contraction); Composite PMI highest since June 2022
(DE) GERMANY FEB ZEW CURRENT SITUATION SURVEY: -45.1 V -50.5E; EXPECTATIONS SURVEY: 28.1 V 23.0E
(RU) Russia Pres Putin: Russia suspends participation in START nuclear arms treaty [**Note: inspections had been halted since 2020]; We suspend participation, not withdrawing from this; Will not allow NATO to inspect our nuclear objects - Federal Council address
HUN Reports Q4 $0.04 v $0.11e, Rev $1.65B v $1.56Be; Optimistic that destocking will end in H1 2023; Notes seeing some green shoots in areas like China, automotive, and aerospace, but construction demand globally is still under pressure
GIS Raises FY23 outlook; Continues to expect to deliver top-tier shareholder returns
HD Reports Q4 $3.30 v $3.27e, Rev $35.8B v $35.9Be; Raises Quarterly dividend 10% to $2.09 from $1.90 (indicated yield 2.63%); Announces $1B investment in associates
WMT Reports Q4 $1.71 v $1.52e, Rev $164.1B v $159.7Be; Guides FY24 EPS short of consensus; Raises Quarterly dividend 1.8% to $0.57 from $0.56 (indicated yield 1.56%)
(US) Feb Philadelphia Fed Non-Manufacturing Regional Index: +3.2 v -6.5 prior
(US) FEB PRELIMINARY S&P/MARKIT MANUFACTURING PMI: 47.8 V 47.4E (5th month of contraction); Services moves into expansion territory
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: -1.5% v +3.2% prior
(RU) Reportedly China's Xi to travel to Moscow in the spring; Xi expected to push Putin for peace talks with Ukraine – press
(EU) ECB chief Lagarde: Seeing no EU country in recession in 2023
(US) FERC grants Freeport LNG request to commission including cooldown of liquefaction Train 2 – filing
PANW Reports Q2 $1.05 v $0.78e, Rev $1.66B v $1.65Be
WED 2/22
RIO.AU Reports FY22 underlying Net $13.3B v14.0Be, underlying EBITDA $26.3B v $37.7B y/y, Rev $55.6B v $63.5B y/y
BN.FR Reports FY22 Net €959M v €1.92B y/y, Recurring Op €3.38B v €3.35Be, Rev €27.7B v €27.4Be
(JP) Semiconductor Equipment Association of Japan (SEAJ) Jan Chip-making Equipment Y/Y: -2.1% v +1.1% prior
STLA Reports FY22 adj Op €23.3B v €21.5Be, Rev €179.6B v €176.1Be; Plans up to €1.5B share buyback through 2023; Notes slow but steady improvement in chip supplies
(CN) China said to urge the State-run companies to drop the big four international auditors and use local ones citing data risk – press
7267.JP Said to raise wages by 5% (biggest increase in 30 years) - press
BIDU Reports Q4 (CNY) 16.87 v 13.90e, Rev 33.1B v 32.1Be; Announces $5B share buyback (10% of market cap) through Dec 2025; Plans to integrate Ernie bot into a number of Baidu's businesses
(US) Fed’s Bullard (Non-Voter): I think markets have overpriced a recession in 2023; US economy is stronger than what we previously thought which adds up to markets needing to price in tougher road for inflation and rates – CNBC
INTC Cuts Quarterly dividend 65.8% to $0.125 from $0.365 (indicated yield 1.92%); Affirms Q1 -$0.15 v -$0.15e, Adj Rev $10.5-11.5B v $11.1Be
(RU) Russia Foreign Ministry: We appreciate China's balanced position on Ukraine issue; "Vision" very much the same between us
TOL Exec: Uptick in demand continued through last weekend - post earnings comments
(RU) Russia said to cut crude exports from western ports by 25% in March versus Feb – pres
(US) FEB FOMC FEB MINUTES: ALL PARTICIPANTS AGREED MORE RATE HIKES NEEDED TO ACHIEVE JOB AND INFLATION OBJECTIVES; A FEW CALLED FOR A 50 BPS HIKE
(US) US said to consider releasing intelligence related to China potentially transferring arms to Russia - US financial press
(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 3.50%; AS EXPECTED
THRS 2/23
ENI.IT Reports Q4 adj Net €2.5B v €2.1B y/y, adj Op €3.59B v €3.81B y/y, Rev €31.3B v €26.8B y/y
(RU) Reportedly Russia Pres Putin has already gamed out the possibility of using a nuclear weapon in Ukraine; Putin’s calculation implies that Russia is more committed to the Ukraine war than the West - FT
(EU) NATO Sec Gen Stoltenberg: See signs China is considering giving arms to Russia; Closely monitoring Russia on their nuclear weapons
TSM Reportedly TSMC's 5nm demand has suddenly increased recently as urgent orders came from NVIDIA, AMD and Apple, mainly for AI and server chips - DigiTimes
(EU) EURO ZONE JAN FINAL CPI Y/Y: 8.6% V 8.6%E; CPI CORE Y/Y: 5.3% V 5.2%E (record high)
(CN) Reportedly Citic Group Chairman Zhu Hexin is is the leading candidate for PBOC Gov post; China said to be preparing to shake up leadership of its financial system - US financial press
BABA Reports Q3 $2.79 v $2.29e, Rev $35.9B v $35.5Be; Expects continued recovery in consumer sentiment, economic activity
BRE Reports Q4 $1.33 v $1.19e, Rev $8.19B v $8.13Be
DG Cuts Q4 $2.91-2.96 (prior $3.15-3.30) citing lower-than-anticipated sales and higher-than-anticipated inventory damages; Notes Nov and Jan SSS were as expected, Dec SSS lower than expected as a result of the storm Elliott
HUM Raises FY23 individual Medicare Advantage products at least 775K (prior at least 625K) citing continued higher than anticipated sales volumes and favorable member retention early in 2023; Affirms FY23 >$28.00 v $28.02e
(US) INITIAL JOBLESS CLAIMS: 192K V 200KE; CONTINUING CLAIMS: 1.65M V 1.70ME
(US) Q4 PRELIMINARY GDP ANNUALIZED Q/Q: 2.7% V 2.9%E; PERSONAL CONSUMPTION: 1.4% V 2.0%E
(US) Q4 PRELIMINARY GDP PRICE INDEX: 3.9% V 3.5%E; CORE PCE Q/Q: 4.3% V 3.9%E
(US) DOE CRUDE: +7.7M V +2ME; GASOLINE: -1.9M V +0.5ME; DISTILLATE: +2.7M V -0.5ME
(CN) Reportedly China and Russia negotiating the purchase of 100 strike drones, which could be delivered as soon as Apr 2023 - German press
INTU Reports Q2 $2.20 v $1.43e, Rev $3.0B v $2.90Be
SQ Reports Q4 $0.22 v $0.27e, Rev $4.65B v $4.53Be
SQ Jan-Feb 2023 Combined Gross Profit +25% y/y - shareholder letter
(JP) JAPAN JAN NATIONAL CPI Y/Y: 4.3% V 4.3%E; CPI EX-FRESH FOOD (CORE) Y/Y: 4.2% V 4.3%E (highest annual pace in 41 years)
(JP) BOJ GOV NOMINEE UEDA: Reiterates current monetary easing is appropriate; it takes time to achieve sustainable inflation (2% target) - Parliament testimony
(CN) China Ministry of Foreign Affairs (MOFA) releases proposal related to Ukraine; Calls for ceasefire and resuming peace talks; Calls for respecting the sovereignty of all countries; Dialogue and negotiation are the only viable solution to the Ukraine crisis
FRI 2/24
BAS.DE Reports final Q4 €0.09 v €0.30e, adj EBIT €373M v €420.2Me, Rev €19.3B v €20.1Be; Plans to eliminate 2.6K jobs in cost cutting initiative (2% of global workforce); To close one of two ammonia plants in Ludwigshafen
(US) US HIKING TARIFFS ON OVER 100 RUSSIA METALS, MINERALS AND CHEMICALS WORTH $2.8B; CONFIRMS NEW SANCTIONS AGAINST RUSSIA; ALSO TO SANCTION SOME THIRD-COUNTRY FIRMS, INCLUDING IN CHINA AND EUROPE – PRESS
WAF.DE Reports prelim Q1 Rev -15% q/q citing expected inventory adjustments for the next quarters and short-term postponement of delivery volumes of some customers in H1 2023
ERICB.SE Reportedly to cut 8.5K workers globally (~8% of total) – press
GM Spokesperson: Confirms GM to halt production at its Fort Wayne Truck Assembly plant in Indiana from Mar 27th for two weeks, citing DSO inventory bloat (**Note: 2nd time in 1 year) - press
(US) JAN PERSONAL INCOME: 0.6% V 1.0%E; PERSONAL SPENDING: 1.8% V 1.4%E
(US) JAN PCE DEFLATOR M/M: 0.6% V 0.5%E; Y/Y: 5.4% V 5.0%E (1st acceleration in annual pace in 7 months)
(US) FEB FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 67.0 V 66.4E
(US) Fed’s Bullard (Non-Voter): Soft landing is feasible; Expect inflation to come under control in quarters and years ahead
(US) Atlanta Fed GDPNow: Raises Q1 GDP from 2.5% to 2.7%
TradeTheNews.com Weekly Market Update: Markets turbulent as they reassess central bank policy determination
2/10/2023 4:06:47 PM
US equity markets encountered their first significant choppiness of 2023 this week. Stocks came under modest pressure in the wake of last Friday's strong jobs report. Tuesday Fed Chairman Powell largely kept to the script from last week's FOMC press conference which was viewed by some as a win for the bulls who avoided a fresh incrementally hawkish message in the aftermath of last week’s employment report. Nevertheless, when pressed, he acknowledged the reality is that the Fed will react to the data, and if we get more job reports like January's they may indeed have to do more. Stocks then moved out to the week’s highs late in Tuesday’s session after the S&P held 4100. As the week progressed a slew of Fed officials fell in line behind Powell's tone suggesting officials still seem comfortable the economy is performing in line with their December SEP projections. Bond markets finally seemed to acquiesce to Fed officials insistence they are not done yet on inflation. As market participants assessed all of this information, futures markets saw tightening forecasts rise with the cycle ceiling topping 5.15%, and more importantly the year-end rate expectation rising aggressively to 4.9% (up ~60bp in about a week).
On Thursday, stock prices rolled over moving back below that prior 4100 support level in the S&P 500 Index. The weakness came alongside an upside break in the US 2-year yield to 4.5% for the first time since late November. A sloppy 30-year US bond auction exacerbated the upward trajectory in yields. Crude prices moved up into Friday’s session amid news Russia is planning to unilaterally cut oil production in March by 500K bpd. The news came after a week rife with speculation President Putin is preparing to launch a fresh military offensive in Ukraine soon. University of Michigan consumer sentiment moved out to a 1-year high with the 1-year inflation expectation pushing higher. The Japanese Yen exhibited a bout of volatility after it was apparently leaked PM Kishida is likely to nominate an academic with prior BOJ experience, Kazuo Ueda, as the next BOJ Governor. The US dollar index finished the week holding at roughly 1-month high. For the week, the S&P lost 1.1%, the DJIA was off 0.2%, and the Nasdaq fell 2.4%.
Some travel and leisure related names such as Hilton reported better than expected results as they continue to benefit from pent up demand for travel. Strong theme park results powered Disney to an earnings beat, but new streaming subscriptions were light, as returning CEO Iger announced a reorganization that would seek to reign in content spending and squeeze more money out of existing assets. Mobility giant Lyft missed earnings expectations by a wide margin and guided lower after the SEC reported ordered the company to include insurance reserve costs in its accounting, and as management said it was forced to implement price cuts for its service to stay competitive.
Indicative of the worldwide growth slowdown, shipping giant Maersk reported weak numbers, saying they are observing a significant inventory adjustment and that their seaborne freight business will be a lot worse in H2 of 2023 versus the first half. Adidas reported weak preliminary FY22 numbers largely on a huge writedown on inventory of Yeezy footwear it was stuck with after the company broke off its relationship with Kanye West.
SUN 2/5
2317.TW Reports Jan (NT$) Rev 660.4B +48.2% y/y, +4.9% m/m; Notes operations returning to normal and shipments increasing at iPhones' assembling plant Zhengzhou in China
(JP) Japan Fin Min Suzuki: Have not heard anything about nomination of Amamiya as BOJ Gov, have been 'out of the loop' on BOJ nomination [comments on press report]
(TR) Magnitude 7.7 earthquake strikes central Turkey and Syria; cites GFZ; Initial reports that 76 people have been killed, 440 injured - financial press
(JP) JAPAN DEPUTY CHIEF CABINET SEC ISOZAKI: REFUTES NIKKEI REPORT RELATED TO BOJ GOV POSITION
MON 2/6
TSN Reports Q1 $0.85 v $1.35e, Rev $13.3B v $13.1Be
CMI Reports Q4 $4.52 adj v $4.66e, Rev $7.78B v $7.36Be; Demand remain strong, esp in 1H-23
(US) Fed's Bostic (non-voter): January jobs data raises possibility of a higher peak rate; Could move back to a 50bps hike if needed
(AU) RESERVE BANK OF AUSTRALIA (RBA) RAISES CASH RATE TARGET BY 25BPS TO 3.35%; AS EXPECTED
TUES 2/7
BP.UK Reports Q4 Adj Net $4.81B v $5.11Be, Rev $69.3B v $59.5Be; Announces further $2.75B buyback; Increases div by 10%
(UK) JAN HALIFAX HOUSE PRICE INDEX M/M: 0.0% V -1.5% PRIOR; Y/Y: 1.9% V 2.0% PRIOR (weakest annual pace in three years)
BP.UK Strategy update: Raises FY25 EBITDA $46-49B at $70/bbl (prior $38B at $60/bbl); Targets up to $8B more into transition growth engines by 2030 and up to $8B more into oil and gas by 2030
(TW) Taiwan Jan Trade Balance: $2.3B v $3.9Be; Semiconductor exports in Jan dropped the most in 14 years
(CN) CHINA JAN FOREIGN RESERVES: $3.184T V $3.155TE; gold portion rise for the 3rd straight month
LIN.DE Reports Q4 $3.16 v $2.91e, Rev $7.90B v $8.09Be
Jan Manheim Used Vehicle Value Index: +2.5% M/M; -12.8% Y/Y; 75% of segments rose m/m
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: +3.2% v -0.1% prior
EOAN.DE Reports prelim FY22 adj Net €2.7B v €2.4Be, EBITDA €8.0B v €7.7Be; due to the addition effect of the segment results
(US) Fed Chair Powell: Disinflationary process has begun, but we are at the very early stages; Process going to be bumpy, reiterates will need further rate increases
(US) DEC CONSUMER CREDIT: $11.6B V $25.0BE
(US) President Biden: Reiterates US seeks competition and not conflict with China; Confirms he proposes the tax on corporate stock buybacks be quadrupled - State of the Union
(IN) INDIA CENTRAL BANK (RBI) RAISES REPURCHASE RATE BY 25BPS TO 6.50%; AS EXPECTED
WED 2/8
AKZA.NL Reports Q4 Net €8.0M v €86.2Me, Adj Op €126M v €124Me, Rev €2.61B v €2.59Be
MAERSKB.DK Reports Q4 EBIT $5.12B v $5.35Be, EBITDA $6.54B v $6.42Be, Rev $17.8B v $18.5Be
TTE.FR Reports Q4 adj Net $7.56B v $7.66Be, adj EBITDA $16.0B v $15.3Be, Rev $68.6B v $60.4B y/y
MAERSKB.DK CEO: Expect ocean business to be a lot worse in H2 2023 compared to H1; Seeing significant inventory adjustment; Shipping industry is heading into much more normal world - post earnings comments
(UR) UK extends Ukraine military training to pilots and marines [Note: UK to become first country in the world to provide fighter jet pilots training for Ukraine] – press
BG Reports Q4 $3.24 v $3.19e, Rev $16.7B v $18.2Be; Notes market environment expected to continue to be favorable in 2023
ATVI UK CMA notes Microsoft/Activision deal raising concerns; Could harm UK gamers by weakening rivalry between Xbox and PlayStation gaming consoles; Final report to be issued on Apr 26th
(US) Fed’s Williams (voter): Labor market is very strong, still have work to do on rates; Will need to maintain restrictive rates for a few years
(NL) ECB's Knot (Netherlands): ECB still has quite some ground to cover on rates, may need 50bps in May if underlying prices do not slow
(US) DOE CRUDE: +2.4M V +2ME; GASOLINE: +5.0M V +1.5ME; DISTILLATE: +2.9M V +0.5ME
(US) USDA WORLD AGRICULTURAL SUPPLY AND DEMAND ESTIMATES (WASDE) CROP REPORT; End 2022/2023 US Stocks (M bu) Soybeans: 225 v 211e; Corn: 1,267 v 1,266e; Wheat: 568 v 576e
(US) Atlanta Fed GDPNow: Raises Q1 GDP from 2.1% to 2.2%
SIE.DE Reports Q1 EPS €2.08 (pre PPA) v €2.24 y/y, Industrial business profit €2.69B v €2.50Be, Rev €18.1B v €18.3Be; Raises outlook Cites strong start to 2023
DIS Reports Q1 $0.99 v $0.69e, Rev $23.5B v $23.3Be; Saw higher loss at Disney+
(US) President Biden: See no recession in 2023 or 2024; China's economy is not functioning very well; US will fully compete with China but does not look for conflict - PBS interview
THRS 2/9
CSGN.CH Reports Q4 (CHF) Net -1.39B v -1.14Be (biggest loss since 2008), Pretax -1.32B v -1.66B y/y, Rev 3.06B v 3.35Be; Acquires M.Klein & Co for $175M
(JP) Japan LDP ruling party said to be divided if PM Kishida should seek BOJ pivot; Reportedly choosing Yamaguchi (vocal critic of Kuroda’s dovish policies) as new BOJ head would likely create party split – press
*(DE) GERMANY JAN PRELIMINARY CPI M/M: 1.0% V 1.0%E; Y/Y: 8.7% V 8.9%E (lowest annual pace in 5 months)
UNA.NL Reports FY22 EPS €2.57 v €2.62 y/y, adj Op €9.7B v €9.6Be, Rev €60.1B v €59.5Be
7201.JP Reports 9M Net ¥115.0B v ¥201.3B y/y, Op ¥289.7B v ¥191.3B, Rev ¥7.50T v ¥6.15T y/y; Cuts FY23 Global sales outlook
(SE) SWEDEN CENTRAL BANK (RIKSBANK) RAISES REPO RATE BY 50BPS TO 3.00%; AS EXPECTED; Forward guidance sees rates likely being raised in spring 2023
PEP Reports Q4 $1.67 v $1.64e, Rev $28.0B v $26.8Be; Expects $1B in buybacks during 2023; Raises annual dividend 10% to $5.06/shr
HLT Reports Q4 $1.59 adj v $1.20e, Rev $2.44B v $2.34Be
ABBV Reports Q4 $3.60 v $3.54e, Rev $15.1B v $15.4Be; Guides FY23 light
K Reports Q4 $0.94 v $0.84e, Rev $3.83B v $3.66Be
(US) INITIAL JOBLESS CLAIMS: 196K V 190KE; CONTINUING CLAIMS: 1.69M V 1.66ME
ABBV Guides Q1 $2.39-2.49 v $3.00e, Rev $11.8B v $13.3Be - earnings call
ADS.DE Reports prelim FY22 Net €254M v €1.49B y/y, Op €669M v €1.99B y/y, Rev €22.5B v €21.2B y/y; Guides initial FY23 light on adverse impact from not selling the existing stock
LYFT Reports Q4 -$0.74 v +$0.10e, Rev $1.18B v $1.16Be; Guides Q1 below consensus
(CN) CHINA JAN CPI M/M: 0.8% V 0.0% PRIOR; Y/Y: 2.1% V 2.1%E
FRI 2/10
2330.TW Reports Jan (NT$) Rev 200.1B +16.2% y/y and +3.9% m/m
7267.JP Reports 9M Net ¥583.2B v ¥582.2B y/y, Op ¥733.9B v ¥671.7B y/y Rev ¥12.5T v ¥10.7T y/y, Announces stock buyback of up to 1.5% of shares or ¥70.0B; Trims Rev outlook
(UK) Q4 PRELIMINARY GDP Q/Q: 0.0% V 0.0%E; Y/Y: 0.4% V 0.4%E
(RU) Russia Deputy PM Novak: Russia plans to voluntarily cut oil production in Mar by 500Kbpd to improve market situation (**Note: 500Kbpd is ~4.7% of Russia production)
(JP) POTENTIAL BOJ GOV NOMINEE KAZUO UEDA: BOJ MONETARY POLICY IS APPROPRIATE; NEED TO CONTINUE EASY POLICY; NOTHING HAS BEEN DECIDED ON NOMINATION - JAPAN TV
(UR) Ukraine Chief Commander: Russian missiles crossed over Romania and Moldova before landing in Ukraine [**Note: Romania is NATO member]
(EU) Moldova PM Gavrilita to step down
(CA) CANADA JAN NET CHANGE IN EMPLOYMENT +150K V +15.0KE; UNEMPLOYMENT RATE: 5.0% V 5.1%E
(US) FEB PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 66.4 V 65.0E (Highest since Jan 2022)
TradeTheNews.com Weekly Market Update: Central bank endgame speculation fuels risk appetite
2/3/2023 4:21:59 PM
Investors navigated a jam packed week of catalysts this week including major central bank announcements, an intense slate of quarterly earnings reports, and a plethora of economic readings culminating in a remarkably strong January jobs report on Friday. Crude oil prices rolled over after OPEC+ left its output plans unchanged, as expected. Early in the week, stocks drifted upward as the path of least resistance remained higher. The improving technical picture brought about by the strong start to 2023 continued to aid sentiment overall. Earnings reports offered glimpses of strength where managements proved successful in navigating macro uncertainty and high inflation heading into 2023. Rates crept up ahead of the mid-week FOMC announcement while market expectations remained highly stable. Tech stocks in particular stayed hot as Fed fund futures continued to project the central bank would shift to cutting rates by the end of 2023.
US indices opened lower Wednesday. Monthly JOLTS jobs data pushed back above 11M ahead of the FOMC statement. Treasury yields then moved decidedly lower and stock prices jumped after the Fed hiked by 25 basis points and offered hints that the end of the rate hike cycle is nearing. The statement reiterated that additional rate increases remained necessary, but Chairman Powell defined that as "couple more" during his press conference. More importantly, he spent much of his Q&A emphasizing Fed officials have been “gratified” to see the disinflation process commence. He added if that disinflationary process were to pick up momentum and spread to the services sector faster than officials currently forecast, the FOMC will take that into account during its ‘meeting-by-meeting’ deliberations. Chairman Powell also did very little to go out of his way to push back or even indicate concern that markets still expect Fed rate cuts later this year.
The next day the Bank of England followed suit by offering tea leaves that suggested it too is about done hiking rates. The ECB, notably further behind the curve on hiking, didn’t scare markets by penciling 50 basis point moves for the next two meetings, as previously suggested. EU bond yields subsequently slid lower while the US 10-year yield slipped below 3.4% and the 2-year approached 4% for the first time since last September. Volumes surged on both the NASDAQ and NYSE, and the VIX approached 17, dropping to its lowest level in more than a year. Technicians saw the S&P 500 form a much-anticipated ‘golden cross’ with its 50-day moving average surpassing the 200-day.
Even a surprisingly strong January US jobs report resulted in only a marginal break in the momentum on Friday. Nonfarm payrolls more than doubled market expectations at 517 thousand. The unemployment rate dropped a tenth to 3.4% rather than ticking higher as had been expected, while average weekly hours made a startling jump to 34.7 from 34.3. Some were quick to point out potential seasonal factors for the head scratching strength, but with most of the December data revised higher it is hard view the report as anything less than another sign of an “out of balance” labor market that Fed officials have emphasized they need to see come back into line before ending this rate hike cycle. The robust jobs data was followed up by a very strong print for ISM services data. Nevertheless, there was only modest give back in the equity markets on Friday, suggesting that at least for now, investors continue view the data as support for a ‘soft landing’ narrative, rather than as a signal that the Fed needs to take rates substantially higher from here. Treasury yields did pop led by a 15+ basis point jump in the US 2-year and the US dollar rose. For the week, the S&P gained 1.6%, the NYSE slid 0.2%, and the Nasdaq tacked on 3.3%.
In corporate news this week, the pace of earnings reports picked up, with some constructive commentary from the tech giants despite shaky quarterly result that triggered some recent workforce reductions. Meta missed its bottom line numbers but Wall Street was pleased with CEO Zuckerberg’s pledge to focus on efficiency and cost cutting in the new fiscal year. Both Apple and Alphabet missed quarterly earnings expectations, but calmed investors with rosier discussions about the year ahead as well as highlighting their efforts in AI, a sphere which has drawn renewed investor interest in recent weeks. Along the same lines, a report noted that China’s Bidu will soon launch its own AI chatbot to rival OpenAI’s ChatGPT. GM reported strong quarterly numbers, noting EV demand remains strong enough that it has no plans to mirror Tesla’s price cuts. Caterpillar missed earnings expectations, sending shares lower, though management said 2023 would be better, with good demand and revenue supported by price actions.
SUN 1/29
BIDU Expected to launch AI chatbot service similar to ChatGPT in China during Mar 2023 - US financial press
MON 1/30
PHIA.NL Reports Q4 Adj EBITA €651M v €647M y/y, Rev €5.42B v €4.88Be; Job cuts being implemented as planned; Notes supply chain situation remains challenging; Expects further improvements to be gradual
RNO.FR Confirms to reduce mutual stake with Nissan to 15%; Nissan to invest into Renault's EV unit; Renault to transfer 28.4% of Nissan shares into a French trust
(ES) SPAIN JAN PRELIMINARY CPI M/M: -0.3% V +0.2% PRIOR; Y/Y: 5.8% V 5.0%E (first acceleration of annual pace in 6 months)
(DE) GERMANY Q4 PRELIMINARY GDP Q/Q: -0.2% V 0.0%E; Y/Y: 1.1% V 1.3%E (first Q/Q contraction since Q4 2021)
1211.HK Reports prelim FY22 (CNY) Net 16.0-17.0B +425-458% y/y, Rev at least 420B v 410Be
005930.KR Reportedly considers cutting its chip production - Korean press
(US) JAN DALLAS FED MANUFACTURING ACTIVITY: -8.4 V -15.0E
(US) Treasury quarterly financing estimates: to borrow $932B in Jan-Mar quarter v $860Be (prior estimate $578B)
005930.KR Reports Q4 final (KRW) Net 23.5T* v 10.8T y/y, Op 4.31T v 4.3T prelim, Rev 70.5T v 70.7T prelim; Expects weak chip demand in Q1 with steepening decline; Sees possible demand recovery in H2 2023
(CN) CHINA JAN MANUFACTURING PMI (GOVT OFFICIAL): 50.1 V 50.0E [first expansion in 3 months]
TUES 1/31
UBSG.CH Reports Q4 $0.50 v $0.38 y/y, Rev $8.03B v $8.71B y/y; To buy back >$5.0B in shares in 2023
(FR) FRANCE JAN PRELIMINARY CPI M/M: 0.4% V 0.5%E; Y/Y: 6.0% V 6.1%E
(TW) Taiwan Dec Export Orders Y/Y: -23.2% v -25.0%e; Sees Jan export orders -35.5% to -32.1% y/y
(DE) GERMANY JAN NET UNEMPLOYMENT CHANGE: -22.0K V +5.0KE; UNEMPLOYMENT CLAIMS RATE: 5.5% V 5.5%E
(UK) DEC MORTGAGE APPROVALS: 35.6K V 45.0KE (lowest since May 2020)
GM Reports Q4 $2.12 v $1.65e, Rev $43.1B v $41.3Be; FY23 guidance above estimates
GM Confirms GM and Lithium Americas to develop US-sourced lithium production through $650M equity investment and supply agreement
CAT Reports Q4 $3.86 v $3.95e, Rev $16.6B v $15.9Be
CAT Reports Q4 dealer statistics: Total machines +8% v +7% prior
CAT Guides initial FY23 Rev to increase y/y supported by favorable price; Guides initial FY23 Capex $1.5B v $1.4B y/y - earnings slides
PFE Reports Q4 $1.14 v $1.04e, Rev $24.3B v $24.2Be; Guides FY23 below consensus
MCD Reports Q4 $2.59 v $2.45e, Rev $5.93B v $5.70Be; Expects short-term inflationary pressures to continue in 2023
AMZN Reportedly Whole Foods asking its suppliers to cut prices on packaged groceries as inflation slows down - US financial press
(US) Q4 EMPLOYMENT COST INDEX (ECI): 1.0% V 1.1%E
(US) Nevada reports Dec casino gaming Rev $1.31B, +14.3% y/y, Las Vegas strip Rev $814.2M, +25.1% y/y
(US) JAN CHICAGO PURCHASE MANAGER’S INDEX (PMI): 44.3 V 45.0E
(US) JAN CONSUMER CONFIDENCE: 107.1 V 109.0E
(US) Freeport LNG said to seek US permission to begin introducing gas into liquefaction train at liquefied natural gas plant in Texas
SNAP Reports Q4 $0.14 v $0.10e, Rev $1.30B v $1.30Be; Sees path to adj EBITDA breakeven in Q1
AMD Reports Q4 $0.69 v $0.66e, Rev $5.60B v $5.54Be; Guides Q1 Rev $5.0-5.6B v $5.57Be
(CN) CHINA JAN CAIXIN PMI MANUFACTURING: 49.2 V 49.8E [6th straight contraction]
(HK) Macau Jan Casino Rev (MOP): 11.6B ; Y/Y: +82.5% v -56.3% prior (+36.5%e)
WED 2/1
(UR) US said to be preparing new $2.2B aid package for Ukraine; To include new longer-range rockets for the first time since June 2022, artillery and other munitions - press
NOVN.CH Reports Q4 Core EPS $1.52 v $1.42e, Rev $12.7B v $12.9Be; Sandoz spin-off remains on track for H2 2023
(UK) JAN NATIONWIDE HOUSE PRICE INDEX M/M: -0.6% V -0.4%E; Y/Y: % V 1.9%E (fifth consecutive decline)
VOD.UK Issues Q3 Trading update: Service Organic Rev +1.8% v +1.8%e; Affirms FY23 guidance
(IT) ITALY JAN MANUFACTURING PMI: 50.4 V 49.5E (1st expansion in 7 months)
HLAG.DE CEO: The party is over as we are back to a normal shipping business; Container freight rates will keep declining in the current realignment of shipping demand and supply
(EU) EURO ZONE JAN CPI ESTIMATE Y/Y: 8.5% V 8.9%E (third-straight month of deceleration); CPI CORE Y/Y: 5.2% V 5.1%E V 5.2% PRIOR
(EU) EURO ZONE DEC UNEMPLOYMENT RATE: 6.6% V 6.5%E
TSLA Said to plan increasing Shanghai's average weekly output to 20K vehicles in Feb-Mar 2023 to meet increased demand following price cuts - press
HUM Reports Q4 $1.62 v $1.46e, Rev $22.4B v $22.5Be
TMUS Reports Q4 $1.18 v $1.10e, Rev $20.3B v $20.8Be
(US) JAN ADP EMPLOYMENT CHANGE: +106K V +180KE; Notes pay growth was flat in January
OPEC+ JMMC panel said to recommend no changes to current policy at meeting today (as expected) - press
(US) Treasury Quarterly Refunding Announcement; To sell $40B in 3-year notes, $35B in 10-year notes, $21B in 30-year bonds
(US) JAN FINAL S&P/MARKIT MANUFACTURING PMI: 46.9 V 46.8E (4th straight month of contraction)
(US) JAN ISM MANUFACTURING: 47.4 V 48.0E; PRICES PAID: 44.5 V 40.4E
(US) DEC JOLTS JOB OPENINGS: 11.012M V 10.300ME
(US) DOE CRUDE: +4.1M V 0ME; GASOLINE: +2.6M V +1ME; DISTILLATE: +2.3M V -1ME
(US) FOMC RAISES TARGET RANGE BY 25BPS TO 4.50-4.75%; AS EXPECTED; REITERATES THAT ONGOING RATE INCREASES WILL BE APPROPRIATE; Notes inflation has "eased somewhat"
(US) Fed Chair Powell: We have more work to do: Without price stability economy does not work for all - rate decision press conference
(US) Fed Chair Powell: We are talking about a "couple of more rate hikes" to get to restrictive level - rate decision Q&A
(US) FERC approves Freeport LNG to restart activities (in line with expectations)
META Reports Q4 $1.76 v $2.12e, Rev $32.2B v $31.3Be; Announces $40B increase to share buyback; Cuts FY23 Opex & Capex outlook
COST Reports Jan total SSS +7.4% (ex-gas and FX) v +5.9%e
(JP) Bank of Japan (BOJ) releases text of Dep Gov Wakatabe speech: Wider YCC band could be problematic for easing effect; Should not weaken easing effects with policy tweaks
THRS 2/2
ABBN.CH Reports Q4 $0.61 v $0.39e, Op EBITA $1.12B v $1.16Be, Rev $7.82B v $7.58Be; Do not anticipate a major set-back in demand in 2023
6758.JP Reports 9M Net ¥809.0B v ¥771.1B y/y, Op ¥1.08T v ¥ 1.06T y/y, Rev ¥8.48T v ¥7.66T y/y; Raises outlook
DBK.DE Reports Q4 Net €1.80B v €145M y/y, Pretax €775M v €1.25Be, Rev €6.32B v €5.90B y/y
ROG.CH Reports FY22 (CHF) Core Op 20.30 v 20.61e, Rev 63.3B v 63.3Be; Expects sharp decline in COVID-19 products sales in 2023
8306.JP Reports 9M Net ¥343.2B v ¥1.07T y/y, Pretax ¥848.9B v ¥1.39T y/y, Rev ¥6.79T v ¥4.36T y/y
SONY CFO: Raises FY23 PS5 sales to 19M units (prior 18M); Expects global smartphone market to recover from H2 2023 - post earnings comments
HON Guides Q1 $1.86-1.96 v $2.04e, Rev $8.3-8.6B v $8.67Be; Notes good start to 2023 with sequential improvement to follow; Supply chain improvement continues in Q1 - earnings slides
(UK) BOE FEB MINUTES: VOTE WAS 7-2 ON TODAY'S DECISION; Tenreyro and Dhingra again voted to hold rates unchanged
(UK) BOE Gov Bailey asked if rates might have peaked: We have changed the language we use - Q&A
(EU) ECB RAISES KEY RATES BY 50BPS; AS EXPECTED; Hints another 50bps rate hike in Mar and then to reevaluate the rate path; Notes rates still have to rise "significantly and at a steady pace"
(US) INITIAL JOBLESS CLAIMS: 183K V 195KE; CONTINUING CLAIMS: 1.655M V 1.684ME
(US) Q4 PRELIMINARY NONFARM PRODUCTIVITY: 3.0% V 2.4%E; UNIT LABOR COSTS: 1.1% V 1.5%E
(EU) ECB chief Lagarde: Reiterates stance that expect growth to stay weak; 'Intend' to raise by 50bps in Mar; Intention is not 100% commitment; Would not say that the disinflationary process is already at play; Underlying inflation pressures are alive and kicking - Q&A
(US) DEC FACTORY ORDERS: 1.8% V 2.3%E
(EU) Reportedly ECB policymarkers see at least two more rate hikes; Some policymakers see 3.5% as terminal rate – press
QCOM Reports Q1 $2.37 v $2.35e, Rev $9.46B v $9.56Be
AMZN Reports Q4 $0.03 v $0.15e, Rev $149.2B v $145.4Be
GOOGL Reports Q4 $1.05 v $1.15e, Rev (ex TAC) $63.1B v $63.1Be; To optimize global office space, sees related costs at $0.5B in Q1
SBUX Reports Q1 $0.75 v $0.77e, Rev $8.71B v $8.81Be
F Reports Q4 $0.51 v $0.60e, Rev $44.0B v $39.3Be; Left ~$2.0B in profits on the table last year which was within our control
X Reports Q4 $0.87 v $0.60e, Rev $4.34B v $3.95Be
AAPL Reports Q1 $1.88 v $1.93e, Rev $117.2B v $121.2Be
QCOM CEO: Sees weak handset market persisting through first half; Taking steps to reduce expenses - post earnings comments
(CN) CHINA JAN CAIXIN PMI SERVICES: 52.9 V 51.0E [first expansion in 5 months]
(US) US Pentagon said a spy balloon was seen over 'a number of sensitive sites' in Montana, US; Senior official sees very high confidence that the balloon is Chinese: The ‘Gang of 8’ staff was briefed, Pres Biden asked for 'military options', but decided against because of the risk to civilians
FRI 2/3
SAN.FR Reports Q4 Business EPS €1.71 v €1.72e, Business Net €2.14B v €1.73B y/y, Rev €10.73B v €10.56Be
(EU) ECB's Simkus (Lithuania): Headline inflation has likely peaked but core remain stubborn; 50bps hike in Mar will not be last of half-point magnitude; Rate cut in 2023 is 'not very likely'
CI Reports Q4 $4.96 v $4.84e, Rev $45.8B v $45.6Be; Carrying great momentum into 2023; Raises Quarterly dividend 9.8% to $1.23 from $1.12 (indicated yield 1.63%)
(US) January preliminary NA Class 8 Net Orders 21.6K, -25% m/m; Continue to lock in build slots for 2H23 - FTRintel.com
(US) JAN UNEMPLOYMENT RATE: 3.4% V 3.6%E (lowest since Feb 2020)
(US) JAN CHANGE IN NONFARM PAYROLLS: +517K V +188KE (above any analysts' estimate and highest job creation since July 2022)
(US) JAN AVERAGE HOURLY EARNINGS M/M: 0.3% V 0.3%E; Y/Y: 4.4% V 4.3%E
(US) JAN FINAL S&P/MARKIT SERVICES PMI: 46.8 V 46.6E
(US) JAN ISM SERVICES INDEX: 55.2 V 50.5E (largest monthly increase since June 2020 and above all analysts' estimates)
(US) Fed's Daly (non-voter): Today's jobs number was a "wow" number but trend not surprising; Still see Dec SEP projections as a good guide post of where rates need to go
