YOUR QUIVER | March 8, 2023
Today's Rundown
CIO | Nadine Terman @SolsteinCapital details what she's seeing in global financial markets.
Powell's Play
It was clear that Powell wanted to deliver a hawkish message yesterday during his testimony. Now, investors are extrapolating a potential 6% top on rates with the potential for 50bps rate hikes, versus the prior expected consensus of 25bps at upcoming meetings. Whether or not the Fed delivers these kind of hikes remains to be seen. He would have had no incentive to come in with a dovish bent when politicians want to look like they are standing up for constituents during a higher inflationary period. This morning we saw private payrolls increased by 242k in Feb, more than expected per ADP. So, add that to the hawkish data ledger.
The New Spread
The UST curve is giving off recession vibes as the 2-10 UST spread fell below -100 for the first time since 1981.
Not to Be Outdone
In EZ news, Knot said that investors should expect the ECB to keep raising rates after March, per Reuters. But recent data showed that the economy failed to expand at the end of 2022, with revised data for Germany and Ireland reducing previous growth readings.
The New April
Per BBG, the sell side is reducing outlooks for companies at the fastest pace since 2010. Typically they bring numbers down by April. From June 2022 through today, analysts cut 2023 EPS estimates by 12%, which would be the sharpest cut in full-year outlooks since 2020, per RBC. But, consensus overall expects S&P 500 EPS at $220 in 2023, versus $222 in 2022—so I would expect June will be the new April.
Safe Haven
Japan’s Nikkei was up 48pbs, a stronger Yen drove buying. This compared to the Hang Seng down -235bps.
K-Pop
According to Yonhap, South Korea expects to spend 70% of its employment-related budget for job creation in 1H23 because of signs of a slowdown in its job market, per SK’s finance minister. Last year the country reported the largest number of job additions in more than 20 years. So, it expects to front-load spend this year to keep the party going.
Saying Goodbye
VPNOverview stated that Instagram, Facebook and Snapchat had the most internet searches from people looking to delete apps in the most recent 6 mo study period. Because these apps are on many people’s phones, it makes sense that they could lead the list, but management should take note.
Gimme Shelter
NYC is where high end properties are getting purchased the most, per Altrata. Over 21,700k ultra-high-net-worth individuals worth over $30mm own either a primary or secondary residence there. Next on the list were London and HK, followed by LA and Miami. In the US, Aspen has the highest concentration of wealthy residents.
