YOUR QUIVER | December 22, 2022
Today's Rundown
CIO | Nadine Terman @SolsteinCapital details what she's seeing in global financial markets.
Hawkish GDP
3Q GDP, personal consumption, and core PCE beat expectations (below). So, yields up, stocks down most likely on the day, in the red at the open.
Little Changed
That’s what apps for US unemployment benefits were last week, staying at a near historically low level. Folks just don’t want to lay off other folks right now. Initial unemployment claims were up by 2k to 216k, versus the median forecast of 222k. Continuing claims were down to 1.67mm.
Giddy Up
Although Chinese mainland markets were slightly down/flattish, HK rose by +2.7% overnight. According to BBG, leading Chinese institutions pledge to increase growth and support the beaten down property sector. That said, WHO is stating that China is having a tough time counting their Covid cases, which have spiraled since reopening. Even Japan broke a 5-day losing streak, ending about +46bps higher, as the Japanese gov increased their 2023 fiscal growth forecast. Japan is going to issue more bonds to fund another year of record spending.
Big Gulp
Food 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.
Sunny Times in Sunnyvale
AMAT is making multi-billion dollar investments in a new R&D center in Sunnyvale, CA and will increase manufacturing capacity in TX and Singapore through 2030 to try to capture a potential $150bn in WFE cap ex expected from the industry-projected $1 tn in global semi revs, according to LOOP Capital.
Really?
Gucci caught heat this week with a new ad campaign featuring Harry Styles wearing a teddy bear t-shirt next to a cot mattress (which was after Balenciaga’s controversial teddy bear campaign). Maybe Kering needs to hire some Midwesterners with common sense to give a thumbs up/down before ads go out and cause self-inflicted pain. And these stars need to find new friends—maybe they should hang out with the Biebs, who is close to a $200mm deal to sell his music rights.
Micron Management
Micron is expecting a late 2023 rebound, but it’s not sitting around waiting—staff cuts are expected at 10%, and cap ex will be reduced. As prior notes have outlined, we expect a lot of cap ex hits next year, which will be a headwind for growth.
Giving a Flip
That’s what Caroline Ellison and Gary Wang are doing by pleading guilty to fraud and working with the Feds swarming FTX/Alameda.
Tesla Discount
It’s not just “Tom from Sales” giving a discount to reach his annual bonus bogey. Tesla the company is giving US customers $7,500 to take delivery of its 2 cheapest models before 2023 to fuel deliveries, which can’t be a great sign. Not representative of an “epic” end of year predicted by Musk.
