YOUR QUIVER | December 21, 2022
Today's Rundown
CIO | Nadine Terman @SolsteinCapital details what she's seeing in global financial markets.
House Call
Prez Zelensky is headed to DC to chat with Congress about getting that $2bn in aid plus Patriot missiles to fight Russia this winter. You can imagine Putin is having a bad day today as he watches the besties help each other out.
A Gentle Nudge
Prez Xi mentioned to former Russian Prez Medvedev that they would like to see talks on Ukraine. It’s hard to have your BFF be the neighborhood bully, especially when they are not even trying to pretend to be otherwise.
Mo' Money
Americans are still hoarding a record, growing amount of cash. We’ll see if they keep saving or spend some of this down in 2023. This sits in contrast to the UK, where public borrowing hit a Nov record given high energy prices.
Swoosh
$NKE reported a strong quarter with a 2Q gross margins and EPS beat and raised expectations for continued rebound. Moreover, high inventory levels have started to correct, and mgmt. talked about strong holiday season momentum. FedEx’s ($FDX) profits also beat top estimates, given higher prices and cost reductions. They expect $3.7bn in total savings since their cost reduction program started. Investors are happier now than back in Sep when they pulled their annual forecast.
Healthy Skepticism
ASR put out a solid report about the ECB shift driving investment opportunities. They disagree with the ECB’s forecast for a shallow recession and quick rebound, given EZ real narrow money growth. Plus, they disagree with the ECB’s hawkish inflation forecast, given declining commodity prices and euro FX rate appreciating. Their solution? Sell EUR long-dated inflation break-evens. Later, once the recession hits, you can buy Bunds.
No COP-Out
This week Cop15 agreed on goals for stopping biodiversity loss, just after EU leaders agreed to reforms to the EU Emissions Trading Scheme. In the former, they agreed to conserve at least 30% of the world’s lands and oceans while restoring at least 30% of “degraded” land and ocean ecosystems by 2030.
Gaining Confidence
German Gfk consumer confidence was up for the third consecutive month, and UK biz confidence had the strongest rebound since Apr 2021. They compare to small biz lack of confidence in China which has continued to fall. Consumer confidence in New Zealand also dropped to a record low as their rates rise….maybe people stopped trying to get dual citizenship post-pandemic heights.
Changing Desk Chairs
The Fed is expected to become more dovish with the Open Market Committee’s annual rotation of voters on monetary policy. Three hawks and one centrist are losing their votes to more centrist voters plus a dove and a hawk.
Canada Inflation
Declined to 6.8%, but core is still sticky. So, expect another rate hike.
The Big Reveal
Trump’s tax returns better be juicy, otherwise this is going to be like Geraldo Rivera opening Capone’s safe. Here is a video for those who want to relive the excitement.
Penny Pinching
Musk is saying that his cost-cutting stopped a $3bn Twitter shortfall, and he will be leaving as CEO once he finds a replacement (but still will be in charge of software, etc…..so we will see). It’s probably like parents saying that their kid can drive the little car grocery cart when they’re still guiding it from behind.
Naughty Boys
Businessweek is out with a story about Russia and Iran building a trade route to defy sanctions, investing up to $20 bn to ease passage of goods along water and rail.
