YOUR QUIVER | January 11, 2023
Today's Rundown
CIO | Nadine Terman @SolsteinCapital details what she's seeing in global financial markets.
The Waiting Game
Investors are waiting for the Thurs CPI print (another lovely countdown below). So, today is a good day to get things done, before tomorrow’s macro-driven market moves. This morning, stocks are up slightly, bond yields are down, oil and nat gas are up. Long duration plays are outperforming. According to our PBs, volumes are up. Long only accounts are strong. HF are better for sale in Europe, so take note. They’re taking profits into strength. Insurance and Healthcare are busy sectors. In the US, both LO and HF were better to BUY.
Rangebound
That’s what 42Macro says markets will be. They note that options flows haven’t generated enough bullish or bearish signals for profitable trades lately, and macro cross currents will keep markets rangebound through 1Q and potentially into 2Q, after which risk assets and bond yields will decline. They are pointing to a future credit cycle as the cause of this intermediate-term market decline. This jives with the PB notes, saying that investors are shifting between soft vs hard landing exposures, with rallied faded and dips used as short covering opportunities.
Upgrades and Downgrades
Guggenheim: upgraded $WBD and noted 31% upside
Oppenheimer: upgraded $EXPE to outperform after a ~50% decline
JPM and WF: raised px targets for $BA
BofA: upgraded three homebuilders with $NVR its top pick. BofA also upgraded $DOW to neutral and downgraded $IFF
Bernstein: downgraded $CRM to underperform and cited acquisitions masking slowing growth (“growth purgatory”)
JPM: downgraded $KMX
Tit for Tat
China suspended issuing visas in Japan and South Korea, given their restrictions for Chinese travelers, Reuters reports. China expects intl flights to increase to 2,300/wk by the end of March (from around 560 now). This is far below pre-pandemic levels (-75%) but better than none.
Screen Time
Apple will start using its own custom displays in mobile devices next year. Samsung and LG can’t be happy. The goal is to replace external suppliers with homemade parts.
Give Me a Hell Yeah
The Saudi PIF may purchase WWE, according to reports. Hence the stock px pop. They’ve got the dough, sports ambitions, and country-connection to the WWE (the Kingdom via the GEA has a partnership with the WWE). Steph McMahon is out as Chairwoman and CEO. Supposedly JPM was hired to run the deal process.
Data Not-Dependent
Eurozone inflation is still at historically high levels, but consumers’ expectations have declined to historical norms. Wha? In Germany, Italy and Spain, sentiment is close to or below the ave since the euro’s intro, according to EU data.
Stockpiling
US crude stockpiles popped 15 million barrels last week, per the API, which according to NoSo would be the biggest gain since February 2021. Cushing supplies up 2.3 million, and fuel stocks added a combined 2.9 million.
A Little $LUV
Management at $LUV are relieved they aren’t the focus of travel news, even for just one day. An overnight outage to Notam caused a nationwide grounding of US flight departures, causing delays for thousands of flights—a grounding which subsequently was lifted.
Inflation Boomer-ang
The NYT reported that the folks who aren’t coming back to work are the Boomers. After the GFC, they came back in droves for economic and other reasons. Now older with more savings, Boomers are staying retired. They report that folks 65+ have not come back, but Americans 55-64, the oldest of Gen X and youngest Boomers, came back and are at pre-pandemic levels. This matters for inflation because fewer returning workers = labor shortage = higher wages = higher prices put on consumers = inflation.
