YOUR QUIVER | January 26, 2023
Today's Rundown
CIO | Nadine Terman @SolsteinCapital details what she's seeing in global financial markets.
Mighty 4000
That’s the 200 DMA that has been a sticky top for the S&P. Technicians point to 4100 and 4325 as hurdles before investors can have a sustained rally. We point to slowing growth and sticky inflation as the culprits.
Advanced GDP
Investors are happy with the number, which shows the economy is growing but not at such a high level to fuel the Fed for greater hikes. We think investors should be careful with the number, which includes some economy activity from back in Oct. More near-term data on Jobs and Inflation/CPI is where the Fed is focused, and we’ll be hearing their rate decision next Wed (see below for a lovely countdown).
FOMO
Per a BBG chart from UBS, institutions had to have come in during the day session yesterday to bring the market up through the afternoon.
Asia Pac
Hong Kong’s Hang Sang popped +2.4% to its highest level since March 2022. Its business climate improved in Q1, and its unemployment rate dropped to its lowest level in 3 years. The Nikkei was down slightly -0.1% with energy, info, and utilities pressuring the market. USD/JPY continues to hover at Y130.00. The Kospi rose +1.6% even though South Korea’s economy had its first quarterly decline since 2020, with Q4 GDP down -0.4% because of lower exports (-5.8%). Mainland Chinese markets are still closed.
Europe
Up today, given retail stocks, banks and info tech. STOXX +0.6% as we write, and FTSE +0.3%.
TSLA
Are you a bull or a bear on this name? (Or do you not care?) The company beat rev and EPS estimates. Gross margins were worse than expected (25.9% vs 28.4% expected). Musk is saying they’ll make 2mm vehicles this year, netting out price cut impacts. The co nearly doubled its capacity last year for production. The rubber hits the road on Mar at their analyst day when more data is expected to be provided.
Gimme That Million $
In effect, that’s what Morgan Stanley told some employees after misuse of messaging tools for business, such as WhatsApp. The penalty per person depended on seniority, severity of the misuse, whether there had been warnings, etc. Fines ranged from a few $k to a cool $mm. Hard for folks not to pay up and shut up about it, though, versus losing their job over a compliance breach. Also, it’s good that shareholders won’t have to foot the complete bill for the firm’s regulatory penalty.
Sign of Slowing
$MA warned about revenue growth slowing faster than expected. Mgmt said that spend increased 11% in 4Q22, below the expected level, and would be in the high single digits in 1Q23, versus expectations for 10%. The message from $MA and $V has been that people are spending—just on lower cost items and generic brands. Yet the numbers show that continued high inflation is taking a bite out of overall spend trends.
