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China’s Manufacturing and Non-Manufacturing PMIs fell deeper into contractionary territory in November.
The Japanese government will reportedly pay for its planned increase in defense spending by tapping into a fund designated for FX intervention.
South Korea’s Industrial Production weakened at its fastest m/m pace since May in the November reading.
China’s November Manufacturing PMI 48.0 (expected 49.0; last 49.2) and November Non-Manufacturing PMI 46.7 (expected 48.0; last 48.7)
Japan’s October Industrial Production -2.6% m/m (expected -1.5%; last -1.7%). October Housing Starts -1.8% yr/yr (expected -1.3%; last 1.1%) and Construction Orders 7.9% yr/yr (last 36.6%)
South Korea’s October Industrial Production -3.5% m/m (expected -1.0%; last -1.9%); -1.1% yr/yr (expected 0.0%; last 0.7%). October Retail Sales -0.2% m/m (last -1.9%)
Australia’s October CPI 6.9% yr/yr (expected 7.4%; last 7.3%). October Private Sector Credit 0.6% m/m, as expected (last 0.7%), October Building Approvals -6.0% m/m (expected -1.8%; last -8.1%) and Q3 Construction Work Done 2.2% qtr/qtr (expected 1.5%; last -3.8%)
New Zealand’s October Building Consents -10.7% m/m (last 3.6%). November ANZ Business Confidence -57.1 (last -42.7)Major European indices trade in positive territory.
—Equity Markets—
STOXX Europe 600: +0.6%
Germany’s DAX: +0.3%
U.K.’s FTSE 100: +1.1%
France’s CAC 40: +0.9%
Italy’s FTSE MIB: +0.3%
Spain’s IBEX 35: +0.3%November CPI and core CPI readings for the eurozone were a bit cooler than expected, fueling speculation about peak inflation being in the rear-view mirror. That said, recessionary concerns remain alive after France reported a drop in consumer spending in October while Germany’s unemployment ticked up unexpectedly.
Bank of England Chief Economist Pill repeated that inflation is expected to decelerate significantly in the second half of 2023, but also said that more rate hikes are needed.
Eurozone’s November CPI -0.1% m/m (expected 0.2%; last 1.5%); 10.0% yr/yr (expected 10.4%; last 10.6%). November Core CPI 0.0% m/m (expected 0.6%; last 0.6%); 5.0% yr/yr, as expected (last 5.0%)
Germany’s November Unemployment Change 17,000 (expected 13,000; last 9,000) and November Unemployment Rate 5.6% (expected 5.5%; last 5.5%)
France’s November CPI 0.4% m/m, as expected (last 1.0%); 6.2% yr/yr, as expected (last 6.2%). October PPI -0.1% m/m (last 1.0%) and October Consumer Spending -2.8% m/m (expected -0.6%; last 1.3%). Q3 GDP 0.2% qtr/qtr, as expected (last 0.2%)
Italy’s November CPI 0.5% m/m (expected 0.2%; last 3.4%); 11.8% yr/yr (expected 11.3%; last 11.8%). Q3 GDP 0.5% qtr/qtr, as expected (last 1.1%); 2.6% yr/yr, as expected (last 4.9%)
Spain’s October Retail Sales 1.0% yr/yr (last 0.4%). September Current Account surplus EUR360 mln (prior deficit of EUR110 mln)
Swiss November ZEW Expectations -57.5 (last -53.1)The ADP Employment Change rose by 127,000 in November (Briefing.com consensus 200,000) after an increase of 239,000 in October.
Q3 GDP second estimate rose to 2.9% (Briefing.com consensus 2.7%) from the prior reading of 2.6%. The GDP Price Deflator second estimate rose to 4.3% (Briefing.com consensus 4.1%) from the last reading of 4.1%.
The advanced report for international trade in goods reflected a $99.0 billion deficit in October following a revised $91.9 billion deficit in September (from $92.2 billion).
The advanced report for retail inventories fell 0.2% in October after a revised 0.1% decline in September (from +0.4%).
The advanced report for wholesale inventories showed a 0.8% build in October after a revised 0.6% build in September (from 0.8%).
The MBA Mortgage Applications Index fell 0.8% compared to last week with purchase applications rising 4% while refinancing applications fell 13%.
The S&P 500 futures are down 3 points and are trading roughly in line with fair value.
The Nasdaq 100 futures are down 3 points and are trading slightly above fair value.
The Dow Jones Industrial Average futures are down 29 points and are trading slightly below fair value.Q3 GDP was revised up to 2.9% from the advance estimate of 2.6%. The GDP Price Deflator was also revised up to 4.3% (consensus 4.1%) from the advance estimate of 4.1%.
The key takeaway from the report is that growth was better than expected and inflation was higher than first thought.
Treasury yields shot higher immediately after the Q3 GDP release.
The 2-yr note yield, at 4.47% a short time ago, is up seven basis points to 4.53%.
The 10-yr note yield, at 3.72% a short time ago, is up three basis points to 3.77%.^^^ +1s on excellent posts above – as Q3-2022 GDP did a “cat bounce” back
The FED’s tapering down of “QE” + higher interest rates are key for 2023 outlook
based on future inflation readings … thankfully it was too cold in mtns as storms passed thru
Which “R” word is in store for us in 2023 “RECESSION” or “RECOVERY” 🙂RALLY TIME with DOW up +500 … Dovish outlook presented by FOMC chief
with possible reduced rate increases (50 BPS rather than 75 possibly as early as DEC-2022)CHRISTMAS CAME EARLY TODAY ON WALL STREET 😉 🙂
Dow 34,589.77 737.24 2.18%
S&P 500 4,080.11 122.48 3.09%
Nasdaq 11,468.00 484.22 4.41%
VIX 20.58 -1.31 -5.98%
Gold 1,783.60 19.90 1.13%
Oil 80.58 2.38 3.04%After-Hours
Box (BOX) beats by $0.01, reports revs in-line; guides Q4 EPS above consensus, revs below consensus; guides FY23 EPS above consensus, revs below consensus… BOX +0.2%
Costco (COST) reports November adjusted comparable sales growth of 5.3%… COST -3.6%
Elastic (ESTC) beats by $0.10, beats on revs; guides Q3 EPS above consensus, revs below consensus; guides FY23 EPS above consensus, revs below consensus; also announces workforce reduction… ESTC -13.4%
Five Below (FIVE) beats by $0.14, beats on revs, comps better than expected; guides Q4 EPS above consensus, revs above consensus… FIVE +8.9%
General Electric’s (GE) Board of Directors approves previously announced spin-off of its healthcare business; GE Healthcare expected to begin trading on Nasdaq on January 4, 2023, under the ticker “GEHC”… GE +0.8%
G-III Apparel (GIII) misses by $0.49, reports revs in-line; guides FY23 EPS below consensus, reaffirms FY23 revs guidance; also extends license agreements for Calvin Klein and Tommy Hilfiger… GIII -24.5%
Okta (OKTA) beats by $0.24, beats on revs; guides Q4 EPS above consensus, revs in-line… OKTA +15.1%
Pure Storage (PSTG) beats by $0.06, reports revs in-line; guides Q4 revs in-line… PSTG +1.8%
PVH (PVH) beats by $0.42, beats on revs; guides Q4 EPS in-line, revs in-line; also extends most of its license agreements with GIII for Calvin Klein and TOMMY HILFIGER… PVH +8.7%
Salesforce (CRM) beats by $0.18, reports revs in-line; guides Q4 EPS in-line, revs below consensus; Bret Taylor will step down as Vice Chair and Co-CEO, effective January 31, 2023; Marc Benioff will be Chair and CEO of the company… CRM -6.6%
Semtech (SMTC) beats by $0.02, beats on revs; guides Q4 EPS below consensus, revs below consensus… SMTC unchanged
Snowflake (SNOW) beats by $0.06, beats on revs; Sees Q4 Product revenue between $535-540 mln, up 49-50% yr/yr… SNOW -13.7%
Splunk (SPLK) beats by $0.58, beats on revs; guides Q4 revs in-line; slightly lowers FY23 Cloud ARR guidance… SPLK +6.9%
Synopsys (SNPS) beats by $0.07, reports revs in-line; guides Q1 EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus… SNPS +6.0%
Victoria’s Secret (VSCO) beats by $0.06, reports revs in-line; guides Q4 EPS in-line… VSCO -1.6%Equity indices in the Asia-Pacific region ended Thursday on a higher note
—Equity Markets—
Japan’s Nikkei: +0.9%
Hong Kong’s Hang Seng: +0.8%
China’s Shanghai Composite: +0.5%
India’s Sensex: +0.3%
South Korea’s Kospi: +0.3%
Australia’s ASX All Ordinaries: +1.0%Tokyo will reportedly raise its coronavirus alert level. Japan reported its first contractionary reading of the Manufacturing PMI in 22 months while South Korea’s Manufacturing PMI remained in contraction for the fifth month in a row.
Japan’s Chief Cabinet Secretary Matsuno said that increasing military cooperation between China and Russia is being monitored.
China’s November Caixin Manufacturing PMI 49.4 (expected 48.9; last 49.2)
Japan’s final November Manufacturing PMI 49.0 (expected 49.4; last 49.4) and Q3 Capital Spending 9.8% yr/yr (expected 6.4%; last 4.6%). November Household Confidence 28.6 (expected 30.3; last 29.9)
South Korea’s Q3 GDP 0.3% qtr/qtr, as expected (last 0.7%); 3.1% yr/yr, as expected (last 2.9%). November trade deficit $7.01 bln (expected deficit of $4.42 bln; last deficit of $6.70 bln). November Imports 2.7% yr/yr (expected 0.2%; last 9.9%) and Exports -14.0% yr/yr (expected -11.0%; last -5.7%). November Manufacturing PMI 49.0 (last 48.2)
Hong Kong’s October Retail Sales 3.9% yr/yr (last -1.4%)
Australia’s November Manufacturing PMI 51.3 (expected 51.5; last 52.7). Q3 Private New Capital Expenditure -0.6% qtr/qtr (expected 1.5%; last 0.0%)
India’s November Manufacturing PMI 55.7 (expected 55.0; last 55.3)Major European indices trade in the green.
—Equity Markets—
STOXX Europe 600: +1.1%
Germany’s DAX: +0.8%
U.K.’s FTSE 100: +0.1%
France’s CAC 40: +0.3%
Italy’s FTSE MIB: +0.8%
Spain’s IBEX 35: +1.0%Final November Manufacturing PMI readings from Germany, France, Spain, Italy, and the U.K. improved from their final October levels, but all remained in contractionary territory.
Germany’s ifo Institute noted rising demand for service staff. Ambulance drivers in the U.K. voted in favor of a strike.
Eurozone’s October Unemployment Rate 6.5% (expected 6.6%; last 6.6%). November Manufacturing PMI 47.1 (expected 47.3; last 46.4)
Germany’s October Retail Sales -2.8% m/m (expected -0.6%; last 1.2%); -5.0% yr/yr (expected -2.8%; last -0.9%). November Manufacturing PMI 46.2 (expected 46.7; last 45.1)
U.K.’s November Nationwide HPI -1.4% m/m (expected -0.3%; last -0.9%); 4.4% yr/yr (expected 5.8%; last 7.2%). November Manufacturing PMI 46.5 (expected 46.2; last 46.2)
France’s November Manufacturing PMI 48.3 (expected 49.1; last 47.2)
Italy’s November Manufacturing PMI 48.4 (expected 47.0; last 46.5). November Unemployment Rate 7.8% (expected 8.0%; last 7.9%)
Spain’s November Manufacturing PMI 45.7 (expected 45.6; last 44.7)
Swiss October Retail Sales -2.5% yr/yr (expected 3.5%; last 2.6%). November CPI 0.0% m/m (expected 0.1%; last 0.1%); 3.0% yr/yr, as expected (last 3.0%). November procure.ch PMI 53.9 (expected 54.0; last 54.9)Weekly initial jobless claims totaled 225,000 (consensus 238,000) following last week’s revised total of 241,000 (from 240,000). Continuing claims came in at 1.608 million after last week’s count of 1.551 million.
Personal income rose 0.7% in October (consensus 0.4%) following the 0.4% increase in September. Personal spending rose 0.8% in October (consensus 0.6%) versus a 0.6% increase in September.
The PCE Price Index rose 0.3% in October (consensus 0.4%) following 0.3% increase in September. The core PCE Price Index rose 0.2% in October (consensus 0.2%) after 0.5% increase in September.
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