Morning Roundup

By Mark Masterson on January 24, 2023

Good morning,

Below are the news items moving markets today

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Executive Summary:

It remains a big week for earnings season. 

Below is the list of notable names reporting each day.  The names on deck will certainly keep us on our toes this week….

Earnings Whispers 1/23/23

A few interesting charts from overnight….

The Fed may not like the below chart. 

Each time the market rallies, financial conditions loosen.  With looser conditions, inflation pressures will rise.   The China re-opening story is keeping the commodity complex floating higher and will add pressure over time to the Fed if inflation does not moderate….

As an aside – I saw the below stat about China this morning.  What do you think of this…. “China currently holds 96% of global copper inventories, 75% of global aluminum, 70% of corn, 54% of wheat, 30% of soybeans  and 22% of crude oil: JPM”

Daily Shot 1/24/23

Yes – CPI is reported at 6.5%.

I posted the below a while back and wanted to see where the ShadowStats inflation measure is today.  You may recall ShadowStats takes today’s inflation data and runs it through the same formulas that were used to calculate CPI in 1990 and in 1980.  Why?  John Williams of ShadowStats believes the government changes the calculation for CPI to make it appear lower. 

As you can see, using the 1990 formula – CPI is north of 10%.  Using the 1980 formula, CPI is almost 15%.

Hmmmmm

Shadowstats 1/24/23

The potential for stagflation remains real as inflation stays elevated, and growth slows.

To those who expect a soft landing or no recession, I’d highlight the below chart showing Leading Economic Indicators slowing yet again…..

MacroCompass.com 1/24/23

More below…..

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Articles of Interest:

• Corporate:
  • DoJ poised to sue Alphabet’s Google as soon as Tuesday over company’s dominance over digital ad market (Bloomberg)
  • US tech outperformance drawing concern from traders bracing for sector’s worst earnings performance since 2016 (Bloomberg)
  • Microsoft investing $10B in OpenAI as ChatGPT popularity grows (Bloomberg)
  • Goldman Sachs asset management arm to significantly reduce its $59B of alternative investments (Reuters)
  • Ford Motor plans to cut about 3,200 jobs across Europe, following workforce reductions in the US (Bloomberg)
• Energy:
  • Chinese buyers now account for signing 40% of long-term LNG contracts (Nikkei)
• Washington:
  • California Democrat says Biden might be forced to take unilateral action to avoid a debt ceiling crisis (Bloomberg)

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Charts of the day:

I keep reading how everyone is bearish.

I’m doing my best in my Morning Roundup to show you that in fact, that is false.

Speculation is rampant today in the options market.

Meme stocks are surging again, along with Bitcoin.

And….Sentiment for dumb money/retail is at extreme optimism…..

See below

Sentimenttrader.com 1/24/23

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Quote of the day:

“Twenty years from now, you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sail. Explore. Dream. Discover.”

— Mark Twain