Stansberry Research

Tuesday Morning Market Headlines

C. Scott GarlissStansberry NewsWire

Five Stories Moving the Market:

China’s economy ends the year in a slump as COVID infections surge – Bloomberg. China’s economy ended the year in a major slump as business and consumer spending plunged in December, with more disruption likely in the first few months of the year as COVID infections surge across the country.

Some in China return to regular activity after COVID infections – Reuters. Some people in the Chinese cities of Beijing, Shanghai, and Wuhan braved the cold and a rise in COVID-19 infections to return to regular activity on Monday, raising the prospect of a boost to the economy as more recover from infections.

Putin doubles down on Ukraine war in New Year speech – WSJ. Russian President Vladimir Putin used his annual New Year’s address to justify Moscow’s invasion of Ukraine and flayed the West for what he said were its attempts to use the conflict to divide Russia, in a speech that appeared intended to signal his resolve to prolong the war.

IMF Chief Georgieva warns of ‘tough year’ for the world economy – Bloomberg. International Monetary Fund Managing Director Kristalina Georgieva warned that the global economy faces “a tough year, tougher than the year we leave behind,” as the U.S., EU, and China slow down simultaneously.

Tesla reports record quarterly deliveries but misses estimates - Reuters. Tesla on Monday reported record production and deliveries for fourth-quarter electric vehicles, but it missed Wall Street estimates, burdened by logistics problems, slowing demand, rising interest rates, and fears of recession.

Market Headlines:

Global Macro:

New Chinese Foreign Minister Qin Gang sought better Sino-U.S. ties in a phone conversation with Secretary of State Antony Blinken on New Year’s Day, according to a statement from the Ministry of Foreign Affairs in Beijing - Bloomberg.

North Korean leader Kim Jong Un vowed to develop a new intercontinental ballistic missile system and exponentially increase his nuclear arsenal, according to year-end comments published by state media on Sunday - WSJ.

Asia’s manufacturers remained under pressure in December as activity continued to contract under the weight of slowing global demand - Bloomberg.

Singapore's economy grew 3.8% last year, driven by the lifting of COVID-19 border restrictions and the return of international visitors to the Asian financial hub, according to preliminary data released on Tuesday – Nikkei Asia.

Chinese President Xi Jinping called on Saturday for more effort and unity as the country enters a "new phase" in its approach to combating the pandemic, in his first comments addressed to the public on COVID-19 since his government changed course three weeks ago and relaxed its rigorous policy of lockdowns and mass testing - Reuters.

Business owners in China say they have to get their supply chains in order after a topsy-turvy time capped by a reversal on COVID-19 restrictions —and withstand a wave of new infections sweeping through employee ranks - WSJ.

Price increases are planned in 2023 at the majority of Japanese companies that produce food and other daily necessities, a Nikkei survey finds, with businesses caught between covering surging costs and keeping customers happy – Nikkei Asia.

Australia’s housing market suffered its biggest annual decline since 2008 as sharp interest rate hikes sapped buying power and put off investors - Bloomberg. 

Russia acknowledged that dozens of its troops were killed in one of the Ukraine war's deadliest strikes, angering Russian nationalists, including lawmakers, and drawing demands for commanders to be punished for housing soldiers alongside an ammunition dump - Reuters.

Big banks are predicting that an economic downturn is fast approaching as more than two-thirds of the economists at 23 large financial institutions that do business directly with the Federal Reserve are betting the U.S. will have a recession in 2023 - WSJ.

U.S. interest-rate strategists mostly expect that Treasuries will extend their recent rally, dragging yields lower and steepening the curve in the second half of 2023 so long as labor market conditions soften and inflation ebbs - Bloomberg.

Drugmakers including Pfizer, GlaxoSmithKline, Bristol Myers Squibb, AstraZeneca, and Sanofi plan to raise prices in the United States on more than 350 unique drugs in early January, according to data analyzed by healthcare research firm 3 Axis Advisors - Reuters.

Some novices who took up trading during the pandemic are abandoning the hobby as the market swooned in 2022, taking the fun out of day trading for many newbies - WSJ.

The yen advanced to a six-month high versus the U.S. dollar as it extends gains following the Bank of Japan’s decision last month to raise its bond-yield cap - Bloomberg.

Company Specific:

U.S. oil company Chevron is sending two oil tankers to Venezuela, one of which will load the first cargo of crude destined for the United States in nearly four years, according to a person familiar with the matter and shipping data - Reuters.

Southwest Airlines was up and running on a normal schedule on Friday after a massive winter storm crippled operations this week and exposed problems at the low-cost carrier - Reuters.