Stansberry Research

Wednesday Morning Market Headlines

Newswire TeamStansberry NewsWire

Five Stories Moving the Market: 

Australian CPI inflation rebounds to annual 7.3% in November – Reuters. Australian inflation re-accelerated in November as strong demand drove holiday costs higher and flooding pushed up vegetable prices, a sign inflationary pressures had yet to peak.

Fed’s Bowman says more rate hikes needed to curb inflation – Bloomberg. Federal Reserve Governor Michelle Bowman said the central bank has more work to do to curb inflation, noting that further interest-rate increases are needed and officials should hold them at restrictive levels for some time to stabilize prices. 

ECB's Centeno says we are approaching the end of the interest rate rise process – Reuters. European Central Bank's governing council member Mario Centeno said on Tuesday the current process of interest rate increases is approaching its end. 

Gundlach says listen to bond market rather than Fed on rates – Bloomberg. Prominent fixed-income manager Jeffrey Gundlach said investors trying to figure out how the interest-rate situation will play out should pay attention to the bond market rather than the Federal Reserve. 

Powell says Fed will not become a ‘climate policy maker’ – WSJ. The Federal Reserve must avoid straying into political issues that aren’t directly related to its economic-management objectives to protect its ability to bring down inflation without interference from elected officials, said Chair Jerome Powell. 

Market Headlines: 

Global Macro: 

The World Bank sharply lowered its growth forecast for the global economy this year as persistently high inflation has elevated the risk of a worldwide recession - WSJ. 

Japan's Ministry of Finance is considering issuing green transition bonds in the second half of next fiscal year from April, as part of plans to push climate change efforts, a top official said on Wednesday – Reuters 

British Prime Minister Rishi Sunak and his Japanese counterpart Fumio Kishida will sign a defense agreement in London on Wednesday that will allow the countries to deploy forces on each other's soil, the latest move towards closer security ties – Reuters 

China stopped issuing visas for visitors from South Korea and Japan on Tuesday, in a retaliatory move against neighbors that have stiffened entry restrictions on Chinese travelers due to a surge of COVID infections in the country – Nikkei Asia.  

New bank lending in China unexpectedly rose in December from the previous month, central bank data showed on Tuesday, with 2022 setting a record high for lending as the central bank continued to support the COVID-ravaged economy - Reuters.

Chinese developers are facing growing pressure on debt repayment as 958 billion yuan ($141 billion) of onshore and offshore bonds come due by the end of this year, data from a property think tank show – Nikkei Asia.

A record number of business and government leaders will descend on the Swiss resort of Davos next week to pore over challenges ranging from global economic slowdown to environmental collapse as the World Economic Forum returns to its winter slot – Reuters 

Companies including GM, Ford, Google, and solar energy producers said on Tuesday they would work together to establish standards for scaling up the use of virtual power plants (VPPs), systems for easing loads on electricity grids when supply is short - Reuters. 

JPMorgan Chief Executive Jamie Dimon said Tuesday that the Federal Reserve may need to raise interest rates to 6% to fight inflation, which would be higher than most are expecting this year – WSJ 

Rates are likely to peak at about 5.5% and will remain higher for longer to contain spiraling prices of everything from food to fuel, professors Wenxin Du, Randall Kroszner, and Raghuram Rajan said Tuesday at a University of Chicago Booth School of Business event - Bloomberg. 

If the U.S. is heading into a recession, it could show up in the biggest banks’ financial results as they have been setting aside money in recent quarters to cover potential losses on their loans if the economy weakens and may have added more to their coffers in the final months of the year – WSJ 

Company Specific: 

Bed Bath & Beyond said it plans more layoffs and cost cuts after the home-goods retailer’s cash pile and sales dwindled in the most recent period - WSJ. 

Apple is planning to start using its own custom displays in mobile devices as early as 2024, an effort to reduce its reliance on technology partners like Samsung and LG and bring more components in-house, Bloomberg News reports – Bloomberg 

Chinese e-commerce giant Alibaba Group has signed a cooperation agreement with the government of Hangzhou, the city where the company is headquartered, local media reported on Tuesday - Reuters.

Coinbase Global said that it would eliminatearound 20% of its staff and enact broad cost cuts, the latest sign of pain in the cryptocurrency industry – WSJ.  

Wells Fargo announced a “new strategic direction” for a mortgage empire that was once the largest in U.S. banking, saying it will stop funding home loans arranged by outsiders and shrink the portfolio of debts that it services – Bloomberg.