Stansberry Research

Thursday Morning Market Headlines

C. Scott GarlissStansberry NewsWire

Five Stories Moving the Market:

Fed’s Beige Book says businesses expect weak growth in months ahead – WSJ. U.S. economic activity was relatively flat at the start of the year and businesses are pessimistic about growth in the months ahead, the Federal Reserve said in a Wednesday report.

Fed’s Mester says rate hikes have begun to quell U.S. inflation – AP News. Growing evidence that high inflation is finally easing shows that the Federal Reserve’s sharp interest rate hikes are working as intended, says Loretta Mester, a key Fed policymaker.

Fed's Bullard urges colleagues not to "stall" on remaining rate increases – Reuters. St. Louis Fed President James Bullard said Wednesday that U.S. Federal Reserve policymakers should get the policy rate of interest above 5% "as quickly as we can" before pausing rate increases needed to battle an ongoing outbreak of inflation.

U.S. Treasury Yellen, China's Liu agree to enhance communication after 'frank exchange' – Reuters. U.S. Treasury Secretary Janet Yellen agreed with Chinese Vice Premier Liu He to enhance communication about macroeconomic and financial issues during a "candid, substantive, and constructive" meeting in Zurich on Wednesday, the Treasury said.

In Davos, leaders fret over fragmenting global economy – WSJ. Geopolitical rivalry, technology decoupling, and protectionism have increasingly altered the world’s business and political landscape, adding new risks and threats and, for some, opportunity, say executives and officials meeting this week at the World Economic Forum.

Market Headlines:

Global Macro:

Bank of Finland Governor Olli Rehn said the European Central Bank should continue to significantly tighten monetary policy at least through the spring and winter to keep inflation expectations under control – Helsingin Sanomat.

German Finance Minister Christian Lindner said the country has completely diversified its energy infrastructure since Russia's invasion of Ukraine last year – BBC.

President Vladimir Putin said on Wednesday that Russia's powerful military-industrial complex was ramping up production and was one of the main reasons why his country would prevail in Ukraine – Reuters.

India’s economy picked up speed in December as business conditions improved, marking a rebound for the South Asian nation that had shown signs of a slowdown the preceding month – Bloomberg.

U.S. Treasuries held by foreigners rose in November for the first time in three months, data from the U.S. Treasury department showed on Wednesday, as the decline in yields enhanced the allure of government debt for investors – Reuters.

An upswing in tourism from China’s reopening will help boost Thailand’s economy but it won't be sufficient enough to restore growth to pre-pandemic levels just yet, according to analysts – Bloomberg.

The producer-price index, which generally reflects supply conditions in the economy, rose 6.2% in December from a year earlier, the Labor Department said Wednesday, the slowest annual pace since March 2021 - WSJ.

Big U.S. technology firms are expected to whittle away at their bloated workforce and costs through the next few months, to buttress margins and appease investor concerns at a time of slowing sales growth, reversing pandemic-era excesses, analysts said - Reuters.

Oaktree Capital Group co-founder Howard Marks, a closely watched investor in high-yield debt, says the rally in junk bonds can’t last as default rates need to return to a more normal rate of 4% compared to the current 2% - Bloomberg.

The average interest rate on the most popular U.S. home loan dropped to its lowest level since September as more evidence inflation is past its peak sent Treasury yields lower, data from the Mortgage Bankers Association (MBA) showed on Wednesday - Reuters.

Retail spending fell in December at the sharpest pace of 2022, marking a dismal end to the holiday shopping season as rising interest rates, still-high inflation, and concerns about a slowing economy pinched American consumers - WSJ.

Confidence among U.S. single-family homebuilders improved for the first time in more than a year in January, potentially signaling the housing slump may have reached its low point even as construction firms' sentiment remains decidedly bearish - Reuters.

Company Specific:

Apple is working on a slate of devices aimed at challenging Amazon.com and Google in the smart-home market, including new displays and a faster TV set-top box, after relaunching its larger HomePod speaker - Bloomberg.

Microsoft said Wednesday it plans to eliminate 10,000 jobs in response to the global economic slowdown, the company’s largest layoffs in more than eight years and the latest in a string of cuts from big technology companies - WSJ.

Cryptocurrency lender Genesis Global Capital is planning to file for bankruptcy as soon as this week, Bloomberg News reported on Wednesday, citing people with knowledge of the situation – Reuters.