Stansberry Research

Wednesday Morning Market Headlines

C. Scott GarlissStansberry NewsWire

Five Stories Moving the Market:

Microsoft's cloud business keeps profits flowing in tougher times – Reuters. Microsoft posted results on Tuesday that showed some strength in the face of a weak economy, buttressed by a cloud business that hit Wall Street targets for the end of 2022, but it may miss expectations in the current quarter.

Bank of Canada eyes final interest-rate hike before a likely pause Bloomberg. The Bank of Canada led its peers into a succession of outsized interest-rate hikes last year and now may be the first to stop raising, although doing so presents a communications challenge for Governor Tiff Macklem.

ECB's Panetta pushes back on March rate-hike commitment Reuters. The European Central Bank should not commit to any specific rate hike beyond February, especially since there is reason for cautious optimism about inflation, ECB board member Fabio Panetta told German newspaper Handelsblatt, exposing a rift among policymakers.

DOJ sues Google, seeking to break up online advertising business – WSJ. The Justice Department is seeking the breakup of Google’s business brokering digital advertising across much of the internet, a major expansion of the legal challenges the company faces to its business in the U.S. and abroad.

U.S. business activity shrinks for a seventh month – Bloomberg. The S&P Global preliminary January composite purchasing managers' index showed U.S. business activity contracted for a seventh month, though at a more moderate pace, while a measure of input prices firmed in a sign of lingering inflationary pressures.

Market Headlines:

Global Macro:

Australian inflation accelerated to the fastest pace in 32 years in the final three months of 2022, exceeding forecasts and prompting money markets to price in an interest-rate hike at next month’s central bank meeting - Bloomberg.

New Zealand's consumer inflation held near three-decade highs last quarter but came in below the central bank's forecast, prompting some analysts to bet that cash rate increases over the coming months might be less aggressive than previously thought - Reuters.

Contrarian investor Jeremy Grantham, the co-founder and long-term investment strategist of Grantham Mayo van Otterloo, warned the popping of the bubble in U.S. stocks is far from over and investors shouldn't get too excited about a strong start to the year for the market, saying the S&P 500 Index could lose 17% – Bloomberg.

In the last five months of 2022, employers cut 110,800 temporary workers, including 35,000 in December, the largest monthly drop since early 2021, in a sign that broader job losses could be on the horizon – WSJ.

With the Federal Reserve’s February 1 interest-rate decision a week away, traders in the options market are contemplating a scenario in which the rate hike it’s expected to deliver ends up being the last one of the tightening cycle - Bloomberg.

Americans are cutting back on many everyday purchases amid inflation while splurging on a few big-ticket items... think shopping for staples at the dollar store dressed in Gucci sneakers – WSJ.

Hedge funds are warming up to bets on a steeper Treasuries yield curve as the end of the current Federal Reserve rate hiking cycle draws closer - Bloomberg.

Company Specific:

As Boeing battles disruption in its supply chains, investors will be looking for the largest U.S. plane maker to satisfy questions about its planned ramp-up for commercial jets and set aside concerns over losses in major defense projects when it reports earnings Wednesday - Reuters.

Walmart Inc., the largest private-sector employer in the U.S., is raising its starting wage by 17% after a surge in inflation last year and heightened competition for workers - Bloomberg.

Amazon is launching a new benefit for Prime members that offers unlimited access to commonly prescribed generic medications for $5 a month. The subscription service, called RxPass, became available on Tuesday in most U.S. states through the company's online pharmacy service – WSJ.

Advertising spending on Twitter dropped by 71% in December, data from an advertising research firm showed, as top advertisers slashed their spending on the social media platform after Elon Musk's takeover - Reuters.

3M is cutting about 2,500 global manufacturing jobs as demand for its products rapidly softened toward the end of the year – WSJ.

Rupert Murdoch on Tuesday withdrew a proposal to reunite News Corp and Fox as the company is also exploring a sale of Move, which operates the Realtor.com website, to CoStar Group, according to a regulatory filing and sources familiar with the process - Reuters.