10 Things You Need To Know: December 20, 2022
Key data releases this week include: NAHB Housing Market Index (Mon), housing starts (Tue), existing home sales (Wed), consumer confidence (Wed), Q3 GDP revision (Thu), leading economic indicators (Thu), personal income and spending (Fri), durable goods orders (Fri), consumer sentiment (Fri), new home sales (Fri), and PCE Deflator (Fri).
Bloomberg
December 13, 2022
Excluding food and energy, the consumer price index rose 0.2% in November and was up 6% from a year earlier, according to a Labor Department report. Economists see the gauge — known as the core CPI — as a better indicator of underlying inflation than the headline measure. The overall CPI increased 0.1% from the prior month and was up 7.1% from a year earlier, as lower energy prices helped offset rising food costs.
Bloomberg
December 15, 2022
The value of overall retail purchases dropped 0.6% last month after rising 1.3% in October, Commerce Department data showed. Excluding gasoline and autos, retail sales were down 0.2%. The figures aren’t adjusted for inflation. The median estimate in a survey of economists called for a 0.2% decline in total retail sales.
Barron’s
December 19, 2022
“Call it a soft landing, call it a rolling recession, a growth recession, whatever the case. It will be the most widely anticipated recession of all time,” says Ed Yardeni, president of Yardeni Research. “It could be the start of a return to the ‘old normal’ before the financial crisis, when we had inflation and interest rates of more like 3% to 4% and the economy growing around 2%.”
Barron’s
December 19, 2022
With economies around the globe slowing, energy demand is falling at a faster rate than analysts had expected. Oil is building up in storage tanks throughout the world at a time of year when inventories usually fall. China’s Covid plan remains a mystery. Meanwhile, Russia appears to have diverted most of its sanctioned oil to China and India. In fact, the net result of the sanctions on Russia could be bearish for oil, not the bullish disruption that analysts had predicted.
Barron’s
December 19, 2022
Stabilization for commodities is possible by the end of 2023 as global central banks decide to ease policy and China recovers. Until then, commodities will be faced with lower demand and tight financial conditions.
Barron’s
December 19, 2022
The NAR expects annual median home prices to tick up just 0.3% in 2023—following a 9.6% gain in 2022—to $385,800. “Half of the country may experience small price gains, while the other half may see slight price declines,” Yun added. “However, markets in California may be the exception, with San Francisco, for example, likely to register price drops of 10% to 15%. Existing-home sales, meanwhile, are expected to total 4.78 million, a 6.8% drop from this year’s 5.13 million transactions.
NYT
December 14, 2022
The Federal Reserve announced a 50-basis-point interest-rate hike, representing a slower pace of tightening after several 75-basis-point increases earlier in the year. However, policymakers indicated that more increases are still to come, and Fed Chair Jerome Powell noted that “it will take substantially more evidence to give confidence that inflation is on a sustained downward path.”
Bloomberg
December 14, 2022
Companies on the S&P 500 repurchased more than $200 billion in stock during the third quarter, about 25% less than the amount repurchased in late 2021 and in early 2022, with the decrease indicating cash conservation amid economic uncertainty. A continued decline of buybacks could increase headwinds for the S&P 500.
Bloomberg
December 16, 2022
Oaktree Capital Group LLC co-founder Howard Marks says investors should look to the junk-bond market rather than private credit for the best high-yield opportunities. “It’s not that that there’s anything wrong with private debt, it’s just that people won’t have to take the risk associated with private investing if they can get useful returns in the public markets and have liquidity and price transparency and things like that,” Marks said.