10 Things You Need To Know: January 18, 2023
Key data releases this week include: retail sales (Wed), PPI (Wed), industrial production (Wed), NAHB Housing Market Index (Wed), Beige Book (Wed), housing starts (Thu), and existing home sales (Fri).
Bloomberg
January 12, 2023
The overall consumer price index fell 0.1% from the prior month, with cheaper energy costs fueling the first decline in 2 1/2 years. The measure was up 6.5% from a year earlier, the lowest since October 2021. Excluding food and energy, the so-called core CPI rose 0.3% last month and was up 5.7% from a year earlier, the slowest pace since December 2021.
Trading Economics
January 13, 2023
The University of Michigan consumer sentiment for the US rose to 64.6 in January of 2023 from 59.7 in December, the highest since April and beating market forecasts of 60.5, preliminary estimates showed. Both current conditions (68.6 vs 59.4) and expectations (62 vs 59.9) improved to their highest since April.
Oxford Economics
January 10, 2023
The eurozone economy is expected to experience a shallow recession this winter rather than a sharp downturn. The combination of favorable weather, effective policy action, and behavioral shifts by industry and consumers means the energy situation in Europe is much more positive than feared. The flipside of the better outlook is that it will likely lead to more interest rate increases from the European Central Bank despite signs that inflation is about to start falling sharply.
Capital Econ.
January 12, 2023
Disruption from China’s reopening is fading faster than we had expected and we have revised up our forecast for growth there from 2.0% to 5.5%. This means that global GDP growth will be stronger than we had expected this year and energy inflation will be a bit higher. But we still think that the major advanced economies are heading into recession and inflation will fall sharply.
FT
January 15, 2023
Investors are closely watching the Bank of Japan’s policy meeting this week, after policymakers surprised markets last month with adjustments to the central bank’s yield-curve controls. That change, which could set the BoJ up for more dramatic moves away from its historic ultra-loose monetary policy, comes ahead of Governor Haruhiko Kuroda’s planned departure in April.
Barron’s
January 16, 2023
Inflation, while slowing, is still here, though it might not be for much longer. Signs of looming price declines are starting to show up. Take apartments, which about 40 million Americans call home. Real estate service provider RealPage notes that demand had “all but evaporated” by the end of 2022. “Volume always precedes price,” says one real estate investor, and he’s right. Rents will have to fall to get people thinking about moving again.
The Wall Street Journal, The AP
January 10, 2023
The World Bank is now predicting global growth of just 1.7% in 2023, down from a previous estimate of 3%, and warned that the global economy will move “perilously close” to recession. In the US, GDP will likely rise 0.5%, the World Bank said.
Capital Economics
January 17, 2023
Housing downturns are well underway in many countries and house prices and activity generally have further to fall. Construction activity is already suffering as a result. While it is hard to detect any major adverse effect on household spending, this probably just reflects time lags. We continue to think that weak housing markets will contribute to the recessions that we expect in most major DMs this year.
Bloomberg
January 13, 2023
Loans to junk-rated companies have been getting downgraded at one of the fastest paces in recent months since at least 2011, Citigroup Inc. strategists Michael Anderson and Steph Choe wrote in a note this week. Bond grading firms are cutting credit ratings as factors like higher borrowing and labor costs strain companies’ finances, the strategists wrote.