10 Things You Need to Know: June 13, 2023
Key data releases this week include: NFIB Small Business Optimism (Tue), CPI (Tue), PPI (Wed), FOMC rate decision (Wed), retail sales (Thu), industrial production (Thu), and consumer sentiment (Fri).
Bloomberg
June 8, 2023
US household net worth climbed in the first quarter by the most in over a year as a gain in the value of equity holdings offset a decline in real estate. Household net worth rose $3 trillion, or 2.1%, in the January-March period to $148.8 trillion after climbing $1.6 trillion in the prior quarter, a Federal Reserve report showed.
Financial Times
June 8, 2023
The eurozone economy contracted at a quarterly rate of 0.1% during each of the last two quarters, according to downgrades released on Thursday. The downgrades mark a slight technical recession, driven largely by the bloc’s energy crisis.
Reuters
June 9, 2023
China’s producer price index experienced its sharpest drop in May since 2016, falling 4.6% and surpassing predictions, as weakening demand and a sluggish manufacturing sector posed challenges to the country’s fragile economic rebound. China’s factories faced dwindling prices, reflecting reduced revenue from key overseas markets, and raising concerns of potential deflation risks, according to the National Bureau of Statistics.
Reuters
June 7, 2023
The Bank of Japan is unlikely to shift away from its negative-rates policy for at least a year as it seeks to maintain low borrowing costs, according to Yuichi Murao, CIO of equity at Nomura Asset Management. Murao says moving rates to positive territory at this time is probably “the last thing” the central bank would do.
Barron’s
June 12,
With economic growth proving resilient, the Fed nearing a pause, earnings set to reaccelerate, and the average stock ready to join the rally, it’s one that might have legs. “The notion that we’re in a bull market has become more compelling and harder to argue against,” says Yardeni Research’s Ed Yardeni.
Barron’s
June 12, 2023
Much of the drop in earnings forecasts may have happened already, with 2023 S&P 500 earnings-per-share estimates down almost 12% in the past year. That has started to stabilize, with EPS estimates up almost 1% in the past month. Now, analysts are penciling in earnings growth next year, with S&P 500 aggregate EPS expected to grow 12%, to $245, in 2024.
Capital Economics
June 9, 2023
We expect the Fed to leave interest rates unchanged at (this) week’s FOMC meeting but, in what could be characterized as a “hawkish skip”, to signal via forward guidance (updated SEP forecasts and language in the statement) that officials are minded to hike interest rates again, probably at the following meeting in late-July. We also anticipate that being the last rate hike in this cycle, although we now don’t expect the first rate cut to come until next year.
The Wall Street Journal
June 7, 2023
The US Treasury is expected to issue more than $1 trillion of debt to catch up on lost borrowing during the debt-ceiling impasse, but the price the government will pay creditors will depend on the profile of buyers, analysts say. Many bank analysts say money-market funds are poised to be big buyers of the new issuance, and JPMorgan analysts see roughly a quarter of it going to foreign investors.
Bloomberg
June 5, 2023
Russian crude oil flows to international markets are continuing without significant signs of the output cuts that the Kremlin insists the country is making. Shipments have increased since February, even though Moscow’s OPEC+ partners have sought transparency and reassessment of production levels, raising concerns about Russia’s compliance with agreed-upon cuts.