A FED Celebration?🎉
- The FED may consider reducing the rate of rate increases by February and possibly pausing them altogether by March, depending on the inflation reading.
- Due to a drop in US consumer prices, gold rose above $1,900 an ounce for the first time since May, giving the Federal Reserve more room to scale back its interest-rate increases.
Cautious Optimism For The Earnings Season
- The US earnings season will begin today with four major banks: Citi, JPMorgan, Bank of America, and Wells Fargo.
- Investors will be keenly monitoring how these institutions describe their view for 2023 because this could signify that the financial sector is about to experience a downturn. However, despite the anticipation, the focus will likely be on the bank's quarterly earnings.
Inflation softening puts Fed on track for gradual increases
- The Consumer Price Index (CPI) decreased by 0.1% in December, the most since April 2020. Core CPI increased by 0.3%, with food and energy excluded.
- The headline and core CPI grew yearly by a combined 6.5%. The primary factor that reduced inflation was a dramatic decline in gasoline costs.
- Supply chains have improved, core reasonable prices have dropped, and market rent forecasts indicate that the inflationary pressure on housing is expected to abate shortly.
Source: investing.com
Wells Fargo Falls
- After being slammed with multibillion-dollar fines, Wells Fargo announced profits plummeted by half in the fourth quarter of 2022, a lower decline than analysts had predicted.
- In the three months ending in December, the net income of the fourth-largest bank in the US by assets decreased to $2.9 billion, including $3.3 billion in operating losses mostly attributable to "litigation, regulatory, and customer remediation concerns."
- Wells Fargo was fined $1.7 billion and forced to pay $2 billion in compensation to consumers by the Consumer Financial Protection Bureau in December for mismanaging mortgages, auto loans, and bank accounts.
- $WFC is in red in pre-market hours.
Source: Yahoo Finance
Other News
- A 2-month high was reached by bitcoin, which crossed the $19k mark. Investors are placing bets on a slowdown in US inflation and report that FTX's lawyers have discovered assets worth billions of dollars.
- Larry Fink, the chair and CEO of BlackRock, has issued a warning that "negative markets had a severe impact" on the company's financial results, affecting its revenues and profitability.
- To increase demand for its electric vehicles in the face of a slowing economy and more intense competition from established brands, $TSLA has lowered prices by up to a fifth across the US and Europe.
- Records revealed that China had purchased golden shares with special rights in two domestic subsidiaries of digital giant $BABA as Beijing continues to push for tighter control over online content.
Source: Yahoo Finance