FED - Approaching An Inflection Point
Jan 21st 2023, 11:15 am
|The Street Brief
A Bumpy Ride
- Investors are experiencing choppy trading on Thursday following the release of US inflation statistics. However, following Powell's statement that there were no indications regarding the rating outlook, stocks increased.
- The major large-cap indexes climbed again yesterday, indicating that the market bulls are still in charge. To begin the year, all three significant cap indices are up, which traditionally has been a favorable omen for the entire year.
- The bond market is trading ten days into the new year as though the inflation prediction for the US in 2023 is a settled argument: the market has concluded that inflation will be back at 2% by year's end. Moreover, the one-year US inflation swap is trading at 2% with no uncertainty premium, suggesting that the market is very confident in this estimate.
- The journey won't be easy, though; that much is true. The December CPI, which will be released tomorrow at 8:30 am Eastern time, is anticipated by Wall Street. If it drops further, the Fed will be much closer to pausing or pivoting, which may ignite the stock market. Both of those will be employed by Wall Street.
- Additionally, US Treasury bond yields were uneven as both short-term and long-term rates increased. The yield curve is still significantly inverted, which may signal an impending recession. As demand for options protection decreased, the Chicago Board Options Exchange Volatility Index, or VIX, dropped precipitously.
Bed Bath & Beyond Stock Surges
- Amid acquisition rumors and the announcement of third-quarter financial results for the fiscal year 2022, shares of Bed Bath & Beyond's $BBBY rose higher.
- The company issued a going concern warning earlier this month, which caused shares of BBBY stock to drop sharply.
- Bed Bath & Beyond declared that the company would look into every option to get back to being a going concern, including debt restructuring, scaling back operations, raising more debt or equity capital, selling assets, and other actions.
- Popular among retail traders, they increased in early trading on Wednesday, continuing their recovery from multi-decade lows recorded last week due to the company's intentions to file for bankruptcy.
Source: Yahoo Finance
- In the news about commodities, oil prices remained stable primarily as concerns about an impending recession in the United States were offset by better demand projections due to China's economy being reopened.
- Employees from Twitter in the UK who were let go when Elon Musk took over believe the terminations were illegal and came with unfair severance packages. This is the latest labor-related issue to plague the business magnate.
- As China reopens its sizable economy, copper and iron ore prices are rising; on Wednesday, benchmark copper prices surpassed $9,000 a tonne for the first time since June.
- As UBS expressed worries about the effect of Amazon's $AMZN Buy with Prime offering on its seller base, Shopify $SHOP stock fell on Tuesday.
Source: Yahoo Finance