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Every Friday I recap “news you can use” from the week: a handful of quotes from major (and often expensive) news sources, so you can stay up to date on the news that affects your money without spending a dime and in less than a minute.
Here’s an overview of what happened this week.
Morgan Stanley Strategists Say Stocks Ignore Fed, Earnings Reality (Feb. 13, Bloomberg) US stocks are ripe for a selloff after prematurely pricing in a pause in Federal Reserve rate hikes, according to Morgan Stanley strategists.
“While the recent move higher in front-end rates is supportive of the notion that the Fed may remain restrictive for longer than appreciated, the equity market is refusing to accept this reality,” a team led by Michael Wilson wrote in a note.
There’s a new inflation warning for consumers coming from the supply chain (Feb. 13, CNBC) “In 2022, we saw rate levels for international air and ocean and domestic trucking fall back down to earth,” said Brian Bourke, global chief commercial officer at SEKO Logistics. “But inflationary pressures remain where demand outpaces supply in 2023, including in warehousing through most of the United States, domestic parcel and labor.”
The peak of this market rally is almost here, says JPMorgan. (Feb. 14, MarketWatch) Caution is the rule for our call of the day, from a team led by JPMorgan’s top strategist Marko Kolanovic, who say it’s time to stop buying U.S. stocks as investors overprice recent good news on inflation and remain “complacent of risks.”
“We believe that the equity rally is unlikely to get the fundamental confirmation for the next leg higher. Once positioning recovers, Q1 is in our view likely to mark the high point of the market.”
Inflation rose 0.5% in January, more than expected and up 6.4% from a year ago (Feb. 14, CNBC)
Inflation turned higher to start 2023, as rising shelter, gas and fuel prices took their toll on consumers, the Labor Department reported Tuesday.
The consumer price index, which measures a broad basket of common goods and services, rose 0.5% for the month, which translated to an annual gain of 6.4%. Economists surveyed by Dow Jones had been looking for respective increases of 0.4% and 6.2%.
Retail sales jump 3% in January, smashing expectations despite inflation increase (Feb. 15, CNBC)
Sales at retailers rose far more than expected in January as consumers persevered despite rising inflation pressures.
Advance retail sales for the month increased 3%, compared with expectations for a rise of 1.9%, the Commerce Department reported Wednesday.
Wholesale prices surge again, PPI shows, in sign inflation is unlikely to ease quickly (Feb. 16, MarketWatch) U.S. wholesale prices jumped 0.7% in January to mark the biggest gain since last summer, offering further proof that inflation is sticky and unlikely to decline rapidly.
Economists polled by The Wall Street Journal had forecast a 0.4% increase.
Jobless Claims Remained Nearly Steady Last Week (Feb. 16, Wall Street Journal) Worker filings for unemployment benefits held nearly steady last week and remained historically low, a sign of continued tightness in the labor market.
After hot economic data, the big question is whether the Fed will return to 50 basis point rate hikes (Feb. 17, Marketwatch) U.S. nonfarm payrolls employment surged by 517,000. Retail sales jumped by 3%. Consumer and producer prices did decelerate on a year-over-year basis, but not by as much as forecast. After the PPI data, economists at Goldman Sachs added another quarter-point rate hike to their forecasts, so that they now see 25 basis point hikes in March, May and June, which would take the fed funds rate between 5.25% and 5.5%.
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I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.
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