PPI input +3.6% q/q
- prior 1.1%
PPI output +2.6% q/q
- prior 1.4%
more to come
Articles
Australian jobs market report coming up Thursday 19 May 2022 – growth in jobs expected
228184 May 19, 2022 06:33 Forexlive Latest News Market News
The report is due at 0130GMT.
This
snapshot (below) is from the ForexLive economic data calendar, access
it here.
- The
numbers in the right-most column are the ‘prior’ (previous month)
result. - The
number in the column next to that, where is a number, is the
consensus median expected.
Westpac are looking for a below-consensus headline result:
- Given that weekly payrolls suggest weather and holiday events dampened jobs growth in April, Westpac anticipates employment to lift by 20k for the month.
- The participation rate holding flat at 66.4% should see unemployment rate move downwards (Westpac f/c: 3.9%).
Canada says China has lifted its restrictions on Canadian canola (after 3 year ban)
228183 May 19, 2022 06:26 Forexlive Latest News Market News
The Canadian government has announced that China has lifted its restrictions on Canadian canola.
The ban had been in place for around 3 years – a three-year-old trade dispute. Market access for two Canadian canola companies has been reinstated.
Info via Canadian media reporting.
Full Article
JPMorgan has cut its US GDP estimates for both 2022 and 2023
228179 May 19, 2022 06:17 Forexlive Latest News Market News
The narrative has shifted for equity market losses, from at first being about rising interest rates and tightening financial conditions, to now being also about growth/earnings worries as inflation erodes spending power and profits.
This via Reuters with updated JPM forecasts showing slower growth expected ahead:
- H2 GDP 2.4% (from 3%)
- H1 2023 1.5% (from 2.1%)
- H2 2023 1% (from 1.4%)
JPM say there may be enough of a growth slowdown to lead to a gradual increase in the unemployment rate later in 2023, this will alleviate some of the wage pressures that have been building.
“In short, we forecast a soft landing, but are well aware that this outcome has rarely (if ever) occurred,”
SPX (weekly candles):
Deutsche Bank says S&P500 to 3650, then as high as 4800 by the end of this year
228177 May 19, 2022 06:09 Forexlive Latest News Market News
Deutsche Bank with their latest SP500 forecast, says it’ll fall to 3,650
- this would be a 24% decline, which is an average recession decline
DB citing:
- growth is slowing
- thus earnings-led declines for stocks, valuations are vulnerable
DB says that if the labour market can hold up and growth is not hit too hard then they see a year-end rally to 4,700 / 4,800
Weekly S&P500 candles:
TD says the strength of the USD to persist this quarter, and maybe beyond
228172 May 19, 2022 05:45 Forexlive Latest News Market News
For
bank trade ideas, check
out eFX Plus.
TD maintains a bullish bias on the USD through Q2
- “The market has quickly shifted from Fed hikes to global recession fears. The surprise rests on the shift in correlations, raising the question of how much stress has been priced in.
- USD strength should persist through Q2 (and perhaps a bit longer), yet we also note the recent decoupling with many global factors,”
- “The USD offers nice hedging properties for global investors, especially as markets have started to climb the wall of worry again,”
—
(ps. The wall of worry came out the winner on Wednesday US time)
Full Article
Wells Fargo says “a mild recession our base case “
228171 May 19, 2022 05:17 Forexlive Latest News Market News
Via a Wells Fargo note issued Wednesday (US time):
- “Based on economic data trends we have been tracking, we believe the economy is now beginning to cross over a probability level that makes a mild recession our base case for the end of 2022 and early 2023, and we are continuing to shift out equity sector guidance and allocations to more defensive positioning,”
Wells Fargo revised their year-end GDP target for 2022 to 1.5% (down from 2.2%)
- and -0.5% for 2023 (from 0.4%)
ICYMI: Goldman Sachs cut its forecast for China economic growth citing zero covid
228167 May 19, 2022 04:56 Forexlive Latest News Market News
Goldman Sachs has cut its forecast for 2022 China GDP to 4% from 4.5% y/y
- & has cut the Q2 estimate to 1.5% y/y (from 4%)
Goldman Sachs says it assumes:
- Full-year growth is based on the assumption that Covid will remain mostly under control
- that the property market improves
- the government boosts infrastructure spending
The Chinese government’s forecast for GDP growth this year is ‘around 5.5%’
- to get close GS says “it is imperative to keep Covid under control and avoid hard lockdowns of major economic centres like Shanghai going forward”
ps. Love this from GS a little further on in the note. The economists at GS say the government could hit its growth target if it uses “statistical smoothing.”
- revisions to previous years’ GDP or “deviations of current year’s GDP growth from alternative measures of economic activity can sometimes take place in difficult growth years,”
—
This is worth a shot. The next time you come home drunk tell your wife you are not drunk when its ‘statistically smoothed’.
(please excuse my gender specificity, I’ll go stand in the naughty corner for a while)
Full Article
Economic calendar due from Asia – Australian jobs report
228164 May 19, 2022 04:45 Forexlive Latest News Market News
Its a busy economic calendar coming up on Thursday 19 May 2022 from Asia. New Zealand budget and the Australian labour market report are the focus.
From Australia yesterday we had wages data for Q1. This came in under the central estimate and had led to expectations of a 40bp cash rate hike from the Reserve Bank of Australia at their next meeting (June 7) being trimmed back.
- Australian wages index for Q1 2022: 0.7% q/q (vs. expected 0.8%)
- ANZ forecasts a 25bp cash rate hike from the Reserve Bank of Australia in June
While ANZ is looking for 25bps some analysts are sticking with their call for 40bps (JP Morgan, for example).
This
snapshot from the ForexLive economic data calendar, access
it here.
The
times in the left-most column are GMT.
The
numbers in the right-most column are the ‘prior’ (previous month)
result.
The
number in the column next to that, where is a number, is the
consensus median expected.
US stocks close near session lows and another horrible day to the downside
228152 May 19, 2022 04:17 Forexlive Latest News Market News
The major US indices are all closing sharply lower as concerns about the economy and inflation way on values.
Target announced earnings before the open and they came in much weaker than expected as higher costs are starting to eat into the margins. The stock is ending the day down $53.55 or -24.87%. Ouch.
If transportation/employee costs are hurting Target, a company like Amazon must be really feeling the pinch. It’s shares are down $-164 today or -7.12%.
A look at the final numbers are showing:
- Dow industrial average down -1164.52 points or -3.57% at 31490.06
- S&P index down -165.17 points or 4.04% at 3923.67
- NASDAQ down -566.36 points or -4.73% at 11418.16
- Russell 2000 down -65.45 points or -3.56% at 1774.84.
None of the Dow 30 stocks closed positive on the day:
- Walgreens, -8.39%
- Coca-Cola, -6.95%
- Walmart, -6.84%
- Procter & Gamble, -6.15%
- Nike, -5.7%
Verizon was the best performer at -0.14%
Other big losers on the day included:
- Target, -24.87%
- Dollar Tree, -14.42%
- Costco, -12.45%
- Chewy, -11.93%
- Game Stop -8.94%
- DoorDash -8.17%
- AirBNB -8.06%
- FedEx -8.01%
- LYFT, -7.96%
- Snap, -7.42%
- Amazon, -7.16%
After the close, Cisco Systems announce their earnings and revenues for the current quarter. Earnings-per-share came in at $0.87 vs. 86% estimate. Revenues came in at $12.84 billion which was lower than the $13.34 billion estimate. The stock is trading down over 11% in after-hours trading.
“When sorrows come, they come not single spies, but in battalions” – Claudius in Hamlet
Full Article
Fed’s Harker also saying he expects 50bp Federal Reserve rate hikes in June and July
228150 May 19, 2022 04:05 Forexlive Latest News Market News
Patrick Harker, president and CEO of the Federal Reserve Bank of Philadelphia
- I expect 50 bps rate
hikes in June and July -
after that I anticipate a sequence of ‘measured’ rate hikes until we
are confident inflation is moving toward 2% - sees 3% US. GDP
growth this year, job market tight through 2022 - inflation is a
scourge, and an urgent problem - elevated energy
prices could be with us for a while
more to come
50bps at the next two meetings is being repeated by many Fed officials.
