Observations + Charts
From the macro perspective, it’s boring again, with investors waiting for the next round of major events (which don’t arrive until next week). China’s CPI/PPI data didn’t deviate too much from street exp (there’s a lot of “China falls back into deflation territory” headlines, but investors expected that to happen). The CQ3 earnings season is just about over, with the last round of results coming in. Disney was decent thanks to aggressive cost cutting and the company’s bullish FCF forecast for F24 provided relief to nervous media investors (the end of the actor’s strike is another source of relief), but the whole industry is still facing enormous secular challenges (and as WBD showed enormous secular challenges and bloated balance sheets don’t make for an optimal combination). Tech earnings were mixed, with some underwhelming releases (including ARM’s inaugural print as a public firm) but a few bullish ones too (including APP and TWLO). MODG was the big blow-up in consumer as its TopGolf unit encounters pressure while the beleaguered payments industry received some good (or rather, “no worse than feared”) news from Adyen and Nexi.
On the calendar, investors will be watching the weekly claims figures for any evidence of a further easing in US labor conditions while the 30-year auction at 1pmET is important too (so far, the auctions this week have been OK, providing additional release to Treasuries). A bunch of Fed officials will be speaking (including Powell at ~2pmET) and investors should expect a similar message from all of them (that message can be summarized as: “we’re patient for now, can’t rule out further hikes completely, definitely not cutting or touching QT, and while progress is happening, there’s still a lot of work to do before inflation is sustainably back to target”). At the present time, markets are paying a lot more attention to data than Fed rhetoric (and the next major piece of data doesn’t arrive until Tues w/the US CPI). Yellen begins two days of meetings in San Francisco today with her Chinese counterpart (this comes ahead of the Biden-Xi summit scheduled for next week on the sidelines of APEC).