Macro Week - Monday Market Update

Good Morning Everyone!

Big week of data: CPI tomorrow, FED rate decision Wednesday, retail sales, jobless claims, regional and national manufacturing, and industrial production Thursday and PMIs Friday. Buckle up!

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Prices as of 4 pm EST, 12/9/22; % YTD

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MARKET UPDATE

This week

• Tuesday CPI

• Wednesday FOMC meeting

• Thursday Retail sales

• Friday PMI

What do we expect from Powell?

• Wednesday Fed Funds rate from 4% to 4.5%

• 2023 4.5% to 5%, then on hold

Crude 71.80 +0.5%

• Higher this morning as we got more China Covid rule changes over the weekend

• Putin said that Russia has a production agreement with other OPEC+ members, so a drastic move to cut production is only a possibility

• The short position for Brent and WTI hit an 11 month high

Microsoft MSFT

• Buying 4% stake in London Stock Exchange Group

• In exchange, Microsoft gets a 10-year partnership for cloud-computing services

• Thomson Reuters (listed in Canada) getting US$ 1 billion in gross proceeds

Coupa Software COUP

• Thoma Bravo and a minority investor buying COUP for $81 cash

• 9.5 times next-12-months EV/sales

Weber WEBR

• Being taken private by their largest shareholder, BDT Capital Partners

Brookfield Asset Management BAM

• Officially completed separation of their asset manager

• BN Brookfield Corp, asset management, insurance solutions, operating businesses, A3 Moody’s bond rating

• BAM 25% interest in their asset management business

Earnings              

• Coupa Software COUP

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CRYPTO UPDATE

Uniswap “fee switch” vote this week

• Fee switch goal = increase trading volume, liquidity, and sustainability

• Would implement 10% fee

• Additional fees accrued by Treasury, not distributed

• Uniswap UNI/USD is largest DEX by fees

Neon Labs mainnet launch

• First Ethereum ETH/USD Virtual Machine (EVM) for Solana

• Goes live today

• Will allow Ethereum apps to build on Solana SOL/USD

Investors taking record levels of crypto off exchanges

• November: 91,363 Bitcoin pulled off exchanges

  • ~$1.5 billion

• Largest Bitcoin BTC/USD ouflow on record

• October: 75,294 Bitcoin withdrawn

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MEME OF THE DAY

Elon Musk: If the FED raises rates again next week, the recession will be greatly amplified

Jerome Powell: pic.twitter.com/wEcWWr8KqU

— Genevieve Roch-Decter, CFA (@GRDecter) December 9, 2022