Inflation Up, Jobless Claims Down

Good Morning Everyone!

Berkshire Hathaway’s Charlie Munger was asked about long-term valuations: “I don't worry about it too much, because I will be dead."

At least he’s being honest.

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Prices as of 4 pm EST, 2/15/23; % YTD

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MARKET UPDATE

Retail sales

• +3% vs. 1.8% expected

• All categories showed growth MoM and YoY

• Restaurants and bars +7.2% MoM, +24% YoY

  • Rotation from goods to services still underway

• Data says: consumer still strong

Industrial & Manufacturing production

• Industrial production unch MoM

  • +0.8% YoY

  • Slowest growth since February 2021

  • -9.9% monthly drop in Utilities (chart below)

    • Largest drop ever

• Manufacturing production +1% MoM

  • Best print since February 2022

Homebuilder sentiment

• Rose by 7 points (most since mid-2020)

• At 5-month high

• Sales expectations jumped to highest since July

• Optimism over prospective buyer traffic

Today's data:

• 8:30:

  • PPI MoM: 0.7% vs. 0.4% est

    • Biggest gain in 7 months

    • Largest increase in goods (+1.2%) since June

      • +6.2% surge in gasoline cost

  • Core PPI MoM: 0.5% vs. 0.3% est

  • Building Permits MoM: +0.1% (prev -1%)

  • Housing Starts MoM: -4.5% (prev -3.4%)

  • Initial Jobless Claims: 194k vs. 200k est

    • Remains close to 9-month low from January

    • Labor market: still tight

  • Philly Fed Manufacturing: -24.3 vs. -7.4 est

    • Lowest reading since May 2020

    • 6th straight month of contraction

• Fed talk

  • 8:45 - Mester

  • 1:30 - Bullard

  • 4:00 - Cook

  • 6:00 - Mester

Crude 

• IEA lifts oil demand by 2 mbpd in 2023

  • China makes up 900k bpd

• Record 101.9 mpbd

  • +100k bpd from prev forecast

Tesla TSLA

• Autopilot workers announced unionization campaign Tuesday

  • Yesterday Tesla fired dozens of them

• Charlie Munger on Tesla/BYD (Chinese competitor):

  • “BYD is so much ahead of Tesla in China ... it’s almost ridiculous”

Cisco Systems CSCO

• Beat top & bottom lines

• Demand for tech infrastructure stronger than expected

• Highest sales forecast in years

  • +9.8% for 2023

Zillow Z

• Beat top & bottom lines

• Driven by core advertising

• Developing “super app” for housing

• Partnering with Opendoor OPEN to reach home sellers

Earnings

• Hasbro HAS

• Datadog DDOG

• Crox CROX

• DraftKings DKNG

• Paramount Global PARA

• Cenovus Energy CVE

• PBF Energy PBF

• NRG Energy NRG

• Watsco WSO

• Hyatt Hotels H

• Pool Corp POOL

• Southern Company SO

• Zebra Tech ZBRA

• EPAM Systems EPAM

• Reliance Steel RS

CRYPTO UPDATE

Bitcoin BTC/USD hits 6-month high

• Highest since August

• Closing in on $25,000

• +11% last 24 hours

• Squeeze? Short-sellers closed out $64.5 million in bets yesterday

Court reveals identities of SBF guarantors

• Check out thread for details:

The two people who paid the former FTX CEO’s bail are:

Larry Kramer (left) - former dean of Stanford Law School.

Andreas Paepcke (right) - a Senior Research Scientist at Stanford. pic.twitter.com/ZnPB9n95x9

— Genevieve Roch-Decter, CFA (@GRDecter) February 15, 2023