All Is Calm Ahead Of The Federal Reserve This Afternoon

Good Morning Everyone!

Remember, today at 2pm, a group of middle-aged financial experts determines whether or not millions of Robinhood traders get margin called.

 

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Prices as of 4 pm EST, 11/1/22; % YTD

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MARKET UPDATE

2 p.m. Fed Reserve Rate decision

• Volatility is relatively LOW heading into the Fed Meeting

• 4th straight rate hike of 75 basis points expected

• More important: messaging on how the Fed proceeds from here

• 2:30 p.m. Powell press conference

• Will Powell say: we are not done

• Powell can’t be happy about the spectacular rally in the DOW in October / this is not what Powell wants

China orders a 7-day lockdown of iPhone City (Foxconn’s main plant in Zhengzhou)

• Foxconn had a Covid flare-up that forced 200,000 staff into quarantine

• Lockdown will last until November 9

• The abrupt action reflects Beijing’s Covid Zero approach

• Apple AAPL pre-market is down 1%

Russia

• said it would resume participation in the Ukrainian grain deal

• Wheat down 6%, Corn down 2%

Crude 88 flat

• API Crude and product inventories out last night had little impact on Crude

• Fed Day is more important

Maersk container vessels

• A bellwether for global trade

• Believes global demand will shrink by 4% in 2022 and will be down in 2023

Amazon AMZN hit a new year-to-date low yesterday

• Amazon paused hiring in their Ad business

• Any cost cutting measures will be viewed positive by investors

Autos

• U.S. supply 32 days 18 month high

• U.S. SAAR 15.3 million units 17 month high

• Incentives were down 47% year-over-year but up 2.7% month-over-month

• Inventory days supply is 32 days vs. 30 days last month and 23 days last year

• Mix remains strong favouring trucks: Car vs. light truck mix at 21% / 79%

Opioid Settlement

• Final settlement positive for pharmacies

• $12-13.8 billion for the big three retail pharmacies

• $21 billion announced in 2021 for the big 3 distributors

• CVS CVS + 2%

• Walgreens Boots Alliance WBA +2%

• Walmart WMT flat

Earnings

• Advanced Micro Devices AMD

• Mondelez MDLZ

• Airbnb ABNB beat but guide below street

• McKesson MCK

• Public Storage PSA

• Devon Energy DVN Earnings and FCF beat, capex below consensus

• AIG AIG EPS beat

• Prudential PRU EPS beat

• Energy Transfer ET

• CVS Health CVS agreed to pay $5 billion to settle opioid lawsuits

• Estee Lauder EL -8%, guide down to 2023

• Progressive Insurance PGR

• Humana HUM

CRYPTO UPDATE

International regulation

• G-20 will prioritize crypto regulation

  • Third objective of India’s G-20 presidency

  • Year-long presidency

  • Takes over starting in December

• Hong Kong warming up to crypto

  • Exploring giving access to retail crypto trading and ETFs

  • Considering range of pro-crypto measures

  • Mainland China much more strict

    • Blanket ban on all crypto in September 2021

Recent crypto trademark filings

• Visa V

• PayPal PYPL

• Western Union WU

• Viking Cruises

• Ulta ULTA

• Del Monte FDP

• Kraft KHC

• Inn-N-Out

• Takis

• Moët Hennessy

• Formula One

• DraftKing DKNG