Final Week Of The Year

Good Morning Everyone!

Except Southwest Airlines, which canceled 2,500 flights yesterday and lost track of everyone's bags.

Their stock is down nearly 5% pre-market.

Prices as of 4 pm EST, 12/23/22; % YTD

MARKET UPDATE

4 trading days left in 2022

• Global stocks worst annual performance since 2008:

China lifts inbound travel restrictions

• Quarantine requirements to end January 8

• Ends nearly 3 years of zero-Covid policy

• Cases still high - winter outbreaks

Crude 79.9 +0.75%

• 3-week high on China easing

• Extreme weather in US → supply disruptions

  • Weather forecast to improve this week…rally killer?

4.4% = consumer 1-year inflation expectations (UMich)

• Lowest since June 2021

• Five-year expectations 2.9%

• Inflation uncertainty remains too high for comfort:

2.4% = Personal savings rate

• Consumers still have some pandemic cushion

+5.5% = PCE YoY

• +0.1% in November

• Lowest since July

• Sticky services:

-2.1% = Durable Goods Orders in November

• Biggest drop since April 2020 (Covid)

  • -0.6% expected

• Business investments rose unexpectedly

+5.8% = New home sales in November

• Another surprise jump

  • -4.7% expected

• Homebuyers took advantage of dip in mortgage rates

• However…different story when accounting for cancellations:

• Also different story YoY…9 straight months of annual declines:

Southwest Airlines LUV

• Extreme weather

• +2,600 flights canceled yesterday (80% of flights)

• LUV responsible for nearly 3/4 of US cancellations

  • Airlines have canceled 17k US flights since Wednesday

• More cancelations ahead

Earnings

• None

CRYPTO UPDATE

Weather affects crypo: Bitcoin BTC/USD hash rate suffers big drop

• Fell 38% over the weekend as miners powered off (aka curtailment)

• Winter storm = high electricity costs

• Curtailment way for miners to help electricity grid

Mark Cuban doubles down on Bitcoin 

• Wants prices to drop further to buy more

• Says gold bugs are “dumb as f***”