GDP Revised Lower, Labor Market Still Tight By Benzinga

Benzinga – Good Morning Everyone!

Wells Fargo (NYSE: WFC) just laid off hundreds of mortgage bankers, including some top producers who brought the bank more than $100 million in loans last year.

Is Wells Fargo making a huge mistake?

Prices as of 4 pm EST, 2/22/23; % YTD

MARKET UPDATE
Stock correlations

• Fading
• Becoming slightly less macro-driven
• Good news for stock pickers

FOMC minutes

• “Almost all” officials favor 25bps next meeting (Mar 22)
• “A few” want 50bps
• Forget about pivot – not willing to give up progress on inflation
• Market expect peak funds rate ~5.36%
• Number of mentions of “inflation”:

This morning’s data:

• Labor market
  • Still tight
  • 192k initial jobless claims vs. 200k expected (prev. 195k)
  • Continuing claims also lower than expected
• Q4 GDP
  • Revised lower
  • Second estimate 2.7% vs. 2.9% expected
• Core PCE
  • +4.3% vs. 3.9% expected (prev. 4.7%)

US housing

• Weak mortgage demand data follows weak sales
• Purchase index -18% last week (biggest drop since 2015)
  • At lowest level since 1995

• 2022: US housing market lost $2.3 trillion in value
  • 4.9% drop – biggest since 2008
  • Home prices in Dec 22 still 6.5% higher than Dec 21

O&G prices

• US nat gas has dropped 80% since August
  • Prices at pandemic-era lows
• EU gas prices now lower than before Russia invasion
• Same with Brent crude:

Nvidia (NASDAQ: NVDA)

• Beat top and bottom lines
• Both declined YoY
• Q1 sales forecast topped estimates ($6.5B vs. $6.3B)
• Continues to benefit heavily from AI rush

Alibaba (NYSE: BABA)

• Topped EPS and smashed sales estimates
• Gross merchandise volume (GMV) decline mid-single-digit YoY
• Cost controls have paid off: net income +69% YoY
• Expects strong demand on China reopening

Earnings

• Alibaba
• CBRE Group (NYSE: CBRE)
• Moderna (NASDAQ: MRNA)
• Cheniere (AMEX: LNG)
• Lloyds (NYSE: LYG)
• Vipshop (NYSE: VIPS)
• PG&E (NYSE: PCG)
  
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• Genuine Parts (NYSE: GPC)
• DISH (NASDAQ: DISH)
• American Electric Power (NASDAQ: AEP)
• Quanta Services (NYSE: PWR)
• NetEase (NASDAQ: NTES)
• Newmont (NYSE: NEM)
• Wayfair (NYSE: W)
• Bath & Body Works (NYSE: BBWI)
• Domino’s (NYSE: DPZ)
• Papa John’s (NASDAQ: PZZA)
• Rent-a-Center (NASDAQ: RCII)
• Atlas Air (NASDAQ: AAWW)
• Steve Madden (NASDAQ: SHOO)
• Yeti (NYSE: YETI)

CRYPTO UPDATE
Silvergate Bank (NYSE: YETI)

• Wall Street’s most shorted stock
• 73.5% of available shares being sold short
• Trails Carvana (NYSE: CVNA), Applied UV (NASDAQ: AUVI), Bed Bath & Beyond (NASDAQ: BBBY)
• Down +90% from 2021 peak

Bitcoin (CRYPTO: BTC) whales decline

• Number of whales (wallets holding >1k BTC) at lowest since August 2019
  • 2,027 whales
  • Each whale holds ~$25 million

• Wallets holding +1 BTC still rising (close to 1 million)
• Number of mega whales (+10k BTC) steady

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