Friday Morning Market Headlines
Five Stories Moving the Market:
China factory gate prices fall in January, CPI rises – Reuters. China's January factory gate prices fell more than economists expected, suggesting that flashes of domestic demand that had stoked consumer prices after the zero-COVID policy ended are not yet strong enough to rekindle upstream sectors.
Australia raises inflation, wages outlook, sees higher rates – Bloomberg. Australia’s central bank boosted its forecast for core inflation this year and is trying to ensure the economy avoids a wage-price spiral, underscoring the need for even higher interest rates.
Nagel says ECB must act decisively to anchor inflation expectations – Reuters. The European Central Bank must act decisively to prevent inflation expectations from rising far above its 2% target, ECB policymaker Joachim Nagel said on Thursday, reaffirming his call for more interest rate increases.
Mexico stuns markets with half-point rate hike - Bloomberg. Mexico stunned markets Thursday by increasing interest rates by half a percentage point, in a move by the central bank to outpace the U.S. Federal Reserve that no top economist predicted.
Barkin says Fed's foot 'unequivocally' on the brake, sensible to move slower – Reuters. Tight monetary policy is "unequivocally" slowing the U.S. economy, allowing the Federal Reserve to move "more deliberately" with any further interest rate increases, Richmond Fed President Thomas Barkin said on Thursday.
Market Headlines:
Global Macro:
Bank of England Governor Andrew Bailey and his colleagues noted the risks that inflation could remain well above the U.K.’s 2% target for some time, during testimony to the Treasury Committee in Parliament on Thursday – Bloomberg.
The Bank of England missed a $790 million bond sales target by $35 million on Thursday, the first time it has failed to get enough demand at one of the auctions that make up its new quantitative tightening (QT) program - Reuters.
The high-altitude Chinese balloon that crossed over the U.S. last week is just part of a years-long surveillance program with Beijing deploying such craft around the globe, the U.S. said, as officials sought to draw new attention to what they say is an increasingly aggressive Chinese spying campaign – Bloomberg.
The U.S. House of Representatives passed a resolution Thursday 419-0 condemning China for its “brazen violation of United States sovereignty” and seeking more information from the White House, the latest development in the spy balloon saga that has gripped Washington since late last week - WSJ.
Lower export volumes saw Russia's current account surplus shrink 58.2% to $8 billion in January, the central bank said on Thursday, squeezing Russia's capital buffers at a time when Moscow is ramping up budget spending – Reuters.
Worker filings for unemployment benefits rose last week but remained historically low, reflecting a tight labor market despite company layoff announcements – WSJ.
Apple and Google may be violating Japanese antitrust law with their handling of mobile apps, the Japan Fair Trade Commission said Thursday, arguing for further regulation to prevent anti-competitive behavior by tech platforms – Nikkei Asia.
Mortgage rates rose at the start of February, snapping a month-long string of declines that had drawn some homebuyers off the sidelines – WSJ.
Company Specific:
PayPal’s volume growth on its platforms slowed even faster than expected in the final three months of last year, yet another sign that consumer spending continued to stumble even during the normally busy holiday season - Bloomberg.
Lyft shares plunged after the ride-hailing company posted an unexpected loss in the fourth quarter and said first-quarter revenue would come in below Wall Street expectations - WSJ.
Yahoo will eliminate about 1,000 jobs beginning this week, the first round of cuts in a larger plan to restructure its advertising tech division amid a wave of layoffs in the industry - Bloomberg.
Nelson Peltz called off his proxy fight at Walt Disney after the entertainment company unveiled a reorganization and cost-cutting plan that sent its shares higher – WSJ.
Kellogg surpassed market expectations for quarterly sales and profit on Thursday and said it would retain the plant-based meat business it had planned to spin off – Reuters.
Pharmaceutical executives are ready to make deals; executives at Pfizer, Merck, and Novartis said they are looking for promising drugs to add to their pipelines and replenish sales as top-selling products lose patent protection in the coming years - WSJ.
AbbVie on Thursday forecast 2023 profit below Wall Street expectations, in the first outlook since its blockbuster arthritis drug Humira faced competition from cheaper biosimilars in the United States early this year – Reuters.