Summary Of the Markets Today:

• The Dow closed up 331 points or 1.00%,
• Nasdaq closed up 2.66%,
• S&P 500 up 1.89%,
• Gold $1930 up $5.90,
• WTI crude oil settled at $81 up $1.07,
• 10-year U.S. Treasury 3.488% up 0.089 points,
• USD $101.99 down $0.07,
• Bitcoin $22,264 up $1,179 – Session Low $20,904
• Baker Hughes Rig Count: U.S. -4 to 771 Canada +14 to 241

*Stock data, cryptocurrency, and commodity prices at the market closing.

Click here to read our Economic Forecast for January 2023

Today’s Economic Releases:

Total existing-home sales declined 34.0% year-over-year. The median existing-home price for all housing types in December was $366,900, an increase of 2.3% from December 2021. Per NAR Chief Economist Lawrence Yun:

December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates. However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.

Container imports into the USA declined 20% year-over-year whilst exports improve 15% year-over-year according to data analyzed by EconCurrents from the Ports of Los Angeles and Long Beach. These ports account for the majority of containers moved in and out of the USA.  The year-over-year comparison may not be totally comparable as there were issues last year with a huge backlog of ships waiting to offload a year ago. Our analysis is that exports continue to slowly moderate whilst imports are trending modestly up. Rising imports normally signal an improving economy.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 252 points or 0.76%,
• Nasdaq closed down 0.96%,
• S&P 500 down 0.76%,
• Gold $1931 up $27.10,
• WTI crude oil settled at $80 up $0.90,
• 10-year U.S. Treasury 3.395% up 0.02 points,
• USD $102.05 down $0.31,
• Bitcoin $21,082 up $3.34 – Session Low $20,666

*Stock data, cryptocurrency, and commodity prices at the market closing.

Click here to read our Economic Forecast for January 2023

Today’s Economic Releases:

Manufacturing activity in the region continued to decline overall, according to the firms responding to the January Manufacturing Business Outlook Survey. The diffusion index for current general activity rose from a revised reading of -13.7 in December to -8.9 in January. The new orders index improved from its December reading but remained negative. The firms continued to report overall increases in prices, and the prices received index remained elevated. Most future indicators were positive, but expectations for growth over the next six months were not widespread.

The number of CEO changes at U.S. companies rose 5% from 95 in November to 100 in December. December’s total is down 6% from the 106 CEOs who left their posts in the same month one year prior. In 2022, companies announced 1,235 CEO exits, down 8% from the 1,337 CEOs who left their posts in 2021. It is the lowest annual total since 2017 when 1,160 CEO exits were announced.

Privately‐owned housing units authorized by building permits in December were down 29.9% year-over-year. Privately‐owned housing starts in December were down 21.8 percent year-over-year. Privately‐owned housing completions in December were up 6.4% year-over-year. Housing continues to suffer from high mortgage rates.

In the week ending January 14, the advance figure for seasonally adjusted unemployment insurance weekly initial claims 4-week moving average was 206,000, a decrease of 6,500 from the previous week’s unrevised average of 212,500.

The union membership rate—the percent of wage and salary workers who were members of unions— was 10.1 percent in 2022, down from 10.3 percent in 2021, the U.S. Bureau of Labor Statistics reported today. The number of wage and salary workers belonging to unions, at 14.3 million in 2022, increased by 273,000, or 1.9 percent, from 2021. However, the total number of wage and salary workers grew by 5.3 million (mostly among nonunion workers), or 3.9 percent. This disproportionately large increase in the number of total wage and salary employment compared with the increase in the number of union members led to a decrease in the union membership rate. The 2022 unionization rate (10.1 percent) is the lowest on record. In 1983, the first year where comparable union data are available, the union membership rate was 20.1 percent and there were 17.7 million union workers.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 614 points or 1.81% – markets reacted to weak economic data (see “Economic Releases” below),
• Nasdaq closed down 1.24%,
• S&P 500 down 1.56%,
• Gold $1906 down $4.30,
• WTI crude oil settled at $79 down $0.98,
• 10-year U.S. Treasury 3.375% down 0.16 points,
• USD $102.42 up $0.03,
• Bitcoin $20,757 down $335 – Session Low $20,476

*Stock data, cryptocurrency, and commodity prices at the market closing.

Click here to read our Economic Forecast for January 2023

Today’s Economic Releases:

The Producer Price Index (PPI) for final demand continued to moderate in December 2022 increasing 6.2% year-over-year – declining from 7.3% in November. This continues to demonstrate that the Federal Reserve’s inflation-fighting methods are still working. For the last 13 years, the PPI and Consumer Price Index have correlated.

Advance estimates of U.S. retail and food services sales for December 2022 rose 6.0% above December 2021
If one inflation adjusts for this growth – retail sales have been contracting for the last 3 months (see the red line on the graph below). The primary reasons for the poor sales is gas stations and construction materials.

Industrial production growth slowed to 1.7% year-over-year in December 2022 – down from 2.2% in November. A look at the components of industrial production:

• Manufacturing is -0.4% year-over-year – down from +0.9% in November;
• Mining is +5.8% year-over-year – down from +6.8% in November;
• Utilities are +9.7% year-over-year – up from +4.2% in November (caused by cold weather energy demand)

Microsoft announced today it would cut 10,000 workers amid economic uncertainty, echoing major Technology companies in recent weeks. With Microsoft’s planned reductions, Challenger, Gray & Christmas, Inc. has tracked 19,150 job cuts announced by companies in this sector through January 18th.

According to the Federal Reserve’s Beige Book of January 18, 2023:

Overall economic activity was relatively unchanged since the previous report. Five Districts reported slight or modest increases in overall activity, six noted no change or slight declines, and one cited a significant decline. On balance, contacts generally expected little growth in the months ahead. Consumer spending increased slightly, with some retailers reporting more robust sales over the holidays. Other retailers noted that high inflation continued to reduce consumers’ purchasing power, particularly among low- and moderate-income households. Auto sales were flat on average, but some dealers noted that increased vehicle availability had boosted sales. Tourism contacts reported moderate to robust activity augmented by strong holiday travel. Manufacturers indicated that activity declined modestly on average, and, in many Districts, reported that supply chain disruptions had eased. Housing markets continued to weaken, with sales and construction declining across Districts. Commercial real estate activity slowed slightly, on average, with more notable weakening in the office market. Nonfinancial services firms experienced stable demand on balance. Most bankers reported that residential mortgage demand remained weak, and some said higher borrowing costs had begun to dampen commercial lending. Energy activity continued to increase moderately, and agriculture conditions were generally unchanged or improving.

A summary of headlines we are reading today: