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Breakfast Bites - Fri May 5, 2023

Rise and shine everyone


The big news this morning is the US Jobs Report being released at 8:30am ET. Since the Fed’s next decision is heavily data dependent, all the major macro data that comes out from until the next meeting will matter to the market.


The other news is Apple’s earnings. While the company didn’t talk much about AI on their earnings call, they did deliver average quarter. And in this market, average is good. Their beat on both top line and bottom line, although estimates were low. YoY their EPS came in flat at $1.52 and Revenues were down -2.5% YoY. But iPhone revenues saved the day coming in +1.51% YoY. Asia and Europe saw an uptick in revenues while the America saw a decline and miss on estimates.


The market received Apple’s earnings well and US Futures are higher this morning. Yields are also slightly higher this morning, with oil and Bitcoin. Gold and the USD are looking weak and the yield curve continues to steepen after the Fed meeting.


Asia and Australia

  • Asia equities ended mixed Friday in a directionless day's trading. Hang Seng closed higher for the day and week with IT bouncing back energy stocks dragged.

  • Now China’s Caixin Services PMI also slumps. Caixin services PMI was 56.4 in April, below consensus 57.0 and follows 57.8 in the previous month. While it still remains in expansionary territory, this slowdown is troubling.

  • RBA Forecasts: Inflation still not expected to return to upper end of 2-3% target range until mid-2025.


Europe, Middle East, Africa

  • European equity markets higher. Energy, Banks and Chemicals outperform; Food/Beverage, Healthcare and Travel/Leisure lag.

  • The ECB raised rates by 25bps yesterday but didn’t talk about pausing at all. Quite the opposite in fact, they discussed further rate increases.

  • German factory orders post largest monthly decline since April 2020. German factory orders declined (10.7%) m/m vs (2.3%) expected.

  • Forecasters put Eurozone inflation at 5.6% in 2023 and expect inflation to come down within the 2% target by 2025.

  • UBS considering retaining Credit Suisse's investment-banking unit, selling the rest


The Americas

  • PacWest, First Horizon and Western Alliance led renewed slide in US regional lenders as sentiment disconnects from fundamentals. KRE is seeing a marginal reprieve pre-market but, doubt that these banks are out of the woods.

  • Costco delivered their monthly numbers. (I missed this yesterday). They saw an increase in sales from March +2.9% ex-gas and FX; strength is still in food, while weakness remains in discretionary retail.

  • Icahn Enterprises moves their earnings call to 10 May from today, post the Hindenburg short report. They also put out a note giving $2 per depositary unit days.

  • Microsoft working with AMD on expansion into AI processors

  • Block beats earnings expectations, shakes off short seller report; DoorDash beats Q1 forecasts as it expands services, markets; Lyft shares tumble as cheaper rides to hurt Q2 margin; Coinbase Q1 revenue beats estimates as markets rebound

  • FTC is proposing a new order that will make it illegal for Meta to make money off of anyone under the age of 18. This could be a massive issue in terms of ad revenue.

  • J&J’s spin off Kenvue, started trading yesterday opening +16% above IPO price. This is the largest IPO since 2021.


Calendars

(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)





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