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Breakfast Bites - Tue Aug 15, 2023

Rise and shine everyone.

The major economic release for today is the US Retail Sales data set to be released at 8:30am ET. The data is expected to come in stronger than last month. We also have the NAHB Housing Market Index at 10am ET.

Interesting 13F releases yesterday showing what funds were buying throughout the quarter. Warren Buffett’s focus was on home building - initiating position in DR Horton, Lennar and NVR.

We also have earnings for Home Depot this morning. Home Depot reports Q2 EPS $4.65 vs FactSet $4.45; Revenue $42.92B vs FactSet $42.19B; Same-store sales (2.0%) vs consensus (3.9%); announces $15B share repurchase authorization. Decent report.

US Equity Futures are trading lower this morning. Gold, Oil, and Bitcoin are all lower. The US Dollar Index is marginally lower this morning after yesterday’s gains. Treasury Yields are higher this morning with the Yield Curve at -0.75%

Asia and Australia

  • Asian equities ended mixed Tuesday. Greater China markets endured another volatile day and the main benchmarks all ended lower post PBOC action and weak July economic data.

  • PBOC surprised with a 15 bp cut to the 1y MLF rate to 2.50%. Seven-day reverse repo rate was also lowered 10 bp to 1.8%.

  • China’s Industrial production rose 3.7% y/y in July, lower than consensus and previous month. Cars and PCs remained notable drags.

  • China’s Retail sales saw the biggest miss -- growth slowed to 2.5% from 3.1% (lowest YTD) against expectations of a pickup to 4.5%.

  • China's state council and ministry of finance are considering a cut to stamp duty on stock trades in what would translate as a substantial attempt to revive its stock market

  • Japan Q2 GDP came in well above expectations - GDP expanded 6.0% q/q annualized in Q2, double the consensus forecast of 2.9%. Follows 3.7% in the previous quarter. This is impressive and bullish for the market.

  • RBNZ expected to leave OCR unchanged at 5.50% at its 16-Aug policy meeting

Europe, Middle East, Africa

  • European equity markets under pressure.

  • UK jobless claims jump but wage growth accelerates to new high - this doesn’t exactly bode well for inflation. Sticky wage inflation has been a point of concern for core inflation and puts pressure on the BoE to continue hiking.

  • On the hand, UK food price inflation drops sharply by 2.2% so we may expect a moderation in headline inflation.

  • German ZEW sentiment sees slight improvement in August at -12.3 versus consensus -14.7 and prior -14.75.

  • The Central Bank of Russia hiked its key rate by 3.5% to 12% at an emergency meeting. Central bank came under pressure to act after rouble extended recent weakness to trade at lowest level in over a year on Monday to move through 100 per dollar threshold.

  • European governments increasingly imposing windfall taxes on profit making businesses.

  • Saudi Arabia and UAE ramp up purchases of Nvidia chips crucial for developing AI software

The Americas

  • Tesla adds two lower spec versions of its less popular Model S and X electric vehicles in North America

  • US consumer more resilient than investors think, with spending expected to rise in 2023, 2024, BofA says

  • Argentina's central bank devalues peso, raises rates amid surprise election win by far-right candidate

  • US hedge funds bailed on Chinese stocks in Q2 with exposure well below five-year averages by end-July

  • Hollywood studios offer writers new deal to end strike; offer includes writers pay increase, data sharing, AI assurances


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


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