Connect with us

Economics

Key Events This Week: CPI, Jolts And Consumer Confidence

In the traditional post-payrolls lull, this week the focus will be on the US CPI inflation, job openings, consumer confidence and trade balance…

Published

on

This article was originally published by Zero Hedge

Key Events This Week: CPI, Jolts And Consumer Confidence

In the traditional post-payrolls lull, this week the focus will be on the US CPI inflation, job openings, consumer confidence and trade balance. There is a monetary policy meeting in Australia and Canada, while the US in blackout mode ahead of next week’s FOMC meeting. GDP data in the Euro area and Japan. In Emerging Markets, there are monetary policy meetings in Brazil, India, Poland, Ukraine and Peru. CPI and exports data in China.

The rest of the week ahead is published in the day by day calendar at the end but the other key events are the RBA (Tuesday) and BoC (Wednesday) after the big market disruptions post their previous meetings, Chinese CPI and PPI (Thursday), final German CPI (Friday) and the US UoM consumer confidence (Friday). Also look out for Congressional newsflow on how the year-end debt ceiling issue will get resolved and also on any progress in the Senate on the “build back better” bill which they want to get through before year-end. Mr Manchin remains the main powerbroker.

Courtesy of DB, here is a day-by-day calendar of events:

Monday December 6

  • Data: Italy October retail sales, Germany October factory orders, Germany and UK November construction PMI
  • Central Banks: BoE’s Broadbent speaks

Tuesday December 7

  • Data: Japan October leading index, balance of payments, final 3Q GDP, Eurozone final 3Q GDP, Germany October industrial production and ZEW survey, US trade balance
  • Central Banks: RBA monetary policy decision

Wednesday December 8

  • Data: Japan November money stock, Russia November CPI, US MBA mortgage applications, October JOLTS job openings
  • Central Banks: Reserve Bank of India, Bank of Canada, and Banco do Brasil monetary policy decisions

Thursday December 9

  • Data: China November CPI and PPI, Japan November PPI, Germany October current account balance, US weekly initial jobless claims

Friday December 10

  • Data: Germany final November CPI, Italy October industrial production, UK October monthly GDP, industrial production, and trade balance, US November CPI and University of Michigan surveys

Finally, focusing on just the US, the key economic data release this week is CPI on Friday. There are no speaking engagements from Fed officials this week, reflecting the FOMC blackout period.

Monday, December 6

  • There are no major economic data releases scheduled.

Tuesday, December 7

  • 08:30 AM Nonfarm productivity, Q3 final (GS -4.9%, consensus -4.9%, last -5.0%); Unit labor costs, Q3 final (GS +8.3%, consensus +8.3%, last +8.3%): We estimate nonfarm productivity growth was revised up to -4.9% in Q3 (qoq ar) following last week’s GDP report. We expect that Q3 unit labor costs—compensation per hour divided by output per hour—were unchanged at +8.3% (qoq ar).
  • 08:30 AM Trade Balance, October (GS -$67.5bn, consensus -$66.9bn, last -$80.9bn): We estimate that the trade deficit decreased by $13.4bn to $67.5bn in October, reflecting a sharp increase in exports in the advanced goods report.

Wednesday, December 8

  • 10:00 AM JOLTS Job Openings, October (consensus 10,500k, last 10,438k)

Thursday, December 9

  • 08:30 AM Initial jobless claims, week ended December 4 (GS 200k, consensus 225k, last 222k); Continuing jobless claims, week ended November 27 (consensus 1,910k, last 1,956k): We estimate initial jobless claims declined to 200k in the week ended December 4.
  • 08:30 AM Wholesale inventories, October final (consensus +2.2%, last +2.2%)

Friday, December 10

  • 08:30 AM CPI (mom), November (GS +0.82%, consensus +0.7%, last +0.9%); Core CPI (mom), November (GS +0.60%, consensus +0.5%, last +0.6%); CPI (yoy), November (GS +6.90%, consensus +6.7%, last +6.2%); Core CPI (yoy), November (GS +5.01%, consensus +4.9%, last +4.6%): We estimate a 0.60% increase in November core CPI (mom sa), which would boost the year-on-year by 0.4pp to 5.0%. Our forecast reflects a further rise in used car auction prices, a rebound in airfares, and upward pressure on most core goods categories due to supply chain bottlenecks and low promotionality during the holiday season. A Netflix price increase is also likely to boost inflation in the recreation services category. We also expect another strong gain in health insurance prices reflecting the gradual flow-through of the annual source data. We estimate rent +0.42% and OER +0.38%, reflecting the strength in our shelter tracker but an OER drag from imputed utilities. We estimate a 0.82% increase in headline CPI (mom sa), reflecting higher restaurant, grocery, and energy prices.
  • 10:00 AM University of Michigan consumer sentiment, December preliminary (GS 68.4, consensus 68.0, last 67.4): We expect the University of Michigan consumer sentiment index rose by 1pt to 68.4 in the preliminary December reading, as other confidence measures increased slightly relative to their November average.

Source: DB, BofA, Goldman

Tyler Durden Mon, 12/06/2021 – 09:37

Author: Tyler Durden

Economics

This Isn’t the Time to Buy Shiba Inu

It’s not been the easiest couple of months for cryptocurrency. The major cryptos have slumped in price as investor sentiment has waned. Meanwhile, it’s…

It’s not been the easiest couple of months for cryptocurrency. The major cryptos have slumped in price as investor sentiment has waned. Meanwhile, it’s a bloodbath in smaller altcoins. Shiba Inu (CCC:SHIB-USD), for example, has slumped from a peak of 0.000080 last summer to just 0.000025 now.

Concept red tokens for the Shiba Inu (SHIB) cryptocurrency.Source: Shutterstock

That represents a more than 60% decline for Shiba Inu holders since the peak back in October. Shiba’s decline is hardly extraordinary. Other animal-themed cryptos such as Dogecoin (CCC:DOGE-USD) have suffered painful losses as well.

A general sense of apathy is starting to set in across the crypto ecosystem. El Salvador’s highly-anticipated Bitcoin experiment appears to be struggling. Rating agency Moody’s just downgraded that country’s debt, citing rising risk from its Bitcoin experiment.

This will likely slow adoption by other foreign governments. For another, prominent crypto exchange Crypto.com just got hit with a major hack, and lost $15 million of funds. Those are just two of the various headwinds affecting the crypto market right now.

A Rough Time for Bitcoin and Crypto

Bitcoin has lost roughly 40% of its value since its recent peak. And the carnage is much worse in most of the smaller cryptocurrencies and tokens. Liquidity is drying up across many non-fungible token (NFT) and other such new projects and ecosystems.

This seems to be coming in part due to the huge drop in speculative growth and technology assets. The Federal Reserve has indicated that it will be rapidly tightening monetary policy and is leaning toward imminent rate hikes as well. This should serve as a deflationary force to counteract last year’s rapid climb in both asset and consumer product prices.

In times of diminishing market liquidity, risky assets with minimal profits and cash flows tend to fall the most quickly. Cryptocurrency, inherently, generates very little in economic profit. Much of the interest in crypto, by contrast, is to hedge again runaway inflation and out-of-control central bankers.

With the Fed slamming the breaks on inflation and speculative assets, however, crypto has fallen into a major slump. This slide has spread into crypto-related equities as well. Names such as Microstrategy (NASDAQ:MSTR) and crypto bank Silvergate Capital (NYSE:SI) have plummeted in recent weeks.

During Bear Markets, Stick to Quality

There’s a well-known pattern in investing. During rising bull markets, you see a dispersion across various assets. The concentration of funds in leading assets declines. People sell some of their larger more stable holdings to take a chance on smaller, newer, or riskier plays. As it pertains to stocks, this would be people selling down their FAANG holdings to buy an exciting new electric vehicle or quantum computing kind of stock.

Within crypto, you can see this concentration by looking at the portion of funds in major coins. During good times, the dominance — or market share — of Bitcoin (CCC:BTC-USD), Ethereum (CCC:ETH-USD) and other leaders will fall. People sell some of their BTC and buy hot new emerging projects. Or perhaps even meme tokens.

During bear markets, such as what crypto faces now, however, people return to the safe havens. Anything with a shaky or uncertain future is sold, and the funds are moved back into more secure plays such as Bitcoin or Stablecoins tied to the value of the U.S. Dollar. While Bitcoin is down 40% from its peak, many smaller cryptos are off 70%, 80%, or even more over the same stretch.

A big part of quality, as it pertains to crypto, is utility. Does the coin or token accomplish much actual function for users? Bitcoin is a store of value and has the biggest brand. Ethereum has the most well-known decentralized finance “DeFi” platform with lots of lending applications on it. Solana (CCC:SOL-USD) has emerged as a low-cost alternative for new crypto projects such as NFT collections. But what is Shiba Inu useful for? As of now, there’s almost no utility to the Shiba Inu token.

Bottom Line

Cryptocurrency is in a difficult place right now. Liquidity is down. The Federal Reserve is reining in excessive speculation in financial markets. Hackers have hit crypto in recent days. And the list goes on. This is not an easy time to be allocating funds to the cryptocurrency marketplace.

Given that backdrop, traders should stick to high-quality cryptos for the time being. If and when the quality names find their footing, then it might be time to start diving deeper into the lower-tier altcoins. For now, though, tokens such as Shiba Inu that have little value beyond their memetic appeal will remain in the doghouse.

On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a sizable New York City-based hedge fund. You can reach him on Twitter at @irbezek.

More From InvestorPlace

The post This Isn’t the Time to Buy Shiba Inu appeared first on InvestorPlace.



monetary




monetary policy
deflationary
store of value

Author: Ian Bezek

Continue Reading

Economics

Commodities: Oil rally pauses, Gold lower, Bitcoin breaks $40k

Oil Energy traders were not surprised to see the oil price rally slow down.  WTI crude fell after a surprise build with US stockpiles and following a…

FacebookTwitterEmail

Oil

Energy traders were not surprised to see the oil price rally slow down.  WTI crude fell after a surprise build with US stockpiles and following a bloodbath on Wall Street that sent risky assets into freefall. Crude prices may not have a one-way ticket to $100 oil, but the supply-side fundamentals certainly support that could happen by the summer.  The next few trading sessions could be difficult for energy traders as oil prices may move more so on investor positioning ahead of Wednesday’s FOMC policy decision and over a handful of brewing geopolitical risks, that include Russia-Ukraine tensions, Iran nuclear talks, and developments with global handling over North Korea. 

The crude demand outlook is also providing steadily positive support for oil prices throughout the rest of the year.  Schlumberger CEO Olivier Le Peuch, noted, “Absent any further COVID-related disruption, oil demand is expected to exceed pre-pandemic levels before the end of the year and to further strengthen in 2023.” The oil market should remain very tight and if we have any disruptions to productions, that should easily send prices much higher. 

Gold

Gold prices edged lower as commodities got punished after Wall Street entered into a major de-risking mode.  Normally gold performs well when Treasury yields drop, but today was all about going back to cash. Earnings have underwhelmed and fears of how the economy will handle higher interest rates has many investors concerned that risky assets could continue to slide further next week. 

Given that large parts of the economy will still perform well this year despite higher borrowing costs, gold will eventually find the right balance of becoming both a safe-haven and inflation hedge.  Gold most likely won’t be vulnerable to an excessive panic-selling market selloff given how strong the economy is positioned, so if prices can break past the $1850 barrier post-Fed, the path to $1900 should be there. 

Bitcoin

Bitcoin has quickly gone from a consolidation pattern to the house of pain.  The world’s largest crypto plunged as crypto traders de-risk portfolios following the bloodbath in stocks and in advance of next week’s FOMC policy meeting. Risky assets did not stand a chance today and momentum selling accelerated after Bitcoin broke below $40,000 level. Bitcoin remains in the danger zone and if $37,000 breaks, there is not much support until the $30,000 level.   

gold
inflation
commodities
policy
interest rates
fed

Author: Ed Moya

Continue Reading

Economics

US Close: Market jitters ahead of Fed and massive earnings week, Netflix tanks

Wall Street has gone from debating how aggressive one should rotate out of tech into cyclicals, to sell it all. US stocks have been on a rollercoaster…

FacebookTwitterEmail

Wall Street has gone from debating how aggressive one should rotate out of tech into cyclicals, to sell it all. US stocks have been on a rollercoaster ride after abysmal results from Netflix. Investors have two big worries:  it seems every day traders are reminded inflationary pressures are not going away anytime soon and could prompt the Fed into becoming overly aggressive in tightening monetary policy. The other concern is that profit growth expectations may have been too optimistic and underpriced in the ballooning labor costs. Geopolitical risks are also adding fuel to the selling pressure.

Next week will be massive for tech earnings as Apple, Microsoft, Tesla, and Samsung report. Netflix shocked and if the other mega-cap giants hugely disappoint, the Nasdaq will be in trouble.

Netflix

Netflix shares collapsed over 20% after delivering disappointing subscriber guidance for the first quarter.  The streaming giant acknowledged that the competition has intensified and the impact to COVID disruptions is still being felt. The company is still posting strong revenue numbers and has a strong revenue outlook and has growth potential outside of North America.

It comes as no surprise that after today’s plunge, at least nine firms lowered their ratings for Netflix.  Netflix is still the king of content and while this is the first heavyweight to post a rather disappointing outlook, it really isn’t that bad.  The mega-cap stock’s overall subscriber growth for the past few quarters was solid, and it could easily be expected that the first quarter would be soft as many people will be returning to pre-COVID behavior. 

monetary
policy
fed
monetary policy
inflationary

Author: Ed Moya

Continue Reading

Trending