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- 📊 The Weakening Consumer
📊 The Weakening Consumer
Ticker Tea
April 02, 2024
Yesterday markets were mixed after a flurry of economic data with conflicting sentiment 👇
The day's trading began on an optimistic note, bolstered by favorable reports from the previous Friday. The core PCE price deflator and personal spending reports hinted at a potential soft landing for the economy, providing early support to the markets. Tech stocks, especially chip makers, led gains, helping the Nasdaq 100 stay in the green despite broader market challenges.
However, the positive momentum was short-lived. The S&P 500 retreated from its early gains, pulled down by a surge in bond yields. This surge followed the release of the US March ISM manufacturing index, which exceeded expectations and signaled a robust pace of expansion. The data hinted at a possible hawkish shift in Fed policy, dampening hopes for imminent rate cuts.
Economic indicators had their share of surprises, with the US February construction spending unexpectedly contracting. On a brighter note, the personal spending report for the same month showcased the largest increase in 13 months, although personal income growth fell short of expectations. The drop in savings rate (below) also signals consumers may have less to freely spend. The personal saving rate fell to 3.6% from 4.1% prior, hitting its lowest level since Dec 2022.
Poll Results
Equity markets for the month of April will end...
🟩🟩🟩🟩🟩🟩 Up ⬆️ (46%)
🟨🟨🟨🟨⬜️⬜️ Sideways ➡️ (31%)
🟨🟨🟨⬜️⬜️⬜️ Down ⬇️ (23%)
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» Trump's net worth decreased by $1 billion due to a 21% drop in the stock of his social media venture, Trump Media & Technology Group ($DJT). The company reported a loss of over $58 million in 2023, with revenue at $4.1 million, notably lower than competitors like Reddit ($RDDT) and Snap ($SNAP). (link)
» Bloomberg Economics warns of an 88% chance of unsustainability in the U.S. debt trajectory, potentially eclipsing World War II levels by reaching a 123% debt-to-GDP ratio by 2034. Congressional disagreements on budget reforms raise the specter of a financial crisis as the catalyst for decisive action. (link)
» Citigroup ($C) has finalized a reorganization in its US investment bank, impacting the Technology, Media, and Telecom (TMT) sectors, leading to notable departures like managing directors Yaseen Choudhury and Abhi Singhal. This move is part of Citigroup's efforts to streamline operations, resulting in $2.5 billion in savings and the elimination of 20,000 roles. (link)
» As the S&P 500 hits new highs, traders seek tail-risk hedges, anticipating extreme market moves while downplaying minor corrections. This shift in options trading reflects optimism for growth alongside caution against unforeseen risks, amid improving economic indicators and a resurgence of meme stock frenzy. (link)
» Bond traders have adjusted their 2024 Federal Reserve rate-cut expectations following a surge in U.S. manufacturing, reducing the likelihood of a rate reduction in June to below 50%. This shift, accompanied by a notable increase in Treasury yields, reflects a market shift towards the potential of sustained higher interest rates amid signs of economic strength. (link)
» Rubrik, a data security software vendor, has filed for an IPO, signaling a resurgence in the tech IPO market following a lull. Despite revenue growth to $627.9 million, the company's widened net loss underscores the high costs of expansion in the competitive tech sector, where it competes with giants like $Dell and $IBM. (link)
» Microsoft's ($MSFT) unbundling of Teams from Office due to European regulatory scrutiny could give competitors Zoom ($ZM) and Salesforce ($CRM) an edge in the communication software market, potentially shifting market dynamics and leveling the playing field for growth. (link)
Major ($10bn+) earnings releases scheduled the next five business days 👇 Click here for a comprehensive list of upcoming earnings releases
Results from yesterday’s economic releases & today’s schedule below 👇 Click here for full schedule & live updates of Wall Street estimates.
Happiness is not something ready made. It comes from your own actions.
Dalai Lama XIV
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