Harmony At The Fed But Not At Disney | Morning Express | 2/9/2023

Posted: Feb. 9, 2023, 8:02 a.m.

Bill Baruch joins CNBC's Halftime Report at 11:00 am CT for the hour, don't miss it!

  • Messaging from the Fed has been in harmony; hike rates above 5% and hold into 2024. Stronger data will require a more aggressive cycle.
  • CME’s FedWatch Tool builds a base case for 25bps in March and another 25bps in May, bringing rates to 5.00-5.25%, in line with Fed rhetoric. The odds of an extra 25bps between those two meetings is starting to emerge with 4-6% probability.
  • However, market offsides pricing in a cut by December, bringing rates back below 5% with a 72.9% probability.
  • Disney is +5% after beating top-and-bottom-line estimates after the bell yesterday. Bob Iger announced a plan to cut 7,000 jobs and $5.5 billion in costs. Also, a plan to segment out the company, taking its linear network service, studios, and streaming under the new Disney Entertainment division while segmenting out parks, experiences, products, and ESPN into one.
  • Pepsi and SPGI beat both EPS and revenues. ABBV is still to come
  • From Europe, German CPI was softer than expected at +8.7% y/y versus 8.9% expected, but it is still 8.7% and was +1.0% m/m.
  • German Dax +1.3% and helping to ramp E-mini S&P futures overnight.
  • Overseas earnings helping the lift; AstraZeneca and Siemens were mixed, but both stocks are up 5% and 3.5%, respectively.
  • U.S. Initial Jobless Claims are due at 7:30 am CT.
  • Keep an eye out for fresh Fed speak.
  • PayPal reports after the bell.
  • Inflation data from China tonight at 7:30 pm CT.

 

Do not miss our Midday Market Minute, from yesterday.

 

Want to know more about investing in Apple, Alphabet, and Amazon? All three were covered on this week’s Triple Play Podcast.

 

Fed Chair Powell was the highlight of the week, and we now look to a deluge of Fed speak in the coming days. Yesterday, Minneapolis Fed President Kashkari called for a 5.4% terminal rate, and Atlanta Fed President Bostic also pointed to more hikes than markets have discounted, although both are not 2023 voters. New York Fed President Williams speaks today at 8:15 am CT, and Fed Governor Barr follows at 9:00 am CT. Fed Governor Waller is known to be the most hawkish voice, and he speaks at 12:45 pm CT, shortly after the U.S. Treasury auctions $35 billion 10-year notes at noon CT.

E-mini S&P (March) / NQ (March)

 

S&P, yesterday’s close: Settled at 4130.50, down 45.25

NQ, yesterday’s close: Settled at 12,545.25, down 231.50

 

 

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Crude Oil (March)

Yesterday’s close: Settled at 78.47, up 1.33

 

 

 

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Gold (April) / Silver (March)

 Gold, yesterday’s close: Settled at 1890.7, up 5.9

Silver, yesterday’s close: Settled at 22.42, up 0.243

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Silver (March)

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