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We’re still wading through a fairly inactive time in the equities markets, sandwiched between major monthly economic prints and a fresh Q2 earnings season, which is currently at low tide. There’s also another month before the next Fed meeting — far enough away that speculation regarding whether another rate hike is on the way isn’t particularly useful.
Yesterday was a welcome move higher following a pullback from 2023 highs in mid-June. Profit-taking, portfolio rebalancing ahead of Q2 earnings season and a general malaise regarding the specter of an economic recession that has not yet dispersed. For sure, we’re a lot better off than many analysts expected us to be mid-year, but better-than-expected jobs and elevated price points are also promoting stubborn inflation that the Fed remains mindful it needs to quash, which keeps recession odds higher. And so investors are being careful not to get too far ahead of themselves currently.
We do see International Trade in Goods numbers for May this morning: -$91.1 billion is a deeper cut than expected, but an improvement from the downwardly revised -$97.1 billion posted for April. Advance Retail Inventories, also for May, grew +0.8% to $778.7 billion — half a point higher than the previous month’s upwardly revised +0.3%. Advance Wholesale Inventories last month dipped -0.1% to $912.9 billion, an improvement from the downwardly revised -0.3% the previous month.
None of these figures will move today’s market in and of themselves (it will likely take Friday’s Personal Consumption Expenditures [PCE] to provide a push in one way or the other), but they do place markers on overall economic health. We’re not super-volatile, overall we’re seeing more economic shrinkage than inflation poking through like a weed, and prospects for the second half of 2023 are not so worrisome (though Q2 guidance might change this outlook).
After today’s close, microchip provider Micron (MU - Free Report) will present fiscal Q3 earnings results, in which it looks to break a two-quarter string of negative earnings surprises. A big drop in year-over-year earnings and sales is expected, but anything pointing to improved guidance would likely be welcomed by late traders. Over the past month, Micron shares are down nearly -7%, although year-to-date they’re still over +30%. The company also advances plans for its new plant in Syracuse, NY, which will reportedly bring 50K new jobs to the region.
Image: Bigstock
Trade and Inventories Determine Economic Health
Wednesday, June 28th, 2023
We’re still wading through a fairly inactive time in the equities markets, sandwiched between major monthly economic prints and a fresh Q2 earnings season, which is currently at low tide. There’s also another month before the next Fed meeting — far enough away that speculation regarding whether another rate hike is on the way isn’t particularly useful.
Yesterday was a welcome move higher following a pullback from 2023 highs in mid-June. Profit-taking, portfolio rebalancing ahead of Q2 earnings season and a general malaise regarding the specter of an economic recession that has not yet dispersed. For sure, we’re a lot better off than many analysts expected us to be mid-year, but better-than-expected jobs and elevated price points are also promoting stubborn inflation that the Fed remains mindful it needs to quash, which keeps recession odds higher. And so investors are being careful not to get too far ahead of themselves currently.
We do see International Trade in Goods numbers for May this morning: -$91.1 billion is a deeper cut than expected, but an improvement from the downwardly revised -$97.1 billion posted for April. Advance Retail Inventories, also for May, grew +0.8% to $778.7 billion — half a point higher than the previous month’s upwardly revised +0.3%. Advance Wholesale Inventories last month dipped -0.1% to $912.9 billion, an improvement from the downwardly revised -0.3% the previous month.
None of these figures will move today’s market in and of themselves (it will likely take Friday’s Personal Consumption Expenditures [PCE] to provide a push in one way or the other), but they do place markers on overall economic health. We’re not super-volatile, overall we’re seeing more economic shrinkage than inflation poking through like a weed, and prospects for the second half of 2023 are not so worrisome (though Q2 guidance might change this outlook).
After today’s close, microchip provider Micron (MU - Free Report) will present fiscal Q3 earnings results, in which it looks to break a two-quarter string of negative earnings surprises. A big drop in year-over-year earnings and sales is expected, but anything pointing to improved guidance would likely be welcomed by late traders. Over the past month, Micron shares are down nearly -7%, although year-to-date they’re still over +30%. The company also advances plans for its new plant in Syracuse, NY, which will reportedly bring 50K new jobs to the region.
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