Final Week Of The Year

Good Morning Everyone!

Except Southwest Airlines, which canceled 2,500 flights yesterday and lost track of everyone's bags.

Their stock is down nearly 5% pre-market.

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Prices as of 4 pm EST, 12/23/22; % YTD


MARKET UPDATE

4 trading days left in 2022

  • Global stocks worst annual performance since 2008:

Global Stocks Biggest Annual Drop Since 2008 | Equities are nursing deep declines amid inflation, recession risks

China lifts inbound travel restrictions

  • Quarantine requirements to end January 8

  • Ends nearly 3 years of zero-Covid policy

  • Cases still high - winter outbreaks

Crude 79.9 +0.75%

  • 3-week high on China easing

  • Extreme weather in US → supply disruptions

    • Weather forecast to improve this week…rally killer?

4.4% = consumer 1-year inflation expectations (UMich)

  • Lowest since June 2021

  • Five-year expectations 2.9%

  • Inflation uncertainty remains too high for comfort:

2.4% = Personal savings rate

  • Consumers still have some pandemic cushion

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+5.5% = PCE YoY

  • +0.1% in November

  • Lowest since July

  • Sticky services:

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-2.1% = Durable Goods Orders in November

  • Biggest drop since April 2020 (Covid)

    • -0.6% expected

  • Business investments rose unexpectedly

+5.8% = New home sales in November

  • Another surprise jump

    • -4.7% expected

  • Homebuyers took advantage of dip in mortgage rates

  • However…different story when accounting for cancellations:

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  • Also different story YoY…9 straight months of annual declines:

Southwest Airlines LUV

  • Extreme weather

  • +2,600 flights canceled yesterday (80% of flights)

  • LUV responsible for nearly 3/4 of US cancellations

    • Airlines have canceled 17k US flights since Wednesday

  • More cancelations ahead

Earnings

  • None


CRYPTO UPDATE

Weather affects crypo: Bitcoin BTC/USD hash rate suffers big drop

  • Fell 38% over the weekend as miners powered off (aka curtailment)

  • Winter storm = high electricity costs

  • Curtailment way for miners to help electricity grid

Mark Cuban doubles down on Bitcoin 

  • Wants prices to drop further to buy more

  • Says gold bugs are “dumb as f***”

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