October 16, 2023

U.S. Sanctions Propel Oil Prices to 3 Dollars

📰 News Organizations

  • Oil Surges $3 on US Sanctions. Oil prices leapt $3 on Friday after the U.S. tightened its sanctions program against Russian crude exports, raising supply concerns in an already tight market, with global inventories forecast to decline through the fourth quarter.

  • Pfizer Cuts Full Year Guidance By $9 Billion. Pfizer is cutting its guidance due to changes in expected sales of its Covid-19 vaccine and treatment Paxlovid. Pfizer also said it would also take measures to save at least $3.5 billion through the end of 2024.

  • BlackRock Clients Pull $13 Billion From Long-Term Funds. The redemptions are a sign that investors have preferred to keep cash on hand in money-market funds or in certain bond strategies while interest rates remain elevated.

  • Ferrari Begins to Take Crypto as Payment for Cars in US. Ferrari NV is allowing US customers to pay for its luxury sports cars using cryptocurrency, with plans to expand the payment method to Europe by the first quarter of 2024.

  • Walgreens, Other Chains Could Stage Nationwide Walkout. Walgreens staff are planning for a nationwide walkout and rallies at the end of October to protest unsatisfactory working conditions, and are in talks with employees from other retail pharmacies.

🐦 Twitter

  • The S&P 500 fell to 4200 and is holding support via the 200-day moving average and a 50% retracement. At last week’s low, only 9% of stocks were above their 50-day moving average. Source.

  • U.S. Oct. Consumer Sentiment plunged to 63, a far greater drop than had been expected, as inflation expectations jumped to 3.8%, the highest in five months. The Fed already lost the inflation war, and the middle class and the poor are collateral damage. Source.

  • The 10-year/3-month yield curve has now been inverted for a record 232 tradings days while the 10-year/2-year curve has been inverted for 320 straight trading days, the second longest streak on record. These streaks have always been associated with recessions. Source.

  • All the headlines about the jobs report highlight how the US added 336,000 jobs in September. But, what they don't highlight is the DROP in full-time employment. Over the last 3 months, full-time employment in the United States is down 692,000. Source.

  • Energy outperformed Friday while YTD leadership trio of Comm Serv, Tech, & Cons Discr underperformed; YTD laggards got bit of a boost but continue to lag MTD. Small caps unable to gain traction; Russell 2000 Value remains weakest index YTD. Source.

  • Not only are Wall Street’s biggest banks profiting from higher benchmark yields, but they're also benefiting from complacent depositors who aren't making too much noise about getting a bigger cut of the profits. Source.

AI is expected to more than double the GDP of developed countries in Europe, Asia, and the United States, and drive worker productivity as much as 35% higher across those regions.

Beth Kindig

📓 Online Publications

  • The GDPNow Model Estimate For Real GDP Growth. The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2023 is 5.1 percent on October 10, up from 4.9 percent on October 5.

  • National Association of Realtors Is Imploding. A substantial number of U.S. real estate agents and brokers from Redfin, Anywhere RE(former Realogy), and RE/MAX will drop out of NAR membership this year. NAR’s silence on breaking news led to a loss of confidence.

  • NAR to Release September Existing Homes Sales On Thursday. The consensus is the NAR will report sales of 3.94 million SAAR, down from 4.04 million in August. This would be a new cycle low, below the 4.00 million SAAR in January 2023.

  • Listings Tick Up And Prices Tick Down This Fall. The added punch of mortgage rates nearing 8 percent is making this year’s fall season particularly slow, with home values showing an uncharacteristic 0.1 percent decline in value between August and September as a result.

  • Intel Launches a New Budget Graphics Card. Intel is launching the $179 Arc A580 one year after it entered the discrete graphics card market. This will likely be the last graphics card launch before Intel's next-gen Battlemage arrives next year.

🎧 Podcasts

  • EU Opens Probe Into X Over Israel-Hamas War Misinformation. EU investigates X for spreading disinformation and violent content during the recent conflict. X faces fines if it doesn't address concerns by next week. Source(4:03)

  • Rolling Recession Hits Varied Sectors. We’re having a rolling recession, impacting different areas at different times, with periods of recovery interspersed. While it hasn't simultaneously hit the entire economy, they were pocket-recessive episodes. Source(17:36)

  • Defense Industry Consolidation. There's been a huge consolidation over the past decades where there are only a handful of defense companies and it's an oligopoly. Many of these armaments are single source so there's only one producer. Source(48:59)

  • Fed Keeps Options Open Amid Economic Uncertainty. The latest data hasn't definitively shaped the Fed's decision, leaving options open. With higher inflation and a strong job market, the expectation is for the Fed to maintain steady rates in November. Source(2:23)