Good Morning Everyone!

We finally have a taste of deflation. Thanks to a -0.1% month-over-month CPI reading.

Prices as of 4 pm, EST, 1/11/23; % YTD

MARKET UPDATE

U.S. CPI year-over-year in 2022

• January 7.5%

• February 7.9%

• March 8.5%

• April 8.3%

• May 8.6%

• June 9.1%

• July 8.5%

• August 8.3%

• September 8.2%

• October 7.7%

• November 7.1%

• December 6.5% street at 6.5%

6th consecutive month of lower inflation but 6.5% still well above Fed’s 2% goal

• 3 year average before the pandemic was 2.1%

Q4 earnings begin tomorrow

• JP Morgan (NYSE:JPM) Bank of America (NYSE:BAC) Wells Fargo (NYSE:WFC) Citi (NYSE:C)

• United Healthcare  (NYSE:UNH)      

10yr flat on the day

10 a.m. Biden speech on inflation and the economy

Fed speakers today Bullard and Barkin

China

• Ahead of the Chinese New Year holiday (the highest period for travel)

• China will stop reporting daily Covid cases and deaths

Crude 78.67 +1.2%

Disney (NYSE:DIS)

• Mark Parker (former Nike CEO) elected to Board

Google (NASDAQ:GOOGL)

• Alphabet’s life sciences unit (which is small) cutting 15% of jobs

• 200 jobs impacted

Earnings

• Taiwan Semiconductor

  • Guides Q1 revenues $16.7-$17.5 billion vs street at $17.64

  • Gross margins to be negatively impacted due to lower utilization rate

  • 2023 Capex = $32 billion to $36 billion

• KB Home (NYSE:KBH) -3%

  • Orders down 50-60% year-over-year vs. street at down 35%

  • Cancellations up 68%

CRYPTO UPDATE

Gensler: crypto industry is the “Wild West”

• Spoke during Twitter Spaces held by US Army yesterday

• “Most of these 10 or 15,000 tokens will fail … history tells us that there’s not much room for micro currencies”

• Says most not complying with securities laws (which remain unclear…)

Coinbase (NASDAQ:COIN) debt downgraded

• S&P Global (credit agency) downgraded Coinbase corporate debt to “BB-” from “BBB”

• From investment grade to speculative grade

• Downgrade follows large wave of layoffs

US taxpayers foot bill for $4.3 billion loan to help Silvergate (NYSE:SI) stay afloat

Crypto bank Silvergate is facing a bank run after working closely with FTX

But US taxpayers just footed the bill for a $4.3 billion loan to help the bank stay afloat

Is this really something the government should be doing?