All Is Calm Ahead Of The Federal Reserve This Afternoon

Good Morning Everyone!

Remember, today at 2pm, a group of middle-aged financial experts determines whether or not millions of Robinhood traders get margin called.

Prices as of 4 pm EST, 11/1/22; % YTD

MARKET UPDATE

2 p.m. Fed Reserve Rate decision

• Volatility is relatively LOW heading into the Fed Meeting

• 4th straight rate hike of 75 basis points expected

• More important: messaging on how the Fed proceeds from here

• 2:30 p.m. Powell press conference

• Will Powell say: we are not done

• Powell can’t be happy about the spectacular rally in the DOW in October / this is not what Powell wants

China orders a 7-day lockdown of iPhone City (Foxconn’s main plant in Zhengzhou)

• Foxconn had a Covid flare-up that forced 200,000 staff into quarantine

• Lockdown will last until November 9

• The abrupt action reflects Beijing’s Covid Zero approach

• Apple (NASDAQ:AAPL) pre-market is down 1%

Russia

• said it would resume participation in the Ukrainian grain deal

• Wheat down 6%, Corn down 2%

Crude 88 flat

• API Crude and product inventories out last night had little impact on Crude

• Fed Day is more important

Maersk container vessels

• A bellwether for global trade

• Believes global demand will shrink by 4% in 2022 and will be down in 2023

Amazon (NASDAQ:AMZN) hit a new year-to-date low yesterday

• Amazon paused hiring in their Ad business

• Any cost cutting measures will be viewed positive by investors

Autos

• U.S. supply 32 days 18 month high

• U.S. SAAR 15.3 million units 17 month high

• Incentives were down 47% year-over-year but up 2.7% month-over-month

• Inventory days supply is 32 days vs. 30 days last month and 23 days last year

• Mix remains strong favouring trucks: Car vs. light truck mix at 21% / 79%

Opioid Settlement

• Final settlement positive for pharmacies

• $12-13.8 billion for the big three retail pharmacies

• $21 billion announced in 2021 for the big 3 distributors

• CVS (NYSE:CVS) + 2%

• Walgreens Boots Alliance (NASDAQ:WBA) +2%

• Walmart (NYSE:WMT) flat

Earnings

• Advanced Micro Devices (NASDAQ:AMD)

• Mondelez (NASDAQ:MDLZ)

• Airbnb (NASDAQ:ABNB) beat but guide below street

• McKesson (NYSE:MCK)

• Public Storage (NYSE:PSA)

• Devon Energy (NYSE:DVN) Earnings and FCF beat, capex below consensus

• AIG (NYSE:AIG) EPS beat

• Prudential (NYSE:PRU) EPS beat

• Energy Transfer (NYSE:ET)

• CVS Health (NYSE:CVS) agreed to pay $5 billion to settle opioid lawsuits

• Estee Lauder (NYSE:EL) -8%, guide down to 2023

• Progressive Insurance (NYSE:PGR)

• Humana (NYSE:HUM)

CRYPTO UPDATE

International regulation

• G-20 will prioritize crypto regulation

  • Third objective of India’s G-20 presidency

  • Year-long presidency

  • Takes over starting in December

• Hong Kong warming up to crypto

  • Exploring giving access to retail crypto trading and ETFs

  • Considering range of pro-crypto measures

  • Mainland China much more strict

    • Blanket ban on all crypto in September 2021

Recent crypto trademark filings

• Visa (NYSE:V)

• PayPal (NASDAQ:PYPL)

• Western Union (NYSE:WU)

• Viking Cruises

• Ulta (NASDAQ:ULTA)

• Del Monte (NYSE:FDP)

• Kraft (NASDAQ:KHC)

• Inn-N-Out

• Takis

• Moët Hennessy

• Formula One

• DraftKing (NASDAQ:DKNG)