Inflation Day. Feds Have More Work To Do

Good Morning Everyone!

Inflation:

+8.3% YoY in August. Higher than +8.1% expected.  

Average interest rate of savings account in America: 0.06%.  

Do with this what you want.

Prices as of 4 pm EST, 9/12/22; % YTD

MARKET UPDATE

Market has rallied on:

1. Peak inflation

2. Ukraine

3. Resilient U.S. consumer according to MasterCard SpendingPulse

But interest rates continue to trend higher at the same time (usually moves in opposite direction)

CPI year-over-year

• June 9.1% highest since 1981 (40+ year high)

• July 8.5%

• August 8.3% inflation dropped less than expected (8.1% expected)

Core CPI

• Up 6.3% versus 5.9% in July

10yr 3.4% moved from 3.3% to 3.4% after today’s inflation data

Federal Reserve meeting

• Next week (Sept. 21)

• 75-basis point increase in the bag

• Federal Funds Target Rate Range 2.25% to 2.5%

• New expected Range 3.0% to 3.25%

US$ 109

C$ 76

VIX 24

Crude 87  -0.5%

• Supply constraints vs. China/U.S. recession fears

• U.S. Strategic Reserves at lowest level since 1984

• Versus

• China 3-day Festival holiday trips fell by 16.7%

• Tomorrow: U.S. Department of Energy report

Emmy Awards

• HBO took home the most Emmy Awards last night

• 38 wins including Succession and White Lotus, up from 19 wins last year

• Netflix NFLX at #2 with 26 wins, down from 44 last year

Meta META

• This is the opportunity ahead of Zuck (Value Stock)

• Close the 10-to-1 gap.

• According to WSJ:

• Users cumulatively spending

• TikTok 197.8 million hours a day

• Reels 17.6 million hours a day

Earnings

• Oracle ORCL - stock flat, building cloud but no EPS upside

CRYPTO UPDATE

Institutional adoption

• Fidelity considering Bitcoin BTC/USD trading on its brokerage platform

• Chicago Mercantile Exchange CME launching ether options

Coffee & NFTs

• Starbucks’ SBUX new NFT-based loyalty rewards program

• Built on Polygon MATIC/USD PoS network

• “Starbucks Odyssey” - waitlist open

Digital asset flows

• Total outflows = $62.7 million

• 5th consecutive week of outflows

  • 5-week total = $99 million

  • Relatively small

• Weak volume at 46% of year average

• Contrarian inflows out of Europe ($7 million)

• Altcoins minor inflows