Back to a Bull Market? | The Daily Peel | 11/14/22

• WeWork will close about 40 locations ahead of next year as it trims some of its fat going into next
• The OG teen vaping stick secured funding to stave off bankruptcy but will reduce its payroll by 30%
• Sequoia and other FTX backers are marking their holdings to zero, causing 9-figure losses overnight
• The U.K. is taking a look at attracting more immigrants to fill its gigantic labor hole

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Can JPow Finally Downshift?

The Fed breathed a collective sigh of relief after October’s CPI print. The fight isn’t over, but the prospect of bashing the economy with a hammer has lessened.

It’s even better than the headline—core CPI, which excludes food and energy, rose only 6.3% YoY. Economists expected much heftier increases.

• For a while there, there was concern that rate increases might not have had the same horsepower they used to. That would’ve been a big problem for the Fed, since it lacks many other inflation-fighting tools in its arsenal.
• JPow was clear that he’d rather wallop the economy than be too light on inflation and risk entrenched price increases. Since the current path seems to be working, he can just stay the course instead of turning it up to 11
• Betting odds for a 50-pointer in December sit at around 90%

The talk of the town is now where the terminal rate will end up. Since price gains are already slowing, the Fed might opt to slow its pace of increases but still plan on keeping rates steady somewhere around 4%-5%.

Comments from Fed governors have been mixed. Some are already declaring a slower path forward, while others are tempering the enthusiasm and saying there’s still a long road ahead.

Whether the upbeat print will lessen the pain of a recession is up in the air. Every day brings another behemoth announcing layoffs, and you gotta think those unlucky few will pare back their spending, which will ripple through the system.

But if we get a full-blown Santa Claus rally to end the year, and people’s wallets feel a little fatter while they’re holiday shopping, sidestepping a 2023 recession could be in the cards.

Source

Crude Oil (CL.1) ↑ 3.26% ↑

• C-19 Zero is getting scaled way back in China, pointing to more bustling business activity and, therefore, higher oil demand
• It should be interesting to see if China continues loosening restrictions and rejoins the endemic-C-19 world

Coinbase ($COIN) ↑ 12.84% ↑

• When one of your biggest rivals goes belly up, that market share has to go somewhere, and $COIN stands to scoop up many of FTX’s former customers
• Queen Cathie scooped up shares this week, betting that DeFi will survive its Lehman moment