You Talkin’ Bout Taxes? | The Daily Peel | 12/2/22

• JPow thinks he runs the rate game, but the market is doing most of his work for him
• Congress said, “you’re gonna take this deal….and you’re gonna like it”
• The G7 seeks to break the laws of economics as it plans to go through with the Russian oil price cap
• I’m sure this has nothing to do with those protests that are no big deal at all, obviously, but anyway, China is actually gonna chill with zero-C-19 measures

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The Moment We Were Waiting For?

Alright, everybody, calm down now.

Yes, the Bureau of Economic Analysis did release the figures for October’s Fed-preferred inflation measure. And yes, the numbers did come in lower than expected, but can it really mean…?

Alright, time to settle down for real. The core personal consumption expenditure index, aka “Core PCE,” an inflation measure exclusive of food and energy prices and JPow’s favored method of inflation tracking, registered a month-over-month growth of 0.2% and a year-over-year growth of just 5.0%.

Meanwhile, personal income gained 0.7% on the month, well above the 0.4% expected but just behind the 0.8% registered growth in spending.

Keep in mind that this report comes on the heels of an October CPI report that too came in quite below analyst expectations. It’s not a streak until it’s three in a row, but something tells me it’s not a bad start.

Of course, there is absolutely no guarantee that these sequential beats (or maybe misses?) of inflation expectations are indicative of a long-term trend. A sample size of 2 is difficult to make a solid statement about anything with.

Moreover, Chair Powell could not have been more clear when he spoke earlier this week in detailing the fact that the Central Bank is gonna need a helluva lot more evidence than a couple of positive readings to change its mind on rate hikes, and it appears the market knows this.

U.S. indexes were mildly confused about what to do yesterday, bouncing around to ultimately settle almost flat across the board. Conveniently, this confused mindset happens to match that of the Fed’s.

As we move into 2023, the uncertainty plaguing markets will, without a doubt, be overstaying its welcome. “To recession or not to recession” will remain the question for a while, likely until we’re already deep in it if so. It’s gonna be a fun few weeks of activity, apes, and pretty soon, we may just look back and laugh at how little we truly knew.

Source

Okta ($OKTA) ↑ 26.46% ↑

• You might not believe identity protection/verification companies even exist these days…but they do, and Okta’s one. A pretty good one, too, apparently.
• Shares absolutely ripped in late Wednesday trading, riding the wave of nearly 40% top-line growth and a fat beat on Q4 earnings guidance.
• And while guidance is basically just a guess, the point is that the firm now expects to make a profit, rattling analysts and pushing the stock up over a quarter of its previous value.

Snowflake ($SNOW) ↑ 7.80% ↑

• After Snowflake utterly melted (*bah dum tss*) on Wednesday, shares stormed back just shy of 8% as dip buyers emerged a day after the company posted the now-dreaded combo of solid earnings with weak guidance.
• Turns out that 67% annualized revenue growth and 75% non-GAAP gross margins are actually sweet. It just took the market a little extra time to realize it.