Morning Briefing

Inflation, especially services inflation, looks sticky: PCE inflation up a fast 0.4% month to month in January

Inflation, especially services inflation, looks sticky: PCE inflation up a fast 0.4% month to month in January

The headline, all-items Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation measure, climbed at a 2.4% year over year rate in January. That was in line with what economists had forecast and down from the 2.6% annual rate in December. The core PCE, that is after stripping out more volatile food and fuel prices, climbed at a 2.8% year over year rate. In December the annual rate of core inflation had been 2.9%. But that was the end of the good news in today’s PCE inflation report.

Palo Alto takes a beating after it lowers guidance; preview of Nvidia tomorrow?

Palo Alto takes a beating after it lowers guidance; preview of Nvidia tomorrow?

t should be a familiar story in this priced-to-perfection market: Company beats big in current quarter but lowers guidance and stock takes a dive. Latest victim? Palo Alto Networks (PANW). The stock is down 14.09% at 4:30 New York time today. And with Nvidia scheduled to report tomorrow after the close, you can bet the market will be on edge tomorrow.

Another day, another hotter than hoped inflation number

Another day, another hotter than hoped inflation number

The Labor Department reported Friday that its producer price index—which tracks inflation before it reaches consumers—rose 0.3% from December to January. The index had dropped -0.1% in December. Measured year over year, producer prices rose by 0.9% in January. But the month to month increase in producer prices and at a higher month to month rate is the latest sign that getting inflation the “last mile” down to the Federal Reserve’s 2% target rate is going to be harder and take longer than expected.

Good but disappointing news on CPI inflation for January

Good but disappointing news on CPI inflation for January

Headline, all-items Consumer Price Index (CPI) inflation fell again in January, but not by as much as economists had projected before this morning’s report from the Bureau of Labor Statistics. In January prices rose at 3.1% year-over-year. That’s a slower increase than the 3.4% annual rate notched in December. But economist had projected that inflation would dip to a 2.9% annual rate. And stocks dropped on the disappointment.

Tick…tick…tick: Look at all the real estate debt that will mature in 2024

Tick…tick…tick: Look at all the real estate debt that will mature in 2024

Nearly 20% of outstanding debt on US commercial and multifamily real estate-— $929 billion–will mature this year, requiring refinancing or property sales, Bloomberg reported today. The volume of loans coming due has swelled 40% from an earlier estimate by the Mortgage Bankers Association of $659 billion, a surge attributed to loan extensions and other delays rather than new transactions. About $4.7 trillion of debt from all sources is backed by U.S. commercial real estate. An estimated $85.8 billion of debt on commercial property was considered distressed at the end of 2023, MSCI Real Assets reported, citing an additional $234.6 billion of potential distress.

Inflation, especially services inflation, looks sticky: PCE inflation up a fast 0.4% month to month in January

Saturday Night Quarterback says (on a Sunday), For the week ahead expect…

I expect another downward move for inflation when the January Consumer Price Index (CPI) is reported on Tuesday. Economists surveyed by Bloomberg expect that the core consumer price index, which excludes move volatile food and fuel prices, will show a year over year rate of increase of 3.7% in January. That would be the slowest year-over-year increase since April 2021.

Saturday Night Quarterback says, For the week ahead expect…

Part 2 Worries over a top: Why this isn’t 2000–I don’t see a replay of the Dot-Com Bear Market

As I wrote a few days ago in my post “Was the Meta Platform 20% pop the market top? An important sign, yes,, but not for the reasons you think” I do think this stock market rally is putting in a top.

But I’m not worried that we’re looking at a reply of the Dot-Com crash and Bear Market that took the NASDAQ Composite down 40% in 2000 after that tech-heavy index gained more than 85% in 1999.

Why not? Let me count the ways. I get to four.

If you’re an investor looking for something to worry about in 2024, think China

If you’re an investor looking for something to worry about in 2024, think China

The news pointing to serious trouble in China’s economy–the kind that can’t be fixed by replacing market regulators in Beijing–keeps on coming. If you’re looking for “something” that could upset the global apple cart in 2004, keep your eye on China. The country’s market is big enough to matter for just about every company doing business internationally, and China is a key market for companies ranging from Tesla and Apple to Starbucks and Yum Brands. So the news today from the National Bureau of Statistics showing another big drop in consume prices–in this case not good news on inflation but a signal of sluggish domestic demand–worries me.