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Astute Market Overview - 31st January 2023


Following last week’s UK-centric overview, this week we go west with a US-centric update.

Those readers and watchers of the Astute Market Overview who are active on social media may well imagine how it would feel to have your account blocked, and not able to see what your acquaintances are up to, or share your opinions or holiday pictures with your family, friends or followers.

Following Meta’s announcement last week that his two year ban had elapsed, former US President Donald Trump will be allowed back onto Instagram and Facebook. The ex-president, who is launching his campaign for 2024, was banned from the platform following the capitol riots.

We’re into the S&P 500 earnings season, where we look out for Q4 earnings releases from the biggest companies listed in the US.  As we’ve previously said, with margins under pressure from rising costs and wages, economies slipping into recession, and all sorts of lurking geopolitical risks, it will not make for a comfortable reporting season.

Whilst we expect that there is scope for upside surprises in these company earnings (given that much pessimism is baked into share prices), Intel delivered a blow last week.

Intel is the world’s leading semiconductor chip manufacturer, and if you’re reading this on a computer, there is a good chance that there’s a bit of Intel inside.

Towards the end of the week, markets digested Intel’s release of both Q4 2022 quarterly earnings, and forecasts for revenue this quarter: both were below market expectations, and Intel’s shares fell 6.4% on Friday.

US consumer spending data released towards the end of the week added evidence to cooling inflation. In the US, consumer spending fell by 0.2% in December, which is the second fall in as many months. The concern over recession in the region is one of the primary reasons that consumers are spending less; given that spending will feed through to prices, this data is a sign that pressure behind inflation is continuing to ease.

This data is another piece of the puzzle to be assessed by the fed ahead of their interest rate decision this week.

Despite the aforementioned earnings spook, markets in the US appeared to take solace in data pointing to the continued easing of inflation. The S&P 500 ticked up over the week.

Looking towards this coming week, we’ll be looking out for:

  • Q4 2022 company earnings, and
  • Interest rate decisions from the Federal Reserve, European Central Bank and the Bank of England.

See you then.

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Astute Market Overview – 25th January 2023

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Astute Market Overview – 8th February 2023