The Core Personal Consumption Expenditure Price Index was in line with expectations, growing 0.2% last month, according to Bloomberg data. Personal income advanced 0.4%, versus estimates for a 0.3% increase; while personal spending inched up 0.1%, versus expectations of a 0.2% increase.

 

Macroeconomic data continues to send signals that are difficult to interpret. It was better before, as my neighbor says. At least, after 2008, everything was always well oriented, we knew where we were going. But even in the other direction, it was easier: during the financial crisis, all the statistics were rotten. There too, we knew where we were going. But this year, it's a big mess. In the United States, activity indicators are weakening in industry, but the two surveys on services are giving contradictory results. Employment is holding up but not real estate. Retail sales are down but not consumer confidence...

Investors no longer know where to turn to and alternate between moments of euphoria, like Wednesday, and bouts of depression, like yesterday. On Wall Street, the Nasdaq 100 lost 2.5% to fall back below 11,000 points. The S&P 500 held up a little better but erased its gains of the day before by giving up 1.5%. The cause? The combination of an upward revision to Q3 GDP and stronger-than-expected weekly employment numbers. The fact that the U.S. economy is resilient has investors concerned that the Fed will have to keep rates at high levels longer to calm the current imbalances. The day before, these same investors were rather reassured that consumer sentiment was up. This makes little sense…

Let's leave this confusing environment for more superficial considerations. Let's look back at 2022 and give a few awards:

  • The 2022 We did not see this coming Award: The EU, for the geopolitical lesson following the discovery of its energy dependence on Russia.
  • The 2022 Spoiled Brat Award: Unsurprisingly, it goes to Elon Musk for his life's work.
  • The 2022 Bernie Madoff Award: Several candidates were neck and neck, when suddenly FTX came up.
  • The 2022 Deutsche Bank Award: It naturally goes to Credit Suisse, by unanimous vote of the jury. The prize will be renamed "Credit Suisse Prize" as of next year, until it is transferred to another financial institution.
  • The 2022 Political Suicide Award: Liz Truss, British Prime Minister, 09/06/2022-10/25/2022.
  • The 2022 Resurrected Financial Term Award: "Gilt". The word Gilt came to the public's ears when the cost of British debt soared during the short-lived Truss government. It is the name given to British (and other ex-Commonwealth nations for that matter) government bonds. It could also have been "pivot".
  • The 2022 Big Screwup Award: A Citigroup trader brought down several European markets on May 2, 2022 with a wrong order. The OMX30 in Stockholm lost 7.9% after this blunder.
  • The 2022 Big Drop Award: Cathie Wood's ARK Innovation fund, a bundle of risky assets has lost two-thirds of its value this year.
  • The 2022 Discovery Award: Inflation, that weird thing that everyone had more or less forgotten since the 1980s.

This last session before Christmas is dominated by the report of the so-called "January 6 Commission", which considers Donald Trump to be the "central cause" of the attack on the Capitol. Also in the United States, a severe winter storm is threatening the holiday season in many states. Meanwhile, the ex-CEO of FTX, Samuel Bankman-Fried, will be released after having paid a $250 million bail, with the obligation to wear an electronic bracelet and to stay at mom-and-pop's house in California.

 

Economic highlights of the day:

Another busy session in the United States. Durable Goods Orders, PCE Inflation and Household Income and Spending, New Home Sales and the University of Michigan Confidence Index. All the macro agenda is here. This morning, Japan reported annual inflation of 3.7% in November, in line with forecasts.

The dollar remains unchanged against the euro and the pound at EUR 0.9430 and GBP 0.8307. The ounce of gold is falling back to 1792 dollars. Oil consolidates, with North Sea Brent at USD 83.74 per barrel and U.S. WTI light crude at USD 79.80. The yield on 10-year US debt is up to 3.69%. Bitcoin flirts with USD 16,800.

 

In corporate news:

* Tesla- Elon Musk said Thursday that he won't sell any more Tesla shares for about two years after disposing of nearly $40 billion worth of stock since late last year. In pre-market trading, the automaker is up 0.7 percent.

* Meta, Facebook's parent company, agreed to pay $725 million (€683.70 million) to settle a lawsuit accusing the social network of letting third parties, including consulting firm Cambridge Analytica, access its users' personal data.

* Apple Watches with an electrocardiogram feature violate patents owned by medical device maker AliveCor, the U.S. International Trade Commission announced Thursday, which could lead to a ban on their importation into the United States.

* Mobile phone operator AT&T and fund manager BlackRock announced the formation of the Gigapower joint venture to operate a fiber-optic platform in the United States.

* Microsoft said Thursday that its proposed acquisition of video game publisher Activision would benefit both gamers and other companies in the industry

 

Analyst recommendations:

Coupa Software - Canaccord Genuity lowers its recommendation to "hold" from "buy".

Paychex: Jefferies cuts Price Target on Paychex to $120 from $130, Maintains Hold rating

Solaredge Technologies: Daiwa Securities initiates coverage on SolarEdge Technologies with Neutral Rating, $325 Price Target.

The Toro Company: Raymond James upgrades Toro Co. to Outperform from Market Perform, Price Target at $130