Weekly Financial Market Insights 📈
Elon Musk Dumps $4B In Tesla Shares, FTX Founder SBF Arrested For Fraud, Fed Hikes Rates Another 50 bps, CPI Inflation Softer Than Expected, and Adobe + Oracle + Accenture Earnings
Sunday Morning Markets ☕
Trading Week 50, covering Monday, Dec 12 through Friday, Dec 16. Your weekly financial markets update, in less than 5 minutes.
The Week In Review ⏪
Fed hikes interest rates 50bps again and raised their terminal rate to 5.1%
Consumer prices rose less than expected in November
Elon Musk dumps another 22m Tesla shares worth $3.6B
ECB and BOE hike rates in an effort to fight lasting inflation
FTX Founder SBF arrested in Bahamas and expected to be extradited to the US
Binance halts USDC withdrawals for eight hours
The crypto auditor Mazar pauses all work for crypto clients just a week after doing a Proof-of-Reserves for Binance
US Markets 🇺🇸
Federal Reserve hikes rates 50 bps to a targeted range between 4.25% and 4.5%, the highest level in 15 years. This rate increase broke the string of four straight 75 bps hikes, signaling that a slower pace of tightening is ahead.
The Fed raised its terminal rate to 5.1% according to its median forecast released in Wednesday’s Summary of Economic Projections. The forecast is higher than the 4.6% projected by the Fed in September.
Consumer price inflation was weaker than expected as the CPI rose just 0.1% (0.3% est.) during November and 7.1% (7.3% est.) for the year. Core CPI rose 0.2% (0.3% est.) on the month and 6% (6.1% est.) on an annual basis.
Elon Musk sells another 22m shares of TSLA worth an estimated $3.6B, according to an SEC filing Wednesday. According to VerityData, Musk has sold 94.2m shares so far this year for proceeds of ~$22.9B.
Goldman Sachs to lay off 4,000 employees in January, representing nearly 8% of its total workforce. The layoffs will impact every division of the bank and may end up being smaller than the reported amount.
Retail sales fall 0.6% in November as consumers feel the pressure from inflation, missing estimates of a 0.3% decline. Home furnishing stores, building materials, and motor vehicles led the fall with decreases of 2.6%, 2.5%, and 2.3% respectively.
Rest of World 🌏
China’s retail sales plunge far more than expected, while industrial production disappoints. Retail sales fell by 5.9% from a year ago, worse than expectations for a decline of 3.7%. Industrial production grew by 2.2%, missing forecasts of a 3.6% increase.
ECB hikes rates half-a-point to 2% but said it would need to raise rates “significantly” further to tame inflation. It also said that beginning March’23 it would reduce its balance sheet by 15B euros per month until the end of Q2.
Bank of England hikes key rate by 50 basis points to 3.5% and said they will continue to respond ‘forcefully’ if needed. “The labor market remains tight and there has been evidence of inflationary pressures in domestic prices and wages that could indicate greater persistence”
U.S lawmakers unveil bipartisan bill to ban TikTok after years of concern about potential Chinese government influence on the company. The bill would ban any social media company in or under the influence of, China, Russia, and several other foreign countries of concern.
Crypto ⚡
FTX Founder, SBF was arrested in the Bahamas after the U.S. SDNY filed criminal charges against him. The Bahamas expects the U.S. to request to extradite Bankman-Fried in short order. The SEC also plans to bring charges.
Binance temporarily halts USDC withdrawals as investor concerns mount after FTX collapse. CZ, CEO of Binance, tweeted that the exchange is seeing an increase in withdrawals of USDC. Systems were restored after ~8 hours.
Crypto auditor Mazars pauses all work for crypto clients due to concerns regarding the way these reports are understood by the public. Mazar has deleted the Proof-of-Reserves they provided for Binance last week, which showed the exchange was “overcollateralized”.
US Senators introduce Digital Asset Anti-Money Laundering Act with the aim of cracking down on money laundering and financing of terrorists and rogue nations via cryptocurrency. The bill would bring KYC rules to wallet providers and miners and prohibit financial institutions from transacting with digital asset mixers.
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Earnings Reports 💰
Oracle ($ORCL) — View report
Revenue: $12.3B vs $12.0B expected and $10.4B year ago (+18% YoY)
Adjusted EPS: $1.21 vs $1.17 expected and $1.21 year ago (+0% YoY)Cl
Segment Breakdown:
Cloud Services: $8.6B, up 14% YoY
Cloud License: $1.4B, up 16% YoY
Hardware: $0.9B, up 11% YoY
Services: $1.4B, up 74% YoY
Guidance: No guidance given:
Market Reaction: -0.8%
—
Lennar Corp ($LEN) — View report
Revenue: $10.2B vs $9.9B expected and $8.4B year ago (+21% YoY)
Adjusted EPS: $5.02 vs $4.88 expected and $4.36 year ago (+15% YoY)
Important Notes:
Deliveries: 20K, up 13% YoY
New Orders: 13.2K, down 15% YoY
Backlog: 18.9K, down 21% YoY
Guidance for Q1: New orders of 12K - 13.5K homes, deliveries of 12K - 13.5K, average sales price of $440K - $450K with gross margins of ~21%
Market Reaction: +1.8%
—
Adobe ($ADBE) — View report
Revenue: $4.53B vs $4.53B expected and $4.11B year ago (+10% YoY)
Adjusted EPS: $3.60 vs $3.50 expected and $3.20 year ago (+13% YoY)
Segment Breakdown:
Digital Media - Creative: $2.68B, up 8% YoY
Digital Media - Doc Cloud: $0.62B, up 16% YoY
Digital Experience: $1.15B, up 14% YoY
Guidance: Q1 non-GAAP EPS of $3.65 to $3.70 on sales of $4.6B to $4.64B
Market Reaction: +3.0%
—
Accenture ($ACN) — View report
Revenue: $15.8B vs $15.6B expected and $15B year ago (+5% YoY)
EPS: $3.08 vs $2.92 expected and $2.78 year ago (+11% YoY)
Segment Breakdown:
Comms, Media & Tech: $2.98B, up 3% YoY
Financial Services: $2.96B, up 2% YoY
Health & Public Services: $3.00B, up 10% YoY
Products: $4.67B, up 4% YoY
Resources: $2.14B, up 10% YoY
Guidance: Q1 sales of $15.20B to $15.75B. FY23 EPS of $11.20 to $11.53 on sales growth of 8% to 11%
Market Reaction: -6.0%
—
Other Reports:
Week Ahead 📅
Germany - Ifo Business Climate Index (Dec) 🇩🇪
Tuesday
US - Building Permits + Housing Starts (Nov) 🇺🇸
Canada - Retail Sales (Oct) 🇨🇦
Germany - PPI Inflation (Nov) 🇩🇪
Japan - BOJ Interest Rate Decision 🇯🇵
Earnings Reports: Nike, General Mills, FedEx, FactSet💰
Wednesday
US - CB Consumer Confidence (Dec) 🇺🇸
US - Existing Home Sales (Nov) 🇺🇸
Canada - CPI Inflation (Nov) 🇨🇦
Earnings Reports: Micron, Cintas💰
Thursday
US - Jobless Claims 🇺🇸
US - GDP (Q3) 🇺🇸
Japan - CPI Inflation (Nov) 🇯🇵
Earnings Reports: CarMax, Paychex 💰
Friday
US - PCE Inflation (Nov) 🇺🇸
US - Durable Goods (Nov) 🇺🇸
Canada - GDP (Q3) 🇨🇦
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