Monday Morning Meeting Notes (05/01/2023)

General Info:

• The advance reading of Q1 2023 U.S. GDP showed a growth rate of 1.1% annualized, which was lower than consensus estimates (2.0%) primarily due to companies drawing down on their inventories
• Inventories are often one of the more volatile measures of GDP growth, as headwinds from companies drawing down their inventory levels in one quarter often lead to a pickup in new orders and an increase in inventories in the following quarter
• Due to the cyclicality of inventories, we would take the “GDP miss” with a grain of salt
• Personal consumption expenditures (PCE) for March were largely in-line with expectations
• PCE increased 0.1% month-over-month and 4.2% year-over-year
• Core PCE, which excludes volatile food and energy costs and is the Fed’s preferred inflation gauge, increased 0.3% month-over-month and 4.6% year-over-year
• Fun Fact: Although we colloquially refer to all of them as peacocks, only the males are actually called peacocks. The females are peahens, and the species is peafowl

Monday 05/01:

• Berkshire Hathaway, Park Hotels and Resorts, ON Semiconductor, SBA Communications, NXP Semiconductors, and MGM Resorts International report earnings
• U.S. ISM Manufacturing PMI for April

Tuesday 05/02:

• Pfizer, BP, Ford, DuPont de Nemours, Uber, Sealed Air Corp, Advanced Micro Devices, Marathon Petroleum Corp, Simon Property Group, and Lumen Technologies report earnings
• U.S. light vehicle sales for April
• U.S. Job Openings and Labor Turnover Survey (JOLTS) data for March
• S&P Global Manufacturing PMI for the Eurozone, U.K., France, Germany, Spain, and Italy
• Eurozone consumer price index (CPI) data for April

Wednesday 05/03:

• Verisk Analytics, Yum! Brands, Qualcomm, MagnaChip Semiconductor, CVS, Kraft Heinz, Scotts Miracle-Gro, Etsy, Generac, Zillow, Vimeo, and NiSource report earnings
• Federal Reserve monetary policy decision, followed by Chairman Jerome Powell’s press conference
• The Fed is expected to increase rates by 0.25%, which would bring the fed funds rate to a target range of 5.00-5.25%
• U.S. ISM Services PMI for April
• U.S. ADP payroll data for April
• Eurozone unemployment data

Thursday 05/04:

• Apple, Becton Dickinson, Aptiv PLC, Ball Corp, Kellogg, Macerich, Sabre Corp, PPL Corp, Intercontinental Exchange, Shopify, XPO Logistics, Zoetis, Jones Lang Lasalle, and Lyft report earnings
• European Central Bank (ECB) monetary policy decision and President Christine Lagarde’s press conference
• The ECB is expected to raise rates by 0.25%, which would bring its main refinancing rate to 3.75%
• U.S. initial jobless claims and continuing claims data
• S&P Global Services PMI for the Eurozone, U.K., France, Germany, Spain, and Italy
• China Caixin Manufacturing PMI

Friday 05/05:

• Calumet Specialty Products, Magna International, and Mettler-Toledo report earnings
• Cinco de Mayo, which commemorates the Battle of Puebla during the French-Mexican War, symbolizes Mexico’s freedom (not to be confused with Mexico’s independence day), and acts as a day to honor Mexican culture
• In 1861, the Battle of Puebla pitted 6,000 French troops vs. an under-supplied and outnumbered group of Mexican troops, but the Mexican army overcame the French in under a day
• U.S. employment report for April, which is expected to show 180,000 new jobs added
• In addition, the unemployment rate is expected to remain steady at 3.5%, while average hourly earnings are expected to increase 0.3% month-over-month and remain at 4.2% year-over-year
• China Caixin Services PMI
• Eurozone retail sales