Monday Morning Meeting Notes (07/31/2023)

General Info:

• The Federal Reserve (Fed) raised interest rates by 0.25% last week, bringing the fed funds rate to a target range of 5.25-5.50%; below are two comments from Chairman Powell’s press conference
• “So the staff now has a noticeable slowdown in growth starting later this year in the forecast, but given the resilience of the economy recently, they are no longer forecasting a recession”
• It’s important to note that the staff projections are independent of those issued by policymakers, so take the quote with a grain of salt
• Chairman Powell stated that he does not see inflation returning to the Fed’s 2% inflation goal until 2025, but he also indicated the Fed would stop hiking rates in advance of reaching 2% inflation
• U.S. personal consumption expenditures (PCE) rose in line with economist estimates at 0.2% month-over-month and 3.0% year-over-year
• Core PCE, which excludes volatile food and energy costs, increased 0.2% month-over-month and 4.1% year-over-year (vs. expectations of 0.2% and 4.2%, respectively)
• U.S. Q2 2023 GDP data grew at an annualized pace of 2.4% (vs. expectations of 1.8%) due to stronger-than-expected consumer spending data
• In addition, business spending was robust primarily due to a series of bills – the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS Act – as they provide both direct funding and tax incentives for private companies to invest in areas like semiconductors and electric vehicles
• The European Central Bank (ECB) raised its main refinancing operations rate by 0.25%, bringing it to 4.25%
• The Bank of Japan (BOJ) surprised markets by announcing that it would take a more flexible approach to controlling yields on 10-year government bonds, effectively allowing the 10-year yield to rise above the previous ceiling of 0.50%
• Fun Fact: August was once the sixth month of the year. In the Roman calendar, August was known as “Sextilis”, the Latin word for “six”. In 700 BC when January and February were added to the calendar, August was bumped down to become the 8^th month of the year
• The month’s name was changed from “Sextilis” to “Augustus” in 8 BC in honor of Augustus Caesar, the Roman emperor and adopted son of Julius Caesar

Monday 07/31:

• U.S. Senior Loan Officer Opinion Survey on Bank Lending Practices
• Q2 2023 GDP data for the Eurozone
• Eurozone consumer price index (CPI) data for July
• China reports Manufacturing and Non-Manufacturing PMI data for July

Tuesday 08/01:

• Starbucks, Merck & Co, Toyota Motor Corp, Diageo, Nomura, Pfizer, Advanced Micro Devices, Marathon Petroleum Corp, Littelfuse, and Pinterest report earnings
• U.S. ISM Manufacturing PMI data for July
• U.S. job openings and labor turnover survey (JOLTS) data for June
• U.S. light vehicle sales for July
• S&P Global Manufacturing PMI data for the U.S., Eurozone, U.K., Germany, France, and India
• China Caixin Manufacturing PMI data for July
• Eurozone unemployment data for June
• Macau casino revenue for July

Wednesday 08/02:

• National Ice Cream Sandwich Day
• The original ice cream sandwich was sold for a penny in 1900 from a pushcart in the Bowery neighborhood of New York City
• The modern ice cream sandwich with the chocolate wafers is claimed to have been invented in 1945 by Jerry Newburg at……*drum roll please* Forbes Field in Pittsburgh
• PayPal, CVS Health Corp, Verisk Analytics, ANSYS, NCR Corp, Kraft Heinz, Marathon Oil Corp, Occidental Petroleum, CH Robinson Worldwide, Carlyle Group, Equinix, Etsy, McKesson, Simon Property Group, Shopify, SiteOne Landscape Supply, and Qualcomm report earnings
• South Korea reports CPI data for July

Thursday 08/03:

• National India Pale Ale (IPA) Day
• Apple, Amazon, Regeneron Pharmaceuticals, Becton Dickinson, Dun & Bradstreet, First Citizens Bancshares, Aptiv PLC, Timken, Stryker, Sabre Corp, Intercontinental Exchange, Epam Systems, Gilead Sciences, and Hasbro report earnings
• U.S. ISM Services PMI data for July
• S&P Global Services PMI data for the U.S., Eurozone, U.K., Germany, France, and India
• China Caixin Services PMI data for July
• Bank of England (BOE) monetary policy decision, followed by Governor Andrew Bailey’s press conference
• The BOE is expected to raise rates by 0.25%, which would bring its bank rate to 5.25%
• U.S. initial jobless claims and continuing claims data

Friday 08/04:

• Berkshire Hathaway and PPL Corp report earnings
• U.S. employment report for July, which is expected to show 200,000 new jobs added
• Eurozone retail sales data for June