🏦☹️ Big Bank Layoffs Incoming
Welcome to the Sunday Primer,
Wishing you a happy holiday from the Hump Days team!
We wanted to let you know that the Sunday Primer will be returning in 2023, so you won’t be getting a Christmas or New Year’s version. The Wednesday newsletter will still be going out though so keep your eyes out for that!
- Humphrey, Rickie & Tim
Market Report
We got CPI day this week, and it seems like inflation is finally showing consistent signs of cooling. Or is it? CPI rose just 0.1% from the previous month, and increased 7.1% from a year ago, compared with respective estimates of 0.3% and 7.3%.
Energy prices went down 1.6% for the month, which helped keep inflation in check. However, food prices went up 0.5% and were 10.6% higher than a year ago. Shelter costs, which make up about a third of the CPI weighting, continued to go up, increasing 0.6% on the month and 7.1% on an annual basis.
On Wednesday, the Federal Reserve (Fed) raised its target interest rate by 50 basis points on Wednesday, signaling that more increases are probably coming as the central bank expects a significant economic slowdown and rising unemployment. The FOMC bumped the rate up to between 4.25% and 4.5% and projections that came with the announcement, the median Fed official expected rates to hit 5.1% late next year, which means another 0.75 percentage point hike in 2023.
Big news on Wall Street this week came from Goldman Sachs, which is reportedly planning to lay off several thousand employees as it prepares for an uncertain economic environment in 2023. The exact number of job cuts has not yet been determined, but as many as 4,000 employees could be impacted. The bank is also expected to reduce or cancel end-of-year bonuses. Other Wall Street banks including Morgan Stanley, Credit Suisse, and Barclays have also announced plans for layoffs.
Forecast Ahead
Corporate Earnings (Throughout Week)
Monday, December 19th - Carnival Corp. (CCL)
Tuesday, December 20th - Nike (NKE), General Mills (GIS), FedEx Corp. (FDX), FactSet Research Systems (FDS), BlackBerry Ltd. (BB), and FuelCell Energy (FCEL)
Wednesday, December 21st - Micron Technology (MU), Cintas Corporation (CTAS)
Thursday, December 22nd - CarMax (KMX), Mission Produce (AVO)
What We Read Last Week
FTX’s Sam Bankman-Fried Charged With Criminal Fraud, Conspiracy (WSJ)
“Moment of Panic”: FTX Collapse Deepens Fear in Silicon Valley (The Information)
The Future of Work Is Lunch (Bloomberg)
Consumer Checkpoint: End-of-Year Health Check (Bank of America Institute)
Individual Investors Hang On in Wild Year for Stocks While Pros Sell (WSJ)
ChatGPT Holds Promise and Peril (Bloomberg)