Wall Street Today | Morgan Stanley Warns US Stocks Risk 22% Slump
MACRO
Daly Sees Fed Raising Rates Above 5%, But How Far Is Unclear
"We are just going to have to hold our resolve," Raphael Bostic, president of the Atlanta Fed, told the Atlanta Rotary Club. He said the Fed was committed to tackling high inflation and this warrants raising interest rates into a 5% to 5.25% range to squeeze excess demand out of the economy.
San Francisco Fed President Mary Daly also said she expects the central bank to raise interest rates to somewhere above 5%, though the ultimate level is unclear and will depend on incoming data on inflation.
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Morgan Stanley Warns US Stocks Risk 22% Slump
Morgan Stanley's Mike Wilson said that while investors are generally pessimistic about the outlook for economic growth, corporate profit estimates are still too high and the equity risk premium is at its lowest since the run-up to 2008. That suggests the $S&P 500 Index (.SPX.US)$ could fall much lower than the 3,500 to 3,600 points the market is currently estimating in the event of a mild recession.
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US Corporations Are Still Lining Up to Buy Back Their Own Shares
American firms announced a record $1.26 trillion of share buybacks in 2022, up 3% from a year ago, according to data compiled by Birinyi Associates. By the firm's estimate, companies executed on 82% of that total, spending $1.03 trillion.
SECTORS
US Coal Prices Plunge 45% as Warm Winter Weather Stifles Demand
Coal from the Northern Appalachia region slumped to $115 a ton for the week ending Jan. 6, down 45% from the prior week, according to government figures released Monday. Spot prices for coal from Central Appalachia fell 33%, and fuel from the Illinois Basin dropped 31%.
Biggest Junk-Bond ETF Draws Most Cash Since 2020 as Debt Rallies
More than $1.7 billion flooded the $18 billion $Ishares Iboxx $ High Yield Corporate Bond Etf (HYG.US)$ last week as it rallied 2.6%. It was the biggest weekly haul since November 2020, data compiled by Bloomberg show.
COMPANY
Apple Plans to Drop Key Broadcom Chip to Use In-House Design
$Apple (AAPL.US)$'s push to replace the chips inside its devices with homegrown components will include dropping a key $Broadcom (AVGO.US)$ part in 2025, according to people familiar with the situation, dealing a blow to one of its biggest suppliers.
Lululemon Tumbles After Lowering Profitability Forecast
Gross margin is now expected to shrink by as much as 1.1% in the three-month period ending in late January, compared with a previous forecast for an increase of as much as 0.2%, the Vancouver-based company said on Monday. Lululemon shares fell as much as 9.29% on Monday. $Lululemon Athletica (LULU.US)$
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Moderna Considers Price of $110-$130 for Covid-19 Vaccine
$Moderna (MRNA.US)$ said it is considering pricing its Covid-19 vaccine in a range of $110 to $130 per dose in the U.S. when it shifts from government contracting to commercial distribution of the shots.
Source: Bloomberg, Dow Jones, CNBC
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OptionsKing : Lol 22% lower?
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