A Sign Of Belt-Tightening At General Motors

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In his Daily Market Notes report to investors, Louis Navellier wrote:

50 Bips Off the Boil

Jobless claims are higher than expected, yields fall, and stocks are higher.

Another round of bad news is good news. Initial jobless for the week came in today at 211K, above the 195K forecast, and the highest since 225K in the last week of 2021. This took the prospects for a 50bps increase by the Fed this month off the boil.

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Interest rates moved immediately with the US 2-year yield dropping an impressive 9bps, the 10-year down 3bps. The US dollar index dropped, though still firmly above 105, and the VIX dropped below 19 albeit temporarily.

The S&P 500 jumped back above 4,000 to 4,017 but broke back below in the first hour, though still up on the day and trending back up. All the major indexes are in the green, modestly, except the Russell 2000 which was up briefly and is now down half a percent (though still up 7.2% YTD).

Any whiff of a reason for the Fed to moderate increases is grasped at by markets, with hopes that given more time the inflation numbers will march down and bring a pause by the Fed sooner rather than later. Tomorrow, we'll get the all-important payroll and wage numbers for February.

General Motors' Belt-Tightening

Today, General Motors Company (NYSE:GM) announced they will offer voluntary buyouts to a "majority" of its US white-collar employees, in another sign of belt-tightening.

On the international front, tensions continue between the US and China, with China claiming its growth prospects are being held back by our hawkish Fed with factory orders there reporting weak results.

In Ukraine, Russia has upped their missile attacks, including the use of hypersonic missiles which can evade existing anti-missile defenses. Hope for a quick global boost from a strong China reopening and/or a truce in Ukraine are fading.


Stagflation Encore

The word we haven't heard lately, stagflation, is probably due for an encore soon as doubts if the Fed can contain inflation without bringing the economy to a crawl continue to rise. The Fed's increase next Wednesday will set the tone for the next few weeks. Volatility on that day is almost guaranteed.

Coffee Beans

When looking only at full-time, year-round work, American working women are paid 84 cents for every dollar that working men make on average. Asian-American women outearn the average woman in the U.S., but Latinas and Native American women get paid no more than 57 cents for every dollar white, non-Hispanic men make. Source: Statista. See the full story here.