In his podcast addressing the markets today, Louis Navellier offered the following commentary.
The Doves Are Outnumbering The Hawks
The Federal Open Market Committee (FOMC) minutes were released on Wednesday and revealed that the vast majority of FOMC voting members favored a 0.25% key interest rate increase and a few FOMC members would have agreed to a 0.5% increase.
Although Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard have been outspoken and calling for larger interest rate hike, neither vote on the FOMC.
Q4 2022 hedge fund letters, conferences and more
The FOMC minutes said “A number of participants observed that a policy stance that proved to be insufficiently restrictive could halt recent progress in moderating inflationary pressures” in conjunction with their reason for a key interest rate hike. Right now, the doves are outnumbering the hawks on the FOMC, so another 0.25% key interest rate hike at the March FOMC meeting is anticipated.
Falling Lithium Prices
The Financial Times reported that lithium prices have fallen 29% to $61,795 per ton in China in the past three months as demand for electric vehicles (EVs) have slumped. CATL, which is the world’s largest battery producer, has been signing contracts with Chinese EV manufacturers at discounted prices.
Interestingly, EV demand has also dropped in Germany and Norway this year due to subsidy cuts. Lithium prices in Europe and the U.S. have only fallen about 10% to $70,050 per ton due to stronger demand. In the past two years, lithium prices have more than tripled from $20,000 per ton, but clearly, prices are temporarily settling down until EV demand resurges in China.
Existing Home Sales Decline
The National Association of Realtors on Tuesday announced that existing home sales declined 0.7% in January to a 4 million annual pace, which is the 12th straight monthly decline as well as the slowest annual pace since October 2010.
Interestingly, economists were expecting existing home sales to rise 1.2% in January, so this was a major disappointment and prove that economists cannot hit the broadside of a barn. Compared to a year ago, existing home sales declined 36.9% as mortgage rates declined.
Rolling Recession
I mentioned on Fox Business about just “how many industries does the Fed need to destroy,” since there are now growing problems with subprime loans and car loans in addition to housing woes. Ed Yardeni likes to call the current economic environment a “rolling recession,” which I believe is an excellent description of the conundrum we are now in the midst of at the present time as the Fed continues to raise key interest rates.
The Labor Department on Thursday announced that weekly unemployment claims in the latest week declined to 192,000, down from a revised 195,000 in the previous week.
Continuing unemployment claims in the latest week declined to 1.654 million, down from a revised 1.691 million in the previous week. Overall, the labor market appears healthy, especially if continuing unemployment claims continue to decline.
Nvidia Emerges As The AI Leader
Finally, NVIDIA Corporation (NASDAQ:NVDA) surged in the wake of its fourth-quarter results based on its guidance and emergence as the AI leader. Specifically, Nvidia is helping Mercedes to emerge as the autonomous driving leader due to its Level 3 system via Nvidia chips.
The Mercedes system also uses Lidar, so companies than make Lidar sensors have also firmed up. Tesla Inc (NASDAQ:TSLA) abandoned expensive Lidar systems in favor of cameras only, but right now Mercedes and Nvidia are leading the race to develop the safest autonomous driving system.
Other auto manufacturers are also using Nvidia’s AI chips and systems, so its automotive business remains very promising.
Coffee Beans
A California man who has had a customized license plate reading "CASH" registered in his name since 1970 is now selling the plate with an asking price of $2 million. License plate rights have made for lucrative sales in the past.
Delaware, a state where low-numbered license plates are highly sought-after, saw a plate featuring the number 20 sell for $410,000 in 2018. Source: UPI. See the full story here.
