People walk along 5th Avenue in Manhattan, one of the country’s major shopping streets, on February 15, 2023 in New York City.
Spencer Platt | Getty Images
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what you need to know today
- We Retail sales rose 3% in January, versus the expected 1.9%. This figure beat a decline of 1.1% in December. Separately, industrial production was flat in January. Analysts were forecasting a 0.4% gain.
- ,BYD is far ahead of Tesla in China … It’s almost ridiculous,” said Charlie Munger, Berkshire Hathaway’s vice chairman. He called the Chinese electric vehicle maker his favorite stock. Berkshire doesn’t like TSMC that much anymore, though, dumping about 86% of those shares. 3rd and 4th quarter of 2022.
- Supporter are investors”taunting the feds said Marko Kolanovic of JP Morgan, who called the March 2020 bottom right. He warned that “this divergence cannot go on.”
Bottom-line
It seems that investors are no longer worried about inflation and high interest rates. Strength in the US economy – which will mean further rate hikes – is translating into gains in the markets.
Yesterday I mentioned how continued consumer spending can propel the economy. Indeed, the year-over-year increase in January retail sales – 6.4% – is the same number as the year-over-year increase in the Consumer Price Index. The prospect of continued economic growth appears to be infusing optimism in stocks as well. The Dow Jones Industrial Average rose 0.11%, the S&P 500 0.28% and the Nasdaq Composite 0.92%.
Recent economic activity and market movements are forcing economists and investors to reconsider the impact of interest rates. Higher costs of borrowing typically slow economic growth by reducing spending and increasing unemployment, which in turn depletes stocks. Yet “the monthly report on industrial production, retail sales and jobs was generally better than expected and points to an uptick in economic activity in early 2023 after a soft patch in late 2022,” Comerica Bank chief economist Bill Adams said. This.
This fluctuating relationship between higher interest rates and a pick-up in economic activity is leading some investors, such as Dan Niles, founder of the Santori Fund, to speculate that the Federal Reserve could raise rates to more than 6%. . And even if the prices of everything keep rising? It’s hard to imagine what the Fed will do next.
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