🧸A tiny rebound that lacks strength🎲

The equity market rebounded on Tuesday as investors shrugged off the surprising decision by the Bank of Japan to expand the yield control band. However, the stock market remained somewhat muted throughout the session, and Nasdaq swung between losses and gains. 

Higher rates are a headwind for stocks, and with Bank of Japan’s latest move, it signals that borrowing cost is likely to rise worldwide as most central banks appear to have a coordinated action. It is significant because it was seen as the bastion of easy monetary policy, and some labelled it as “Japan’s pivot” in its latest decision.

The SPY appeared to find strength at 381 as it tried to recover lost ground. While we see further robust support at around 374-376 regions, we remain cautious in a challenging macro environment, especially when we have more upcoming economic data. 

🧮FedEx hinting at a softer economy🗽

Investors eyeing a splendid result from FedEx have reasons for disappointment. Unfortunately, the latest earnings continued to be hammered by a weaker economy and diminishing volumes. 

Some say logistics is the economy’s heartbeat, and money is the blood in the veins of capitalism. FedEx is indisputably one of the better barometers of the global economy’s health. Let’s dive into some quick results. 

Based on a yearly comparison, volumes dived about 12% for domestic and international express daily packages. While volume had decreased, it is mitigated by higher pricing, and thus, operating profit margins remain healthy as it improves by around 7% on a year-over-year comparison. 

The earnings are strong, but earnings guidance is light. Earnings per share are expected to hit around $13 to $14, but Wall Street expects a firm baseline of $14 per share. 

Although the results were less severe than anticipated, it could still be the onset of corporate earnings recession to come. 

💎Nike: Just Do it (again)📊

Shares of the athletics products giant jumped after it smashed quarterly earnings and revenue, although margins are tighter to cope with higher costs. Inventories did rise on a yearly comparison but zooming into a quarterly analysis shows a decline. Thus, it does hint at some underlying improvement. 

Notably, digital sales are healthy too. However, its sales in China, which is its third-largest market by revenue, fell 3% compared to a year ago. This is unsurprising, given the strict Covid-19 restrictions in China that have dampened consumerism. 

Pika World continues to favour Nike’s strategy of becoming a direct-to-consumer brand by improving its digital sales flavour to its global consumers. 

📮What’s on the menu today?📖

At 11 pm, we will welcome CB Consumer Confidence for Dec. Do expect a moderate rise to 101.0 from 100.2. 

Existing home sales for Nov will arrive simultaneously and should soften to 4.2M from 4.43M. 

It is 21 December, Wednesday, at 9 am in Singapore and 8 pm in New York. We see some bottoming signs in the market, but with more economic data surfacing, it can soon prove to be a sea of turbulence. Pika World wishes all friends a fruitful day ahead!