🎯Hawkish comments from the Fed🎲

Despite the upcoming fresh inflation data and corporate earnings in the last week, investors plough into the equity market, especially in the final 10 minutes of trading, Nasdaq rose sharply. 

The dominant narrative had stayed the same: the Fed will still raise rates multiple times this year and expect the terminal rate to be above 5%. One can observe a prolonged economic slowdown to pay for the price of lower inflation. 

As Uncle Powell spoke in Sweden, global traders listened carefully. His stance remained consistent: “price stability is the bedrock of a healthy economy”. While the statement is hawkish, it is still much expected from his mouth. Compared to the recent comments from Fed President Bostic and Mary Daly, Uncle Powell’s remarks had a mild downside impact on the market. 

🕹Retrenchment is here again, but hold on to your negativity📦

Coinbase announced plans to jump into the bandwagon of slimming down its headcount. It will cut more than 20% of its staff strength. While Pika World believes this is good news to help weaken the labour market, there is true resilient strength in the job market. A dive into the recent job figures showed that while those sectors that benefited from the stay-at-home pandemic era are cutting jobs, the economic reopening beneficiary sector is hiring at a speed that outpaces retrenchment. 

Hence, one can expect a still robust labour market and a less rosy economic landscape—something of an ironic combination in a weirdo situation as of current. 

📱Apple: Make my chips📁

Several suppliers to Apple have been hit hard as the electronic consumer goods giant planned to produce more of its chips. It is a growing heat for many of Apple’s suppliers, who have relied on the giant for a large bulk of their revenue. 

First on the list is Broadcom which produced a combined chip that helped to support Wi-Fi and Bluetooth functions and may see its supply to Apple end in 2025. Then we have Qualcomm, which supplied a cellular modem chip that Apple is exploring replacing by 2024-2025. 

The move is likely to hurt Qualcomm more than Broadcom. Pika World is mindful of a potential slowdown in discretionary spending that may hurt Apple’s upcoming earnings. 

There isn’t much economic data, and we look forward to the upcoming inflation data at the end of the week. 

It is 11 Jan, Wednesday, at 8.55 am in Singapore and 7.55 pm in New York. Let us welcome a splendid trading week ahead!