💎The fear of recession and hard landing are brutal to ignore🎲

Equity markets were broadly lower on Thursday as investors are increasingly worried about an intentionally induced recession caused by the Fed’s aggressive monetary tightening policy. It comes at a time when earnings season arrived, and the latest job figure continued to show underlying strength in the labour market. 

This means a potentially more prolonged period of elevated inflation and gives the Fed less pace to tone down on its aggressive rate hike path. 

🧸Debt ceiling fight once more?🧮

Technically, the US had already reached its debt ceiling, which means yet another drama in Congress and the worry of another possible government default by the US government. 

US Treasury Secretary Auntie Yellen had informed lawmakers and had activated extraordinary measures to keep the government funded. Nonetheless, the dire outcome will be a sudden stop in government spending which will affect critical social assistance such as Medicare and even to the extent of military salary. Moreover, if such is to happen, it will further reduce the weak GDP growth of the economy, inducing an exogenous shock.

More importantly, it could mean the government missing its bond interest payment which will incur a credit event of a default, potentially raising its borrowing costs in the years ahead. Some estimates show that the interest payment due to such an event will be trillions. 

Pika World will be more cautious as the story unfolds. 

📱Netflix: Half passed result💻

Shares popped higher in the after-hour as the company registered a remarkably better-than-expected subscriber growth, which is investors’ primary metric of interest. The current CEO, Reed, will also be taking over as the executive chairman, paving the way for COO Greg Peters to be the co-CEO of the company. 

Revenue was in line with the company’s forecast, although a profit of 12 cents per share was shy of expectation. 

As the economy is threading towards a recession, discretionary spending is likely to be hurt, and thus, Pika World will be cautious of any massive accumulation in our current portfolio. 

📮What are our dishes today? 📖

At 10 pm, we will welcome FOMC member Harker to speak. 

Existing home sales data will arrive at 11 pm, and we should see another fall of 5.4%, lower than a prior period of -7.7%.

Other speakers like Fed Waller will also talk at 2 am. 

It is 20 Jan, Wednesday, at 9 am in Singapore and 8 pm in New York. The week has been a challenging trading period, but we are hopeful for a prosperous week as we celebrate our Chinese New Year. 

Gong Xi Fa Cai to all friends of Pika World!💰

From your lovely newsdesk friend,