Market 11/22: Consumer inflation expectations rise sharply

Consumer inflation expectations continue to rise

Short-term consumer inflation expectations rise from 4.4 to 4.5, and from 3.1 to 3.2 over 5-10 years (highest since 2011).

Consumer sentiment index at 61.3, higher than expected but still at 6-month low due to declining short- and long-term economic expectations.

Consumer buying conditions weakened across all areas, especially for household durable goods.

Consumers' rising inflation expectations caused bond yields to surge.

• 10Y T-bond yield rises again (after repeated declines and hitting 2-month low last week).

Durable goods orders drop sharply after defense spending normalizes

October durable goods orders plunge -5.4% MoM, after surging last month due to defense spending (+92.5% MoM September).

All defense orders from military and non-military aircraft (sharpest drop -55.1% MoM) and core orders all record sharp declines.

Initial jobless claims drop most since June

Initial jobless claims last week fell -24,000 to 209,000, below expected 225,000.

Continuing jobless claims this week dipped slightly from 1.862 million to 1.84 million, but still near 2-year high.

Mortgage rates drop sharply, boosting homebuying demand

30Y mortgage rate falls -20bps to 7.41% this week, largest drop in 4 weeks, spurring a surge in new home purchase applications.

• Mortgage applications index up 3.9%, largest increase since June.

Oil prices drop sharply despite strong US oil inventory build

API data update:

• Crude: +8.7 million barrels (forecast +100,000).

• Cushing: +858,000 barrels.

• Gasoline: +750,000 barrels (forecast -600,000).

• Distillates: -1.02 million barrels (forecast -600,000).

Gasoline prices have fallen sharply from summer highs, but still 21% above holiday week average.

However, oil prices still fell below $75/barrel after OPEC+ meeting delay.

NVIDIA ER: Record revenue ahead of AI frenzy

• Revenue: +34% Q/Q, reaches 18.1 billion USD (+$2.0B vs forecast).

• Gross margin: 74% (+4pp Q/Q).

• Operating margin: 57% (+7pp Q/Q).

• Non-GAAP EPS $4.02 (+$0.63 vs forecast).

• Q4 FY24 revenue guidance: 20 billion USD (+$2.2B vs forecast).

AI chip demand exceeds supply, boosting NVIDIA's data center revenue to 14.51 billion USD, up +279% YoY.

NVIDIA continues to far surpass competitors, becoming the semiconductor company with the largest market cap today.

Other news

• Uranium price rises above 80 USD/pound for the first time in over 15 years.

  • Rising Uranium price may affect nuclear power production costs => impacting stocks of companies in the sector.

  • Electricity costs may rise in regions using nuclear energy.

    

• AstraZeneca denies allegations related to Covid-19 vaccine after a vaccine user sues for compensation for severe side effects.

  

• Sam Altman officially returns to CEO position at OpenAI after a week full of drama.