Welcome back,

US jobless claims dropped to their lowest level in four weeks, Eurozone core inflation accelerated again, and yet the ECB President doesn’t think any eurozone countries will fall into a recession.…this year.

Let’s keep it concise.

Market Headlines 👀

• Wells Fargo (WFC) plans to cut more than 500 jobs in its mortgage unit.

• North Korean hackers stole a record $1.7B of crypto last year.

• The EU banned TikTok from its executives’ devices

• Google (GOOGL) is planning to update the design of its Workspace products.

• Former Mastercard (MA) CEO Ajay Banga will be nominated by President Biden in a surprise pick to be the next president of the World Bank.

• The second revision of US Q4 GDP came in at 2.7% (annual rate; exp. 2.9%).

• The core PCE index, the Fed's preferred inflation gauge, was firmer than previously estimated. It rose at a 4.3% annualized rate, up from an earlier estimate of 3.9%.

• Core inflation was revised to 4.8% YoY (initially reported 4.7%).

• Initial jobless claims decreased to 192k (exp. 200k; prior week 194k).

• Eurozone CPI fell from 9.2% to 8.6%, but Core CPI hit a new record of 5.3%.

Earnings 💸

• Alibaba (BABA):

  • EPS: ¥19.26 beats (exp. ¥16.57)

  • Revenue: ¥247.76B beats (exp. ¥245.87B)

• Dominoes (DPZ)

  • EPS: $4.43 beats (exp. $3.97)

  • Revenue: $1.39B misses (exp. $1.43B)

• Grab Holdings (GRAB)

  • EPS: -$0.10 misses (exp. -$0.07)

  • Revenue: $502M beats (exp. $405.39M)

• MercadoLibre (MELI)

  • EPS: $3.25 beats (exp. $2.32)

  • Revenue: $3B beats (exp. $2.96B)

• Block (SQ)

  • EPS: $0.22 misses (exp. $0.28)

  • Revenue: $4.65B beats (exp. $4.57B)

• Beyond Meat (BYND)

  • EPS: -$1.05 beats (exp. -$1.13)

  • Revenue: $79.90M beats (exp. $78.10M)

• Booking Holdings (BKNG)

  • EPS: $24.74 beats (exp. $22.24)

  • Revenue: $4.05B beats (exp. $3.89B)

• Carvana (CVNA)

  • EPS: -$7.61 misses (exp. -$2.19)

  • Revenue: $2.84B misses (exp. $3.09B)

Recap Around the Street 🧠

The US housing market just got hit with its biggest six-month wipeout since 2008. American homeowners have lost $2.3T in market value since June. Meanwhile, higher interest rates have driven down demand in the formerly red-hot housing market.

If ‘08 (or The Big Short) taught us anything, it’s that this kind of housing price cool down usually results in recessions.

Eurozone headline (8.6%) and core (5.3%) inflation were both 0.1 percentage points higher in January than initially reported. The European Central Bank President Lagarde is often compared to Powell, just lagged three months. This week, she announced that in 2023, there will be no eurozone countries in recession. But unlike the US, Eurozone core CPI still hasn't peaked.

Nvidia’s earnings (NVDA) were slightly delayed yesterday, but maybe because it wanted all the attention and praise on its big announcement. The company reported gains of almost $200B in value this year.

You may be sick of hearing about AI already this month, but their investors won’t be anytime soon. NVDA can thank all the buzz surrounding AI for beating expectations.

The 1-year Treasury Yield is squarely above 5% for the first time in years. And that means markets are panicking about short-term interest rates. This week marked the third largest week of bonds purchased by private BofA clients…ever (BofA). On the other side, you have some of the largest short interest against bonds ever. That’s because If a recession comes, bonds traditionally become investors’ haven.

Meanwhile, short interest for the typical stock remains extremely low.

Market Preview 🎞️

• BOJ governor nominee Kazuo Ueda will appear in front of Japan’s lower house, Friday

• US PCE deflator, personal spending, new home sales, University of Michigan consumer sentiment, Friday

  • All eyes will be on the Personal Consumption Expenditures (PCE) price index — the Fed's most closely watched assessment of how quickly prices are rising across the economy.

• For some weekend reading, check out Benjamin Lavine’s analysis on why the conventional consensus for a hard landing in 2023 has yielded to the new narrative of “no landing” or “the big flip”.

Thats all for this week, folks! We’ll be back at the same time Monday with a curated list of important news, economic data and market highlights. 

🔔 Be the first to know. Ensure you never do more than one read if you:

• Move our emails (especially your subscriber introduction) to your primary inbox (Quick instructions).

• 👋 Say hi. Responding to our emails (if any) lets your email provider know to not block us from your main inbox.