The Grinch selloff is firmly in place after Micron delivered a gloomy outlook and as better-than-expected US economic data supported the Fed’s case for more ongoing rate increases. Global coordinated central bank tightening has yet to fully impact most of the economic readings for the major economies and that should have investors nervous over earnings downgrades and credit risks.
Data from the USA
Following another round of economic data, the US economy doesn’t look like it wants to head into a recession anytime soon. The economists had expected that the number of jobless claims would not increase as much. Initial jobless claims rose to 216,000, slightly above the 222,000 estimate. The 1.67 million number of claims for continuing benefits is stable. This round of readings is highly seasonal so claims should increase after the holidays.
The Q3 GDP numbers were quite impressive. Q3 GDP came in at 3.2%. Personal consumption was 2.3% higher, and core PCE was slightly higher.
Wall Street is still pricing in another rate hike at February’s FOMC meeting. However, if data doesn’t break, then a March hike should be priced in.
Micron’s earnings did not provide any optimism for the chip sector as they struggle with…