Amazon Stock Falls on Mixed Earnings Report and Weak Forecast. AWS Missed Too.

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Ford (F) earnings Q4 2022

Ford CEO Jim Farley takes off his mask at the Ford Built for America event at Fords Dearborn Truck Plant on September 17, 2020 in Dearborn, Michigan.

Nic Antaya | Getty Images

DETROIT- Ford-Motor is set to report its fourth-quarter earnings after the bell Thursday. Here’s what Wall Street is expecting, according to Refinitiv consensus estimates:

  • Adjusted earnings per share: 62 cents
  • Automotive revenue: $40.37 trillion

In October, Ford confirmed its prior full-year guidance of adjusted earnings before interest and taxes of between $11.5 billion and $12.5 billion. Through the first three quarters of the year, its brought in $7.9 billion, led by its North American operations.

If Ford meets or exceeds Wall Street’s top- and bottom-line expectations, EPS would more than double the 26 cents it reported for the same period a year earlier. Revenue would be an increase of 14.5% from the fourth quarter of 2021.

While investors will be monitoring the fourth-quarter results for signs of any waning consumer demand or profit dilution, Ford’s 2023 guidance is expected to be more of a focus.

Wall Street expects Ford’s full-year 2023 adjusted earnings per share outlook to mark a nearly 16% decline from 2022, according to Refinitiv estimates. That’s despite forecasting full-year revenue up 3.4% year over year to more than $151 billion, signaling lower operational profit compared with recent years.

Automakers have posted record or near-record results during the coronavirus pandemic amid a tight supply of new vehicles and resilient consumer demand. But that scenario is slowly normalizing, leaving new vehicle prices and profits in flux.

On Monday, Ford cut the price of its electric Mustang Mach-E, an early sign of a burgeoning EV price war spurred by You’re here.

Earlier Thursday, Ford reported January new vehicles sales that showed slight improvement over the same period last year.

There’s pressure on Ford to deliver a strong fourth quarter and relatively solid guidance. Crosstown rival General Motors on Tuesday significantly outperformed Wall Street’s expectations. The automaker also forecast stronger-than-expected 2023 results, including adjusted earnings before interest and taxes of $10.5 billion to $12.5 billion and adjusted earnings per share of between $6 and $7.

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European Central Bank raises rates by 50 basis points, pledges further hike in March

Christine Lagarde, president of the European Central Bank speaks at an event.

Bloomberg | Bloomberg | Getty Images

The European Central Bank on Thursday confirmed expectations of a 50 basis point interest rate increase, taking its key rate to 2.5%.

In a statement, it pledged to “stay the course in raising interest rates significantly at a steady pace” and, in unusually firm language, said it intended to hike by another 50 basis points in March.

It said keeping rates at restrictive levels would control price rises by dampening demand and keeping inflation expectations under constrained. Decisions at future meetings will be data-dependent, it added.

The move follows four hikes in 2022 which brought euro zone rates out of negative territory for the first time since 2014.

Euro zone inflation fell for the third straight month in January, flash figures published Wednesday showed, but headline inflation remained high at 8.5%. Core inflation, which excludes energy and food, was flat at 5.2%.

Attention now turns to Thursday’s speech and press conference by Lagarde, which begins at 2:45 pm Frankfurt time, for an indication of the central bank’s latest outlook on the economy and further details of its plans for hiking and quantitative tightening.

In December, it announced that from March it would begin to reduce its 5 trillion euro ($5.49 trillion) balance sheet by 15 billion euros per month on average until the end of June 2023.

On Thursday, he said that in line with current practice he would continue partial reinvestments of its maturing debt.

“The remaining reinvestment amounts will be allocated proportionally to the share of redemptions across each constituent program of the APP (Asset Purchase Programme) and, under the public sector purchase program (PSPP), to the share of redemptions of each jurisdiction and across national and supranational issuers,” its statement said.

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Nasdaq-100 futures rise as Meta surges on quarterly revenue beat

Futures linked to the Nasdaq-100 were higher Thursday, boosted by sharp gains from Facebook-parent Meta Platforms.

Nasdaq-100 futures gained 1.3%. S&P 500 futures jumped 0.5%. Futures connected to the Dow Jones Industrial Average ticked down 43 points, or 0.1%.

Meta surged more than 19% in premarket trading after reporting a fourth-quarter beat on revenue and announcing a $40 billion stock buyback. That helped investors look past losses in the business unit overseeing the metaverse.

The moves follow a positive day for the three major indexes. The S&P 500 gained 1.05% on Wednesday, while the Nasdaq Composite closed 2% higher. Meanwhile, the Dow eked out a narrow 0.02% gain after dropping more than 500 points earlier in the day.

Wednesday’s gains came after the Federal Reserve announced a 0.25 percentage point interest rate hike was announced. That marked a pull back from the 0.5 percentage point increase at December’s meeting, bolstering investor optimism that inflation is cooling enough for the central bank to take notice. But the central bank gave no indication of an upcoming pause in rate hikes.

“Traders think the Fed is behind the curve and that inflation threat is receding rapidly,” said Jamie Dutta, market analyst at Vantage. “The Fed is open to changing its mind and may have to if the economy loses momentum.”

Investors will watch Thursday for earnings reports from household names including Apple, Alphabet, Amazon, Ford Motor and Starbucks. They will also look for data on jobless claims, productivity, labor costs and factory orders.



Bitcoin Pauses as Crypto Traders Await the Fed Decision. Brace for Volatility.

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Gold demand surged to 11-year high on ‘colossal’ central bank buying

Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023.

Alexander Manzyuk | Reuters

Gold demand soared to an 11-year high in 2022 on the back of “colossal central bank purchases, aided by vigorous retail investor buying,” according to the World Gold Council.

Annual gold demand jumped 18% to 4,741 tons (excluding over-the-counter or OTC trading) across the year, the largest annual figure since 2011, fueled by record fourth-quarter demand of 1,337 tons.

Key to the surge was a 55-year high of 1,136 tons bought by central banks across the year, the industry-backed group revealed, noting that the majority of these purchases were “unreported.”

This marked a 152% increase from 2021, when central banks bought just 450 tons of gold, and the World Gold Council attributed the spike to geopolitical uncertainty and high inflation.

“Central bank net purchases in Q4 totaled 417t, lifting H2 total buying to 862t. Echoing Q3, data for the final quarter of the year was again a combination of reported purchases and a substantial estimate for unreported buying,” the WGC said.

“Should more information about this unreported activity become available, these estimates may be revised.”

Investment demand for gold increased by 10% to 1,107 tons, while holdings of gold ETFs (exchange-traded funds) saw smaller outflows in 2022 than in the previous year.

Jewelry consumption dropped 3% in 2022 to 2,086 tons, with much of the weakness concentrated in the fourth quarter as gold prices rallied.

Total annual gold supply inch higher in 2022 to 4,755 tons, with mine production notching a four-year high of 3,612 tons.

Central bank bulk buying

“This marked a banner year for central bank buying: 2022 was not only the thirteenth consecutive year of net purchases, but also the second highest level of annual demand on record back to 1950, boosted by +400t ​​demand in both Q3 and Q4,” the WGC said.

The group’s annual survey of policymakers revealed that the key drivers behind holding gold were its “performance during times of crisis” and its “role as a long-term source of value.”

“It’s hardly surprising then that in a year scarred by geopolitical uncertainty and rampant inflation, central banks opted to continue adding gold to their coffers and at an accelerated pace.”

The majority of the central bank buying in 2022 came from emerging markets, with the Central Bank of Turkey the largest buyer at a record 542 tons. China, India, Egypt, Qatar, Iraq, the UAE and Oman all significantly boosted their gold reserves over the year.

‘It may be different this time’

Despite a difficult backdrop of rapid hikes to interest rates and a strong U.S. dollar for much of the year, the fourth-quarter resurgence was enough to see gold prices eke out a slight gain for 2022, with a 3% quarterly gain taking the precious metal to a 0.4% annual increase.

Gold typically weakens in times of rising interest rates and a strong dollar, partly because it is priced in US dollars despite most demand originating from outside the US, Wells Fargo highlighted in a note last week. This means that the purchasing power of non-US buyers is reduced and harms global gold demand.

Wells Fargo Head of Real Asset Strategy John LaForge also noted that since gold is a non-interest-bearing asset, it becomes less attractive to institutional investors who can buy Treasurys and other interest-bearing assets when rates rise.

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Gold started 2022 well, up 12% through March, but dropped off once the US Federal Reserve began aggressively hiking interest rates to rein in inflation, leading to a stronger dollar and forming significant headwinds for the precious metal.

The spot gold price is also up more than 5% so far in 2023, trading at around $1,926 per troy ounce as of Wednesday morning. LaForge said that while Wells Fargo currently holds a neutral view on precious metals versus other commodities, the US banking giant does not necessarily expect poor performance.

Wells Fargo’s year-end target range remains $1,900 – $2,000, but LaForge said “it may be different this time.”

“We may even need to increase our year-end 2023 target range should the US dollar remain range bound and we gain confidence that rate hikes are near their end,” he added.

Gold becoming ‘very expensive’ for consumers

James Steel, chief precious metals analyst at HSBCsaid rising prices could eventually begin to compress demand in 2023 as gold gets “very expensive for consumers,” especially since around 70% of buying is concentrated in emerging markets.

“On the ground buying — coins, bars, jewelry — is going to get increasingly expensive and this may very well at least curb the rally, so I would certainly be cautious, and HSBC’s camp is that the Fed will maintain rates and not cut them in the second half of the year,” he said.

“If that is realized as 2023 unfolds then that could take some of the oxygen away from the gold market as well.”



Central banks set to signal interest rate glide path in crucial week

A screen displays the Fed rate announcement as a trader works on the floor of the New York Stock Exchange (NYSE), November 2, 2022.

Brendan McDermid | Reuters

The US Federal Reserve, European Central Bank and Bank of England are all expected to hike interest rates once again this week, as they make their first policy announcements of 2023.

Economists will be watching policymakers’ rhetoric closely for clues on the path of future rate hikes this year, as the three major central banks try to engineer a soft landing for their respective economies without allowing inflation to regain momentum.

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All three banks are expected to re-emphasize commitments to returning inflation toward targets near 2%, but recent positive data have fueled hopes that central banks will eventually be able to slow the pace of rate hikes.

Nick Chatters, fixed income manager at Aegon Asset Management, said that the task for market watchers is to “telegraphically infer” from this week’s press conferences what Fed Chairman Jerome Powell and ECB President Christine Lagarde are thinking about the “terminal rate,” and how long they intend to keep monetary policy restrictive before starting to normalize.

The Federal Open Market Committee concludes its meeting on Wednesday, before the Bank of England and ECB deliver their decisions on Thursday.

The Fed

Since the FOMC’s December meeting, economic data showing an easing of wage growth and inflation pressures, alongside some more concerning activity growth signals, have strengthened the case for the Fed to enact a 0.25 percentage point rate hike — a marked downshift from the jumbo moves seen in 2022.

The market is now pricing in this eventuality, but the key question is what the FOMC will indicate about further rate hikes in 2023.

“We think the Fed’s path this year is best thought of in terms of a goal to be accomplished rather than a target level of the funds rate to be reached,” Goldman Sachs Chief US Economist David Mericle said in a note Friday.

“The goal is to continue in 2023 what the FOMC began so successfully in 2022 by keeping the economy on a below-potential growth path in order to steadily but gently rebalance the labor market, which should in turn create the conditions for inflation to settle sustainably at 2%.”

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Fed officials have indicated there is still a way to go before they are confident that inflation will settle at this level. Mericle said substantial “labor market rebalancing” will be needed, as the gap between jobs and workers is still around 3 million above its pre-pandemic level.

This will necessitate a slower growth path for a while longer. Goldman expects a 25 basis point hike on Wednesday, followed by two further rises of the same scale in March and May — in steps that would take the target rate for the Fed funds rate to a peak of between 5% and 5.25%.

“Fewer hikes might be needed if the recent weakening in business confidence captured by the survey data depresses hiring and investment more than we think, substituting for additional rate hikes,” Mericle said.

“But more hikes might be needed if the economy reaccelerates as the drag on growth from past fiscal and monetary policy tightening fades.”

The uncertainty over the growth pace could lead the Fed to “recalibrate” and find itself in a “stop-and-go” pattern on rates later in the year, he suggested.


The ECB has telegraphed a 50 basis point hike for Thursday and vowed to stay the course on tackling inflation, but uncertainty lingers around the future rate trajectory.

Euro zone inflation dropped for a second consecutive month in December, while Tuesday revealed that the bloc’s economy unexpectedly expanded by 0.1% in the fourth quarter of 2022, curbing recession fears.

The anticipated half-point hike will take the ECB’s deposit rate to 2.5%. The Governing Council is also expected to detail plans to reduce its APP (asset purchase program) portfolio by a total of 60 billion euros ($65 billion) between March and June.

In a Tuesday note, Berenberg projected that the ECB will “probably” confirm its prior guidance for a further 50 basis point hike in mid-March, followed by further tightening in the second quarter.

The German investment bank highlighted that, while there are positive signs in headline inflation, stickier core inflation — which came in at 5.2% in December — has not yet peaked.

“We expect the ECB to leave the size and number of its moves in Q2 open. The risks to our call for just one final 25bp rate hike in Q2 to take the deposit and main refinancing rates to peaks of 3.25% and 3.75%, respectively , on 4 May are tilted to the upside,” said Berenberg Chief Economist Holger Schmieding.

ECB president: Fiscal and monetary policy must work in conjunction with one another

“In line with the ECB’s recent ‘higher for longer’ mantra, ECB President Christine Lagarde will likely push back against market expectations that the bank will start cutting rates again late this year or in early 2024.”

Upon slowing its rate hikes from 75 basis points to 50 basis points in December, the ECB spooked markets with the assertion that rates would need to “rise significantly at a steady pace to reach levels that are sufficiently restrictive.” Schmieding said this award will be one to watch on Thursday:

“The ECB will probably confirm that it is progressing at a ‘steady pace’ (read: 50bp in March and possibly beyond) without pre-committing to either a 25bp or 50bp move in May,” Schmieding said.

“But as rates will now be 50bp higher than at the last ECB press conference, the doves may suggest that the ECB should now use a slightly softer term than ‘significantly’.”

The Bank of England

A key distinction between the task of the Bank of England and those of the Fed and ECB is the persistently bleak outlook for the UK economy.

The Bank previously forecast that the UK economy was entering its longest recession on record, but GDP unexpectedly grew by 0.1% in November after also exceeding expectations in October, suggesting the recession may not be as deep as promised.

However, the International Monetary Fund on Monday downgraded its projection for UK GDP growth in 2023 to -0.6%, making it the world’s worst performing major economy, behind even Russia.

Most economists anticipate a split decision among the Monetary Policy Committee in favor of another 50 basis point hike on Thursday — taking the Bank rate to 4% — but expect a more dovish tone than in recent meetings.

Barclays expects a 7-2 split vote in favor of one final “forceful” 50 basis point rise, with communications foreshadowing a step down to 25 basis points in March.

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“This may be signaled via removing, or softening, the ‘forceful’ component of the forward guidance. Such a tweak would be consistent with our call for a final two 25bp hikes in March and May, taking the terminal rate to 4.5%,” analysts at the British lender said in a note Friday.

Victoria Clarke, UK chief economist at Santander CIB, expects a far closer 5-4 majority at the MPC in favor of the 50 basis point hike, with the four dissenters split between “no change” and a 25 basis point increase. She said the Bank has “no easy options.”

“Given the concern over the damage embedded inflation would cause, we believe that a majority of the MPC will consider an increase in Bank Rate to 4.00% to be prudent risk management, but we still do not think it wishes to take Bank Rate far above this,” Clarke said in a note Friday.

Santander expects a “double goal dovish hike” in February and March, and Clarke suggested that Governor Andrew Bailey is “optimistically” watching falling headline inflation, while becoming increasingly worried about the prospects for the UK housing market.



Britain sets out plans to regulate crypto industry in wake of FTX collapse

British Prime Minister Rishi Sunak speaks during a Q&A at Teesside University, on Jan. 30, 2023.

Oli Scarff | Wpa Pool | Getty Images NewS

The UK formally laid out plans to regulate the cryptocurrency industry, with the government looking to rein in some of the reckless business practices that emerged over the past year and contributed to the demise of FTX.

In a widely-anticipated industry consultation launched Tuesday, the government proposed a number of measures aimed at bringing regulation of crypto asset businesses in line with that of traditional financial firms.

Among the proposals unveiled Tuesday was a move that would strengthen rules targeting financial intermediaries and custodians that store crypto on behalf of clients.

A big theme that emerged in 2022 was the rise of risky loans made between multiple crypto firms and a lack of due diligence done on the counterparties involved in those transactions.

The UK proposals would crack down on such activities, seeking to establish a “robust world-first regime strengthening rules around the lending of cryptoassets, whilst enhancing consumer protection and the operational resilience of firms,” ​​according to a statement out late Tuesday.

“We remain steadfast in our commitment to grow the economy and enable technological change and innovation — and this includes cryptoasset technology,” Andrew Griffith, economic secretary to the Treasury, said in a statement.

“But we must also protect consumers who are embracing this new technology — ensuring robust, transparent, and fair standards.”

The collapse of FTX has added urgency to global regulators’ attempts to govern the regulation-averse crypto space. The European Union and the US have already made proposals of their own to improve consumer protections in crypto.

In a Dec. 2 speech, Griffith said that “recent events in the crypto market reinforce the case for timely, clear and effective regulation.”

The implosion of FTX, which allegedly used customer money to make risky loans and trades, set off a chain reaction of bankruptcies for digital asset lending firms with exposure to the crypto giant, including BlockFi and Digital Currency Group’s Genesis Trading.

The proposals unveiled Tuesday would also enforce tougher transparency requirements on crypto exchanges to ensure they publish relevant disclosure documents and set out clear admission requirements for trading digital tokens.

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Another measure would relax strict rules on crypto advertisements, allowing firms with Financial Conduct Authority registration to issue their own promotions while the broader crypto regime is being introduced.

The regulatory move comes as crypto firms in both the UK and beyond are feeling the chill of a deep downturn known as “crypto winter.”

Companies are seeing their valuations slashed by investors after the blowup of FTX and a slump in crypto prices, while the industry has also been plagued by numerous rounds of layoffs. Last week, London-based crypto exchange Luno cut 35% of its workforce in a move impacting over 330 roles.

Regulation takes time. It will likely take years before the measures are approved by Parliament. The Financial Services and Markets Bill, which would recognize crypto assets as regulated products, is still making its way through Parliament. The law aims to make the country’s financial sector more competitive post-Brexit.

Nevertheless, even the simple display of being seen as taking action is important, according to some industry executives.

“Having a regulatory roadmap or regulatory direction of travel is going to be super useful for the UK in terms of being a crypto hub,” Julian Sawyer, CEO of Standard Chartered-backed crypto custody services firm Zodia Custody, told CNBC Tuesday in an interview .

Sawyer, who formerly co-founded British fintech firm Starling and led international expansion for crypto exchange Gemini, said it was also important to ensure “general alignment between global markets in terms of the approach to digital assets.”

He noted the European Union has gotten ahead of the game with its Markets in Crypto-Assets law, which is expected to come into force in 2024.

Bitcoin, which has stealthily climbed about 40% since the start of 2023, was trading flat Wednesday at a price of $23,103.

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Rishi Sunak, who took the reins as UK leader in October 2022, is seen by market players as a crypto-friendly prime minister, having previously said he’s “determined” to make the UK “the jurisdiction of choice for crypto and blockchain technology.”

As London looks to compete with EU financial hubs after Brexit, crypto could be a way for it to improve its chances, industry insiders said previously.

“There is an opportunity to provide clarity to the industry and allow it to play its role in achieving their mandate to encourage businesses to invest, to innovate, and to create jobs in the UK,” Jordan Wain, UK public policy lead at Chainalysis, told CNBC in November.

Sunak’s administration will consult on plans to introduce a new set of rules tailored to crypto companies, with a view to closing the consultation by Apr. 30, after which it will formulate more detailed rules.

WATCH: Has crypto winter thawed out?

Has crypto winter thawed out?



Stock futures tick lower as traders await the Federal Reserve’s latest rate hike decision

Traders on the floor of the NYSE

Source: NYSE

Stock futures slipped Tuesday evening as investors looked ahead to the Federal Reserve’s Wednesday meeting.

Futures tied to the Dow Jones Industrial Average shed 48 points or 0.14%. S&P 500 futures and Nasdaq Composite futures were down 0.20% and 0.37%, respectively.

The moves come after stocks jumped to end January on a strong note. The Dow Jones Industrial Average ended the day nearly 369 points higher, rising by 1.09%. The S&P 500 gained 1.46% to cap its best January performance since 2019. The tech-heavy Nasdaq Composite rose 1.67%, its best January performance in 22 years.

On Wednesday, the Federal Reserve will announce how much it is increasing interest rates in its latest effort to tame high inflation. Markets are expecting a 25 basis point, or 0.25 percentage point, bump from the central bank. On Tuesday, the employment cost index, a measure of wage increases, showed compensation rose 1% in the fourth quarter, less than the 1.1% estimate by Dow Jones.

Still, traders may be getting ahead of themselves in expecting a more dovish tone from the Fed, or looking for signs that a pause in hikes or even a pivot is coming soon.

“Aggressive tightening in 2022 has led to signs of decelerating inflation but from levels that remain unacceptably high,” Ron Temple, chief market strategist at Lazard said in a Tuesday note. “With a 25bps hike already discounted by markets, Powell’s task is to unambiguously signal the Fed’s commitment to tame inflation.”

The Federal Reserve will announce its decision Wednesday afternoon, followed by Chairman Jerome Powell’s comments.

Earnings season continues as well. Peloton and Meta Platforms are scheduled to report quarterly results on Wednesday.