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.
Following another round of economic data, the US economy doesn’t look like it wants to head into a recession anytime soon. Economists expected a slight increase in jobless claims. Initial jobless claims rose to 216,000, slightly above the 222,000 estimate. The number of continuing claims is still around 1.67million. This round of readings has a strong seasonal impact, so claims should begin to rise after holidays.
The final Q3 GDP readings came in at 3.2%. Core PCE was 2.3% higher. Q3 GDP came in at 3.2%. Personal consumption was 2.3% higher, and core PCE was slightly higher.
Wall Street continues to price in one more rate rise at February’s FOMC meeting. But, if data does not change, a March increase should be priced in.
Micron’s earnings did not provide any optimism for the chip sector as they struggle with…