Wall Street Breakfast: Looking Back At 2022

Trending 8 months ago

Wall Street Breakfast illustration picture

Listen connected the go! A regular podcast of Wall Street Breakfast volition beryllium disposable by 8:00 a.m. connected Seeking Alpha, iTunes, Stitcher and Spotify.


Looking backmost astatine 2022

Enjoy different recap of Wall Street Breakfast's hottest headlines and apical stories from the 2nd fractional of 2022. We besides privation to springiness a shoutout, and a convey you, to each of our subscribers for your thoughtful feedback, comments and for opening WSB successful your inbox each morning. Our readership grew by implicit 1 cardinal subscribers this past year, broadening our assemblage to 3.4 cardinal strong! Wishing everyone a Happy New Year, and beryllium connected the lookout adjacent week for a peculiar variation covering the 2023 investing outlook.


Inflation nation: The Consumer Price Index peaked astatine an yearly clip of 9.1%, marking the fastest gait of ostentation successful 4 decades. At the time, the cardinal slope said it didn't privation to hazard much entrenched expectations, and continued to hike rates by 75 ground points (there was adjacent speech of a 100 bps summation astatine 1 point). "These complaint hikes person been ample and they person travel quickly, and it's apt that their afloat effect has not been felt by the economy," Fed Chair Jay Powell declared astatine the monthly FOMC meeting.

Oil for security: With an vigor situation playing retired astatine home, President Biden traveled to Saudi Arabia to reassert America's beingness successful the Middle East. The travel was a large argumentation U-turn for Biden, who has antecedently labeled the Kingdom a "pariah" and refused to speech with Crown Prince Mohammed bin Salman successful the aftermath of the sidesplitting of U.S.-based columnist Jamal Khashoggi. There was an evident knowing that the acme and a notable fist bump would pb to further Saudi crude production, but Riyadh aboriginal scrapped a paltry boost to OPEC+ production, and adjacent deepened its cuts by a whopping 2M barrels per day, oregon astir 2% of planetary supply.

The lodging story: The overheated U.S. lodging marketplace started to chill down successful what immoderate successful the manufacture called a existent property shakeout. Sales of antecedently owned homes fell 5.4% M/M successful June to 5.12M units, according to the National Association of Realtors, and were 14.2% little erstwhile compared to the aforesaid period a twelvemonth ago. At those levels, income fell to their slowest gait since June 2020, erstwhile buying enactment dropped concisely astatine the commencement of coronavirus pandemic.

Revolving door: Things got brainsick implicit successful the U.K. arsenic Boris Johnson stepped down from his relation arsenic U.K. premier minister. It followed expanding unit to resign aft a bid of scandals, including "Partygate" and allegations of misleading the nationalist implicit the assignment of erstwhile lawman main whip Chris Pincher. A disastrous mini-budget from Liz Truss sent the lb to adjacent parity with the U.S. dollar, and she was lone successful bureau for 44 days earlier Rishi Sunak took the reins connected 10 Downing Street.


Inflation Reduction Act: After much than 15 hours of amendments and a "vote-a-rama" league that stretched implicit an full weekend, the U.S. Senate narrowly passed the Inflation Reduction Act. The measurement - which aimed to chopped authorities deficits and user aesculapian bills portion boosting clime spending - gave President Biden a legislative accomplishment up of midterm elections, and different triumph for his economical agenda, aft Congress pulled done connected the Chips for America Act. The measure somewhat embodied earlier incarnations of the Build Back Better plan, albeit with a terms tag of astir $430B (in spot of $3.5T, and a revised mentation of $2.2T).

The Office: While Apple (AAPL) attempted to get its employees back to the office, different companies gave up connected their brick-and-mortar institutions. Lyft (LYFT) said it would rent retired astir fractional of its bureau spaces successful New York City, Nashville, San Francisco and Seattle, arsenic it doubled down connected a "fully flexible" enactment policy. In fact, the mean workplace occupancy complaint successful the top-10 U.S. metro areas deed 43.5% successful July, down from implicit 95% earlier the pandemic began, according to Kastle Systems, which collects regular information connected however galore workers swipe into bureau buildings.

Dire straits: Taiwanese person Tsai Ing-wen greeted U.S. House Speaker Nancy Pelosi astatine the statesmanlike bureau successful a high-stakes sojourn that enraged Beijing. Pelosi reaffirmed a pledge that the U.S. wouldn't wantonness Taiwan, saying solidarity was much important than ever successful a "world [that] faces a prime betwixt autocracy and democracy." The 2 besides discussed deepening economical practice and proviso concatenation resilience, portion the White House sought to region itself from the sojourn and emphasized that the travel does not awesome a alteration successful its 'One China' policy. Beijing responded with live-fire subject drills and sanctions connected Taiwan.

Revving the QT engine: Fallout from the economical symposium successful Jackson Hole dented a summertime rally for the markets, portion investors had their eyes connected much play stemming from the cardinal bank. The Federal Reserve began to rise the throttle of its quantitative tightening programme by picking up the gait astatine which it unwinds its equilibrium sheet. The determination was a stark reversal of pandemic-era enslaved buying, which saw the cardinal slope astir treble its equilibrium expanse to astir $9T from $4.2T implicit the past 2 years.


Energy shocks: European vigor ministers convened successful Brussels arsenic an vigor situation deepened crossed the bloc up of the winter. A toolbox of measures was created that included authorities support, terms caps and windfall revenues, portion rationing and trading suspensions were besides discussed. Elsewhere, EU subordinate states rushed to implicit an eighth circular of sanctions arsenic Vladimir Putin announced a "partial mobilization" that conscripted arsenic galore arsenic 300,000 troops, portion Russia stopped pumping state done Nord Stream 1, earlier the pipeline strategy reported extended harm that authorities classified arsenic an enactment of sabotage.

The Merge: The crypto assemblage celebrated a large milestone for the Ethereum blockchain, which transitioned from the proof-of-work (PoW) statement mechanics to a proof-of-stake (PoS) model. The determination aimed to trim the powerfulness needed to unafraid Ethereum by astir 99.95%, easing the concerns of those disquieted astir the biology impacts of crypto (Ethereum presently emits arsenic overmuch c arsenic Singapore and its full vigor depletion is akin to the Netherlands). ETH (ETH-USD) issuance besides decreased (a.k.a. Triple Halving), portion manufacture players further decentralized the web by securing Ethereum astatine home, taking immoderate power distant from the institutions and blase miners.

'Working connected the Railroad': Railway unions yet came to a tentative labour statement that would avert a damaging strike, which was acceptable to outgo the U.S. system an estimated $2B per day. The Association of American Railroads said the woody would springiness obstruction employees a 24% wage summation during the five-year play from 2020 done 2024, arsenic good arsenic an contiguous payout that averages astir $11,000, but the declaration was aboriginal rejected by unit owed to sick-leave policies. Congress acted rapidly to hindrance obstruction companies and their employees to the erstwhile colony to "avoid the impending, devastating economical consequences for workers, families, and communities crossed the country."

Downsizing: The slowdown successful tech went connected afloat show aft Facebook genitor Meta Platforms (META) announced plans to trim headcount for the archetypal clip ever. The societal web went connected to shed 11,000 jobs, oregon astir 13% of its staff, amid an advertizing slump that was exacerbated by Apple's (AAPL) iOS privateness changes. Meta is besides waiting for its large investments successful virtual world (Oculus), the metaverse (Horizon Worlds) and short-form video (Reels) to carnivore fruit, arsenic maturation peaks crossed Facebook, Instagram and WhatsApp. With macroeconomic headwinds contiguous elsewhere successful the sector, "tech layoffs" materialized into 1 of the large themes of 2022.


Brace for impact: The cleanup from Hurricane Ian wasn't pretty, and it was the worst of what became 1 of the costliest Atlantic hurricane seasons connected record. Floridians were urged to evacuate earlier Ian crashed into Cayo Costa arsenic a Category 4 hurricane, with tempest surges reaching arsenic precocious arsenic 18 feet successful immoderate coastal areas and upwind speeds of up to 155 mph. It yet led to 157 fatalities, 146 of which were successful Florida, arsenic good arsenic extended infrastructure and spot losses, with insured damages valued astatine $50B-$65B.

'Bird is freed': A caller epoch astatine Twitter (TWTR) translated into caller enactment and Elon Musk was speedy to update his level bio to "Chief Twit." The billionaire yet completed his $44B acquisition of the societal network, prompting an enforcement exodus and departure of fertile and record employees. Musk has since pledged to measurement down from the apical role, is attempting to determination towards subscriptions to marque money, and triggered continuous play from his abrupt argumentation changes. On his archetypal time aft the takeover, Musk showed up by carrying a room descend into Twitter's San Francisco headquarters, joking "let that descend in."

Lighting up: While they couldn't prolong the gains, traders bid up large cannabis companies pursuing comments made by President Biden successful regards to a reappraisal of marijuana arsenic a Schedule I substance. 38 U.S. states person already legalized cookware either medically oregon recreationally, but it is inactive amerciable successful immoderate states and astatine the national level. Biden besides pardoned 6,500 individuals convicted of "simple marijuana possession," noting that it doesn't marque consciousness that cookware is classified astatine the aforesaid level arsenic heroin. 1 successful 6 Americans are presently smoking marijuana, according to a Gallup poll from the summer, which highlights however the times are rapidly changing.

Grain deal: Russia agreed to instrumentality to a Turkish and U.N. brokered statement that allowed the shipment of millions of tons of Ukrainian atom done the Black Sea. It had antecedently pulled retired of the woody pursuing an alleged Ukrainian drone onslaught successful Crimea, but said "written assurances" from Kyiv guaranteed the humanitarian maritime corridor would not beryllium utilized for subject purposes. Wheat and maize futures, arsenic good arsenic different commodities, went connected a chaotic thrust successful effect to the developments, with Ukraine being traditionally referred to arsenic the "Breadbasket of Europe."


#Midterms: No reddish question materialized successful a cardinal U.S. midterm predetermination that saw Democrats yet people a 51-49 spot bulk successful the Senate (following Raphael Warnock's victory successful Georgia). Congressional gridlock inactive lies ahead, with the GOP taking power of the House of Representatives. A wide bulk for Senate Democrats could inactive springiness the enactment much flexibility connected passing authorities by lessening the power of centrist Sens. Joe Manchin and Kyrsten Sinema, portion Democrats volition person outright power of Senate committees and won't beryllium bound to a power-sharing statement with the GOP.

Crypto collapse: One of the biggest stories of the period (and possibly the year) was the meltdown of FTX International, oregon what immoderate successful the marketplace called a "Lehman Brothers" infinitesimal for the crypto industry. Once valued astatine $32B and the third-largest crypto speech by trading volume, FTX froze withdrawals amid an $8B shortfall pursuing a implicit nonaccomplishment of firm controls that shook the unregulated crypto industry. It's a infinitesimal of irony for the steadfast led by Sam Bankman-Fried, which itself served arsenic a achromatic knight this past summertime to rescue respective crypto players including BlockFi, Voyager Digital and Celsius. SBF is present awaiting proceedings successful U.S. aft being extradited from the Bahamas.

NATO membership: At a two-day summit successful the Romanian superior of Bucharest, the North Atlantic Treaty Organization doubled down connected a vow to marque Ukraine a subordinate of the subject alliance. It was 14 years agone (in the aforesaid city) that overseas ministers archetypal pledged that Kyiv would yet go a constituent, and they inactive "firmly basal down our commitment." Russian rocket and drone attacks person continued to people civilian infrastructure crossed the country, with strikes that person heavy damaged Ukraine's power, h2o and vigor infrastructure.

Zero-COVID: Three years aft the archetypal COVID-19 lawsuit was reported successful Wuhan, China began letting up connected its strict coronavirus stance arsenic discontent spread crossed the country. Policies changed rapidly wrong weeks, with targeted lockdowns, testing, quarantine requirements and question restrictions each being tossed retired the model by the government. With exigency rooms and hospitals overrun, economists are trying to measure however the accelerated easing volition interaction the world's second-largest economy, portion the globe worries astir the virus' untracked dispersed and imaginable caller variants.


Meet C919: The Commercial Aircraft Corporation of China, amended known arsenic COMAC, delivered its archetypal domestically-developed rider pitchy to motorboat lawsuit China Eastern Airlines (CEA). The C919, akin to the Airbus (OTCPK:EADSY) A320 and Boeing (BA) 737 narrow-body pitchy families, brings China a measurement person toward its ambitious extremity of becoming a planetary civilian aerospace player. The plane, which underwent 14 years of development, is expected to marque its maiden commercialized formation successful the spring, with a travel betwixt Shanghai and the superior Beijing.

Cashing successful connected chips: Taiwan Semiconductor Manufacturing (TSM) made past with 1 of the largest overseas investments successful the United States. The institution announced plans for a 2nd spot works successful Arizona (increasing its concern successful the authorities to $40B), which would present capable chips to conscionable U.S. yearly request of 600K wafers per year. "It's the instauration of our idiosyncratic electronics, and besides the aboriginal of quantum computing and AI," said Ronnie Chatterji, White House Coordinator for CHIPS Implementation astatine the National Economic Council. "That's the explanation of proviso concatenation resilience. We won't person to trust connected anyone other to marque the chips we need."

Fusion revolution: The U.S. Department of Energy revealed a large technological breakthrough, known arsenic a nett vigor summation (or people gain), that could shingle up however we powerfulness our world. The large milestone was achieved astatine the Lawrence Livermore Laboratory successful California, wherever scientists utilized the world's largest laser to nutrient an effect known arsenic magnetic confinement fusion. A tiny magnitude of hydrogen plasma, held successful spot by almighty magnets, was heated to utmost temperatures - resulting successful the fusing of atomic nuclei and 20% much vigor than was utilized successful the lasers.

Bitter cold: Travel was upended from seashore to seashore implicit the Christmas vacation weekend, arsenic snow, upwind and subfreezing temperatures enveloped overmuch of the country. That derailed the plans for galore a flyer, arsenic good arsenic the operations of airlines that saw planes frost overnight and airports tally retired of abstraction for de-icing. No 1 appeared to beryllium deed arsenic hard arsenic Southwest Airlines (LUV), whose scheduling systems went down for astir a week arsenic travelers complained of unanswered calls to lawsuit work to rebook flights and retrieve baggage (it besides sparked an probe by the U.S. Department of Transportation).

Today's Markets

In Asia, Japan closed. Hong Kong +0.2%. China +0.5%. India -0.5%.
In Europe, astatine midday, London -0.5%. Paris -0.7%. Frankfurt -0.8%.
Futures astatine 6:30, Dow -0.3%. S&P -0.3%. Nasdaq -0.4%. Crude -0.2% to $78.25. Gold -0.1% to $1824.50. Bitcoin -0.6% to $16,502.
Ten-year Treasury Yield +2 bps to 3.85%

Today's Economic Calendar

This nonfiction was written by

Wall Street Breakfast illustration picture

Wall Street Breakfast, Seeking Alpha's flagship regular concern quality summary, is simply a one-page summary that gives you a accelerated overview of the day's cardinal fiscal news. It's designed for casual readability connected the tract oregon by email (including connected mobile devices), and is published earlier 7:00 AM ET each marketplace day. Wall Street Breakfast readership of implicit 1.6 cardinal includes galore from the investment-banking and fund-management industries. Sign up present to person the Wall Street Breakfast successful your inbox each concern day: http://seekingalpha.com/account/email_preferences

Source Seekingalpha