11.22.23: Long-term inflation expectations highest since 2011

For Public Readers: Weekly Key U.S. and China brief market notes by Larry Cheung's Analyst Staff Team for our Public Email List

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Nov 22, 2023

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In our emails, we will provide the following coverage points:

Brief Overview of U.S. & China Markets
Macro Chart in Focus
U.S. & China Upcoming Economic Calendar
Chart That Caught Our Eye

U.S and China Markets Brief Snapshot 🇺🇸 🇨🇳

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S&P 500 Index: 4538.19

KWEB (Chinese Internet) ETF: $27.97

Analyst Team Note:
Nvidia's recent quarterly report surpassed analysts' expectations with a significant increase in revenue and profit, largely driven by the success of its AI-focused chips.
In the fiscal third quarter, which ended Oct. 29, revenue more than tripled to $18.1 billion, the company said. Adjusted profit was $4.02 a share. Analysts had predicted sales of about $16 billion and earnings of $3.36 a share.
The company's AI chips have gained widespread use, contributing to a more than threefold increase in revenue.
Additionally, Nvidia is adapting to export restrictions by developing new chips for the Chinese market and expects continued revenue growth, despite a potential short-term decline in sales to China.

Macro Chart In Focus

Analyst Team Note:

Upcoming Economic Calendar

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U.S Economic Calendar (Upcoming Data Points)

China Economic Calendar (Upcoming Data Points)

Analyst Team Note:
In November, U.S. short-term inflation expectations reached a seven-month peak, with Americans predicting a 4.5% annual price increase for the next year, an uptick from the previous 4.4% forecast.
Long-term expectations are at their highest since 2011, foreseeing a 3.2% rise over the next five to ten years.
Despite recent inflation softening, concerns persist about future inflation reversals, particularly in gas prices, with one-year expectations at their highest since June 2022.
The University of Michigan’s consumer sentiment index improved slightly due to better perceptions of personal finances, but overall economic outlook remains cautious.

Chart That Caught Our Eye

Analyst Team Note:
For those looking to proceed cautiously from here, one strategy could be to pick out single stocks. That could prove effective, given this month’s collapse in implied correlations between individual stocks.
“Current correlation and dispersion metrics suggest that despite the overbearing influence of top-down forces on global stock return variability, stock selection, as an investment style, is in, or approaching, a ‘sweet spot’,” according to Citigroup’s Chris Montagu.