Weekly Update February 15th, 2023
Equity markets kicked off 2023 with positive momentum on the prospect of a "soft landing", an economic slowdown that avoids a recession. The optimistic outlook has largely been based on inflation continuing to decline towards the Fed's 2% target. However, the recent hiring surge in January which brought unemployment down to 3.4%, a 53-year low, has Fed Chairman Jerome Powell warning that the path towards 2% inflation "is likely going to take quite a bit of time" and "It's probably going to be bumpy". The labor market, along with recent price upticks in car and gas prices, have rekindled inflation concerns in recent weeks. (Source: The Wall Street Journal)
President Biden delivered his State of the Union address to Congress last week. Biden found rare common ground between Democrats and Republicans on investing in infrastructure and domestic chip manufacturing. President Biden drew criticism from Republicans after claiming the GOP sought cuts to Social Security and Medicare, despite House Speaker McCarthy stating such cuts are off the table. On the foreign policy front, Biden applauded Congress for providing nearly $30 billion thus far to Ukraine, while rising China tensions took center stage with the recent downing of a Chinese spy balloon. (Source: The Wall Street Journal)
The week ahead focused on inflation with Consumer Price Index (CPI) data on Tuesday and Producer Price Index (PPI) on Thursday. Consumer spending will also be in the spotlight with retail sales on Wednesday, as well as housing market data throughout the week.
Blueprint Numbers
INVESTORS SHUNNING U.S. EQUITIES - Investors have withdrawn $31 billion from U.S. equity mutual funds and ETFs to start 2023, the largest outflows to start a year since 2016. The funds are being reallocated elsewhere: $12 billion have gone towards international equity funds while $24 billion in asset flows have been contributed to taxable bond funds. (Source: The Wall Street Journal)
ChatGPT FASTEST GROWING APP IN HISTORY - Artificial intelligence application ChatGPT has reached 100 million active users in just two months, the fastest consumer application adoption in history. Comparatively, it took Instagram 2.5 years to reach the 100 million mark, while it took rival social media platform TikTok nine months. (Source: CBS News)
FOURTH OBJECT SHOT DOWN – The U.S. shot down a fourth flying object on Sunday, this one flying 20,000 feet over Lake Huron. This follows the downing of a flying object over Canada’s Yukon territory on Saturday and a flying object over Alaska on Friday. The heightened scrutiny over flying objects started after the U.S. shot down a Chinese spy balloon over Atlantic waters on February 4th. (Source: The Wall Street Journal)
VALENTINES DAY SPENDING - Americans are projected to spend $25.9 billion on Valentine’s day this year, with men estimates to spend nearly twice as much on women on average. It is estimated that 30% of all annual flower sales occur around Valentine's Day. However, the holiday is not for everyone as 48% of adults do not plan to celebrate the holiday this year. (Source: Wallethub)
COST OF SUPER BOWL ADS - The average cost of a 30-second Super Bowl TV advertisement hit $7 million in 2023, up from $6.5 million a year ago. The cost has nearly doubled over the past decade and tripled over the past 20 years. There have been only three years where the average cost of a super bowl ad decreased from the previous year: 2007, 2010, and 2020. (Source: statista.com)
BIG BET ON THE SUPER BOWL - It is estimated that Americans bet a record $16 billion on the Super Bowl this year, up 66% from the year prior. Gamblers were able to bet on much more than the outcome of the game; Rihanna's first song, the length of the National Anthem and the famous Gatorade shower color were all popular prop bets this year, (Source: The Wall Street Journal)
