Marketbites: CPI Report Disappoints
Updated: Sep 27, 2022
Portfolio Manager Commentary:
The August CPI results came in worse than expected. A close to four-decade high caused a sharp and broad downfall in the markets. The S&P 500 slid -4.32%, the Nasdaq dropped -5.16%, and the Dow fell -3.94%. Even as gas prices eased, the CPI gained 0.1% for the month and was up 8.3% year over year. Economists polled by Dow Jones expected a monthly decline of 0.1% as opposed to the increase that occurred.
Institutional investors have become very bearish these past few weeks. Asset managers and leveraged funds have built up the most short positions on stock futures since 2012. At the same time, Goldman Sachs analysts recently said that mutual and hedge funds are conservatively positioned. Mutual funds have increased how much cash they’re holding to the highest levels since 2020.
Twitter ($TWTR) was able to secure a gain of 0.80% amid a steep tech decline Tuesday after shareholders voted to approve Elon Musk’s $44 billion bid to buy the company. The vote comes as Musk is seeking to back out of the deal, leading to Twitter suing him for allegedly breaking the agreement.
Chart of the Day:
U.S. banks lost a record $370 billion in deposits last quarter. The outflows will fuel a debate about how the Fed's inflation-calming moves are going to play out in the banking system.