The end of global tightening, Tesla, Chevron, airlines, bitcoin softens

US stocks rallied after recession risks eased following better-than-expected GDP data. ​ So today’s data was good news that was able to send stocks a little bit higher, but not all the way as rate cut bets were pared back. ​ For stocks to have a sustained rally, we still need a recession and this data is delaying hopes of that happening before the middle of the year. ​ A recession will help get the job done with bringing inflation all the way down; otherwise, a tentative soft landing will just keep Fed keep policy restrictive. Wall Street is having a sugar crash as this morning’s rally will get fade quickly. ​

BOC possible hold + smaller SARB hike = less aggressive Fed

The end of global tightening is almost here. First, it was a signal of a potential pause from the Bank of Canada, then it was a smaller-than-expected rate hike from the South African central bank. Central banks expect disinflation trends to remain firmly in place and they are now nearing the end of their respective aggressive rate-hiking campaigns.

The Fed is watching the other central bank rate decisions and the chances of a half-point rate rise seem very unlikely now. The Fed will look at the latest round of data, most likely downshifting to a quarter-point pace, but because the labor market remains strong, they will stand by their dot-plot forecast and signal hikes could continue.

US Data

The US economy didn’t lose that much momentum in the fourth quarter. ​ Economic growth cooled to a 2.9% annual rate, which was better than the 2.6% consensus estimate. ​ Personal consumption declined from 2.3% to 2.1% and missed the 2.9% forecast. ​ Core PCE q/q dropped from 4.7% to 3.9%, but everyone will wait to see what happens with tomorrow’s release of the Fed’s favorite inflation gauge.

The economy is supposed to be decelerating, but a lot of the key data points aren’t supporting that argument. ​ Weekly jobless claims continue to deliver some very robust prints that suggest the labor market is ready to break. ​ Monetary policy will start to feel restrictive soon and claims will rise and GDP should still contract by mid-year. ​ ​ ​ ​

Durable goods orders for December also impressed with a 5.6% gain, more than double expectations. ​ Weakening capital goods orders is a bad sign for manufacturing activity, but recent regional surveys have suggested a soft patch was here.

Until the labor market shows actual signs of weakening and not just planned layoff announcements, stocks will struggle to form a sustained rally.


Tesla is getting the job done. The electric car giant posted strong earnings and revenue beats. The news was not all positive as they missed on free cash flow. ​ Berlin and Austin manufacturing has ramped up and they could be able to maintain their previous guidance for average annual growth of 50% over multiple years. ​ For 2023, they are only guiding a 37% increase in production to 1.8 million vehicles a year. ​


Chevron’s earnings will happen tomorrow, but that didn’t stop it from announcing a $75 billion buyback. Last year was a record year for the oil giant and no one should be surprised that they are able to increase their buyback plan. ​ This buyback decision will clearly anger the White House, especially if they don’t show an increased investment in CAPEX on Friday. ​


Airlines went as expected as Southwest was crippled by the about 17,000 cancelled flights at year-end and the others had some struggles with domestic travel. ​ American Airlines posted better-than-expected profits as they were able to charge more and capitalize on strong travel demand. JetBlue’s profit was a beat but investors are a little downbeat on the outlook for domestic travel going forward. ​ CEO Geraghty noted, “we’re pleased to see the demand environment remain solid into the seasonally tough period of the year.”

The airlines still have strong demand and business travel has improved, but the big question mark is how quickly will demand deteriorate as we head towards a recession. ​ ​


Bitcoin pared losses as soft-landing hopes returned following better-than-expected US GDP data. ​ Bitcoin still looks poised to consolidate here until next week’s FOMC decision. ​ ​

One notable crypto story was a fine given to Coinbase by the Dutch Central Bank. ​ The central bank’s penalty is for offering crypto products prior to their registration. ​ This $3.6 million fine is a slap on the wrist but another reminder that a global crackdown on crypto continues. ​

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.