Wednesday Morning Rebel Brief — Powell Speaks to ECB. BBBY and NIO Fall.

Good morning Market Rebellion! The indices are flat in the premarket following Tuesday’s selloff! (Looks like no one told that to NIO…) Before we get into this morning’s market moving news, let’s have a quick round of Rebel Trivia: What is it #1 best performing stock in the S&P over the last 20 years? (Hint: it’s not Apple) Answers at the bottom of this article!

Now, let’s get into the news.

Jerome Powell Speaks to ECB

Jerome Powell began speaking to the European Central Bank forum at 9AM EST on Wednesday. 

Question: “Is slower growth, much slower growth an inevitable trade off in trying to deal with inflation?”

Answer: “I would say that, if what we see for example is a redivision of the world into competing geopolitical and economic camps, and a reversal of globalization, that certainly sounds like lower productivity and lower growth. And in many parts of this side of that story, you see aging demographics, so a shrinking workforce, and you see economies that are growing more slowly, and whose workforces are not expanding. So, that’s certainly a possible outcome, and I think probably, to some extent, a likely outcome.”

Question: “And in the shorter term, can the U.S. economy deal with a possible onslaught of interest rate hikes?”

Answer: “So the US Economy is actually in pretty strong shape. So if you look back a year, the U.S. economy grew more than 5.5%. It was really the big reopening year. And so we had expected this year that growth would moderate to a more sustainable path. We also of course are raising interest rates, and the aim of that is to slow growth down, so that supply will have a chance to catch up. We hope that growth can still remain positive.

So if you look at the strength of the economy, households are in very strong shape, they’ve still got a lot of excess savings. […] Households are overall in strong shape. The same thing is true of businesses. Very, very low rates of default, things like that. Lots of cash on the balance sheet. The labor market is tremendously strong — still averaging very, very high job growth per month. So overall, the U.S. economy is well positioned to withstand tighter monetary policy.”

For more on this ongoing interview, follow this link.

Bureau of Economic Affairs Releases Finalized Q1 Data

The BEA has adjusted the preliminary GDP and Price Index numbers one final time for Q1. The new adjustment indicates negative GDP growth of an additional tenth of a percent, and higher price index figures than initially accounted for. Those finalized statistics are:

• Q1 Final GDP -1.6% Vs Prelim GDP -1.5%
• Q1 Final PCE Price Index +7.1% Vs Prelim +7.0%
• Q1 Final Core PCE Price Index +5.2% Vs Prelim +5.1%
• Q1 Final Chain-Weighted Price Idx +8.2% Vs Prelim +8.1%

Looking for a way to interpret the data? Essentially, Q1 inflation was a little higher than we initially thought, and Q1 productivity was a little lower than we initially thought. Though, now that’s nearly into Q3, the market will likely look forward to the next CPI Report (on July 13th) to gauge how bad things really are.

NIO Accused of Manipulating Sales Data

Short-selling firm Grizzly Research claims that electric vehicle maker NIO manipulated its sales data to boost its revenue and profitability metrics. The short-selling report alleges that NIO included data from a related, but non-consolidated third party, Wuhan Weineng Battery Asset Management. NIO has denied the claims made by Grizzly Research. In a response penned early Wednesday morning, the EV maker said,

“The report is without merit and contains numerous errors, unsupported speculations and misleading conclusions and interpretations regarding information relating to the Company.”

The rest of their response can be found here.

Shares of NIO are trading down more than 6% on the news. 

Bed Bath & Beyond Plummets

If you thought NIO was having a rough day, take a look at Bed Bath & Beyond. The stock is trading down more than 15% after a small miss on revenue expectations ($1.46B vs $1.51 expected) and a massive miss on EPS (a loss of -$2.83 vs -$1.39 expected). In the same call, CEO Mark Tritton announced he was leaving his role effective immediately. 

Now, time for the answer to our Rebel Trivia question: The #1 best performing stock in the S&P over the last 20 years was none other than Monster Beverage (MNST)!

For more quick takes on this morning’s market-moving news, check out 60 Seconds With Jon Najarian!

https://twitter.com/jonnajarian/status/1542133675562717189

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