Succinct Summation of the Week's Events

Succinct Summation of the Week's Events:

Positives,

1)Initial jobless claims fell to 213k from 220k and that was 3k below expectations while last week was revised up by 1k. The 4 week average is now 216k vs 217k last week. Continuing claims, delayed by a week in its reporting, fell to 1.85mm from 1.872mm but still around 3 1/2 year highs.

2)When including the slight upward revision to December, January import prices were as expected. On a y/o/y basis, import prices are up 1.9% and by 1.2% y/o/y ex food and fuels. The stronger dollar is helping to keep a lid on import prices.

3)The Shanghai to Rotterdam trip for a 40 foot container now costs $2,887, which is down for an 8th straight week and to the lowest level since the beginning of 2024. Shanghai to LA costs $4,392, down from its highs but not as much as the Rotterdam route as it is at the lowest since December 2024 and still more than double where it was in January 2024. The Shanghai trip to NY is also more than double the January 2024 level, currently at $5,874 and just at a multi week low.

4)Refi's rose 9.6% w/o/w and up by 33% y/o/y.

5)From McDonald's: "Throughout November and December, we saw sequential improvement in baseline traffic performance, including slightly positive comp guest count growth for the month of December and had a positive comp guest comp gap to most near end competitors for the 4th quarter. These results were driven by our marketing efforts to amplify traffic drivers."

6)From Wendy's: "In the US, our traffic and dollar growth outpaced the QSR burger category. Growth was led by the success of our collaboration with Paramount, celebrating SpongeBob's 25th anniversary."

7)From Wynn Resorts: "Yet another record year of adjusted property EBITDAR, including another annual record in Las Vegas...Excluding Super Bowl weekend, all of our key volume metrics are up y/o/y. Looking further out, we already have our budgeted group and convention room nights for 2025 on the books at healthy ADRs, and transient booking demand over the last two weeks has been extremely robust. When coupled with a calendar that is once again chock full of large demand drivers in the market, the setup for 2025 feels good."

8)From MGM Resorts: On tough comps, revenues and adjusted EBITDAR did fall y/o/y but "December occupancy and ADRs were still up single digits y/o/y." And, "December slot handle and slot win were an all time record level for any month in our history."

9)From Expedia: "Our fourth quarter results exceeded our expectations, with room nights, gross bookings and revenue all growing double-digits. This top line strength reflects our continued strong execution, along with better than expected travel demand...Travel demand remained healthy in Q4, despite price increases in hotels, vacation rentals and air. Like last quarter, international demand was stronger than the US with booked room nights growing high single digits in the US, low double digits in Europe and high teens in the rest of the world."

10)From Penske Automotive: "In our US retail automotive operations, we experienced a surge in traffic post election...During the quarter, 33% of the new units sold in the US were sold at MSRP, demonstrating continued strength in demand."

11)From AutoNation: "Premium Luxury segment achieved beyond its typically strong seasonal performance, growing unit sales by 12% from a year ago, with particular strong performance in some of the upper end vehicle brands."

12)From Airbnb: "we ended the year on a strong note. Nights and experiences booked accelerated in Q4 to 12%, making it the highest y/o/y growth quarter of 2024." And, "we're excited about the strong demand we continue to see early in 2025."

13)From Herc Holdings: "For 2025, we're seeing continued strength in its signals for mega projects and LNG, data centers, semiconductors, along with strength in healthcare, education, and infrastructure."

14)From Hermes: Q4 revenue was up 18% "With good performance in America and robust growth in the other regions in 2024...France plus 13% and Europe plus 19% recorded strong progressions sustained by robust demand. Japan plus 23% benefited from sustained and regular growth carried by the fidelity of its local customers. Asia excluding Japan up 7% had a remarkable progression thanks to sales up in all of the countries of the zone. America plus 15% confirms an excellent performance."

15)From Kering: "From a sales perspective, as I shared on our last earnings call in October, we were seeing healthy demand trends in line with seasonal patterns. While interest rates increased sharply through the quarter, activity held up with impressive consistency through year end...I am pleased that this sales success was achieved with only a modest increase in incentives needed to address the impact of higher interest rates." In Asia, "Asia Pacific recovered in Q4, down 24%, a 6 percentage point upswing compared to Q3. Mainland China, Hong Kong and Macau led this sequential recovery...Finally, rest of the world was up 5% in Q4, fueled by Middle East and to a lesser extent Latin America."

16)From Cisco: "We continue to see very strong momentum in service provider and cloud, with product orders up 75%, driven by triple digit growth in webscale. Three of the top six webscalers each grew orders in the triple digits, and two of the six each grew more than 50%. This shows our increasing relevance to this high growth customer market as they scale their infrastructure for AI."

17)From Taylor Morrison: "From a sales perspective, as I shared on our last earnings call in October, we were seeing healthy demand trends in line with seasonal patterns. While interest rates increased sharply through the quarter, activity held up with impressive consistency through year end...I am pleased that this sales success was achieved with only a modest increase in incentives needed to address the impact of higher interest rates."

18)From Coca Cola: "I think the overall consumer environment is pretty stable in the sense that there's good economic growth on a broad based view around the world, and that includes both the developed and the emerging markets. If I look at the developed markets, whilst it is absolutely true that the lower income segments in the US and perhaps more notably, in Europe and Western Europe, are under disposable income pressure and have been in '24 and quite possibly will continue for some part of '25. The rest of the consumer base is actually still gaining in terms of disposable income and is spending, maybe spending a little more in the US, North America than Western Europe...And similarly in the emerging markets, yes, it's a little more volatile in ups and downs, but in aggregate, again, you see pretty robust or enduring consumer demand. In the quarter, we saw India rebound, we saw China get a bit better, the Middle East got a bit better, they're still doing pretty well in Latin America. A little softer perhaps in South Africa, but overall, we see continued robustness and growth across consumers that we need to respond to with all the strategies that we have."

19)From Cousins Properties: For Class A properties, "Fundamentals are improving. The existing supply of office buildings is declining as older buildings are converted or torn down and new construction is almost non-existent. At the same time, leasing demand is accelerating. During the fourth quarter, leasing volume nationwide reached a new post-pandemic peak for the third consecutive quarter, and net absorption was positive for the first quarter since 2021."

20)From Marriott: "The US and Canada saw its best quarterly RevPAR growth for the year, with fourth quarter RevPAR rising over 4%, primarily driven by a higher ADR (average daily room rate). The drop in occupancy around November's US election was not as severe as we had anticipated, with demand accelerating quickly after the election. International RevPAR rose over 7% in the quarter, driven by a 4% rise in ADR and a 2 percentage point gain in occupancy." Leisure travel was strong but business transient saw the "lowest growth quarter of the year due to fewer group events in the US around November's election and a decline in group RevPAR in Greater China."

21)From Lattice Semiconductor: "Looking ahead, as you heard during last quarter's earnings call, we expect more of a U-shaped recovery in 2025. We are very pleased to be guiding our Q1 EPS above the current consensus estimates in a quarter when other companies in our industry are expecting a guide down."

22)The UK economy in December unexpectedly expanded by .4% m/o/m vs the estimate of up .1% and this helped to lift Q4 to an increase of .1% q/o/q vs the forecast of down .1%. It was mostly government spending though that drove the growth as there was no contribution from household spending and business investment declined.

Negatives,

1)January CPI rose .5% headline m/o/m and .4% core, both above the estimate of a gain of .3% for each. The y/o/y gains rose to 3% and 3.3% vs 2.9% and 3.2% in the prior month respectively. Food prices jumped .4% m/o/m and 2.5% y/o/y. In particular, ‘food at home’ saw a .5% price gain m/o/m and up 1.9% y/o/y. Egg prices skyrocketed by 15.2% m/o/m and 53% y/o/y, as it’s all over the news as we know. Prices for ‘food away from home’ rose .2% m/o/m and 3.4% y/o/y. Energy prices were up 1.1% m/o/m after a 2.4% m/o/m gain in December driven by a 1.8% price gain for ‘utility gas services’ with the colder weather and higher natural gas prices. Fuel oil prices jumped by 6.2% and gasoline prices were up by 1.8% all in the month alone. Services inflation ex energy was a culprit here too, rising .5% m/o/m and 4.3% y/o/y. Core goods prices rose .3% m/o/m, though still flat y/o/y.

2)January PPI rose .4% headline m/o/m and .3% core about as expected (in isolation) but that wasn’t the only news because December was revised up sharply (annual revisions) with the headline rate up by .5% instead of .2% initially. The core rate was revised to a gain of .4% from .1%. This brings the y/o/y gain in January to 3.5% and a core rate of 3.6% vs 3.5% and 3.7% in December respectively. Energy prices rose 1.7% m/o/m after a 2.2% rise in the month before though remain flat y/o/y. Diesel fuel in particular drove this along with jet fuel. Food prices jumped 1.1% m/o/m and by 5.5% y/o/y. Eggs by the way saw a price gain of 44% from December. Core goods prices continue to show signs of bottoming, rising .1% m/o/m (no more disinflation for months now) and by 2% y/o/y. On the services side, prices rose .3% m/o/m and 4.1% y/o/y.