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BOJ (December) meeting minutes (link to full text)

The link is here for the minutes

Minutes of theMonetary Policy Meetingon December 16 and 17, 2021

  • .Headline notes via Reuters:
  • one member said must be vigilant to risk Fed’s tapering, expected rate hike could cause stock price falls, yen rise
  • several members said there is upward pressure seen in consumer inflation, which is already positive when stripping away impact of cellphone fee cuts
  • one member said upward pressure on consumer prices appears to be increasing as a trend as raw material costs continue to rise
  • one member said wide range of goods are seeing prices rise, not just prices of food and energy-related goods
  • members agreed inflation expectations are picking up
  • one member said there appeared to be sign of change in companies’ price-setting behaviour
  • one member said upward pressure on consumer prices likely to strengthen ahead as a trend

What Alcoa said about the global economy

AlcoaAlcoa often has some good insight into the state of the global economy and that was no different in yesterday’s earnings report and conference call. Shares of the aluminum giant are trading up 4% despite the souring of the market.

Much of the factors affecting the stock have to do with energy prices and are specific to the aluminum market but the comments on global industrial demand are notable.

  • Aluminum demand in 2021 eclipsed 2019
  • They expected 2022 demand growth at 2-3%
  • “We continue to see positive GDP and industrial production across most of the world’s leading economies”
  • There is a clear demand upsurge in across all of our different products
  • “The shortages of some specific alloying materials key to our value-added products have also eased somewhat from the tightest points in the fourth quarter”
  • “On overall market dynamics, the factors supporting higher aluminum prices represent fundamental structural changes that we believe will remain in place over the next decade, supported by a drive towards more sustainable solutions.”
  • “The global push to reduce carbon emissions is a boom for aluminum demand”

The call spent a good deal of time talking about how high European power prices will lead to a shortage in aluminium globally. It’s not just talk either, Alcoa shut down a smelter in San Ciprian, Spain for two years because of power costs.

Stocks give up gains and close at session lows for the 2nd consecutive day

The major indices gave up solid gains on the day and are closing at the lows for the second consecutive day. The NASDAQ index and Russell 2000 were the worst performers as investors rushed for the exits..

  • The Dow industrial average gave up a 462 point gain and is closing down -313 points.
  • The S&P index was up 69.63 points or +1.54% at the highs. It is closing down -50 points
  • NASDAQ index was up 301 points at the highs. It is closing down 186 points
  • Russell 2000 was up 42 points at the highs. It is closing down -38 points
  • Netflix after close announced higher EPS and revenues in line with expectations but subscriber base was lower and announced lower revenues /earnings going forward. The stock is down over 10% after the close.

EIA weekly US oil inventories +515K vs -963K expected

  • Prior was -4553K
  • Gasoline +5873K vs +2634K expected
  • Distillates 1413K vs -850K expected
  • Refinery utilization -0.3% vs -0.4% expected

Yesterday’s API data showed:

  • Crude +1404K
  • Gasoline +3463K
  • Distillate -1179K
  • Cushing -1496K

The ongoing builds in gasoline have been completely disregarded by the market. Some of that is seasonal but the past three weeks have added an average of nearly 8 million barrels per week, which is the highest on record.

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