The Executive Briefing: August 14
This Week's Watchlist
- Consumer Spending
- This week we get several key economic (July Retail Spending) and financial reports (earnings from Walmart, Target, Home Depot) that should provide intelligence about current consumer spending trends.
- Low Mississippi Water Levels
- Water levels in St. Louis and Memphis are 10 to 20 feet lower at this point in the year than in 2020 and 2019 due to lack of rain. Low water levels on the River last fall contributed to $20 billion in economic losses, according to an AccuWeather estimate. A recurrence would once gain threaten grain exports (downstream) and fertilizer distribution (upstream.) (Source: WSJ article, 8/5/2023/)
- Monetary Policy
- The next FOMC meeting will be held on September 19-20, 2023. The Fed hiked interest rates by 25 bps to 5.25%-5.50% at its July 2023 FOMC meeting, continuing an aggressive campaign of nearly one dozen rate hikes, intended to damp rising inflation.
- Hurricane Risk
- Last week, the National Oceanic and Atmospheric Administration (NOAA) increased its forecast for this year’s Atlantic hurricane season to “above normal” from its previous estimate of a “near-normal.” In 2022, NOAA recorded 14 storms, including two, Ian and Fiona, that became major hurricanes.
Upcoming Events and Catalysts
Monday 8/14/2023
- Grain Inspections (10am), U.S. Crop Progress (4pm), Season-Average Price Forecasts for Corn, Soybeans, and Wheat
- Earnings reports this week from Walmart, Target, Home Depot
Tuesday 8/15/2023
- USDA-ERS Outlooks: Cotton, Oil Crops, Feed, Rice, Wheat
- U.S. Retail Sales, Empire State Manufacturing
Wednesday 8/16/2023
- USDA-ERS Feed Grains Yearbook Table; EIA Weekly Ethanol Production
- Industrial Production & Capacity Utilization, Release of Federal Open Market Committee minutes (July meeting)
Thursday 8/17/2203
- USDA Weekly Export Sales, USDA-ERS Livestock, Dairy, and Poultry Outlook: August 2023
- Initial Jobless Claims, July Leading Economic Indicators
- Initial Jobless Claims
Friday
8/18/2023 • USDA Cattle on Feed
Week of August 20th • New and Existing Home Sales
• The Jackson Hole Economic Policy Symposium 2023
• U-Michigan Final Consumer Sentiment Survey
• USDA Food Price Outlook
Sources: New York Fed Calendar; USDA Agency Reports, Barron’s Preview, Seeking Alpha Saturday, MarketWatch
Numbers of Interest
+3.2% July CPI rose 0.2% m/y and on a y/y basis increased 3.2%, vs 3.3% expected and +3.0% prior. Core CPI (excludes food and energy) also advanced 0.2% m/m and on a y/y basis rose +4.7% Y/Y vs. +4.8% expected and +4.8% prior.
+17.8% Increase in car insurance prices over the past 12 months (through July 2023), the largest jump since 1976.
+33% Represents the increase in crop land values since 2020 according to USDA's recent report on farmland values.
$1.03 Trillion U.S. consumers had ending credit card balances as of June 30, 2023, up 16.2% y/y.
-11% Drop in UPS’ second quarter revenue
35 Smithfield Foods announced plans to close 35 farms in northern Missouri and lay off 92 salaried and hourly employees effective Oct. 8th.
4 Tyson Foods announced plans to close four broiler slaughter facilities effective in early 2024.
$147.4 billion Amount of cash and cash equivalents on the balance sheet of Berkshire Hathaway as of June 30, 2023.
Kenneth Scott Zuckerberg is Lead Industry Analyst, Farm Supply & Biofuels, CoBank
