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Dow futures up over 100 points – Oil falls – IMF sees third of global economy in recession for 2023 – Tesla grew 40% but Wall Street still disappointed – Companies pay big raises to keep workers but add to inflation woes
On the first trading day of 2023, stock futures rose as investors kicked off the year on a strong note, after the major averages closed in 2022 with their worst annual losses since 2008, ending a three-year winning streak.
Futures tied to the Dow Jones industrial average climbed by 149 points, or 0.44%, while S&P 500 futures advanced 0.51%, and the Nasdaq 100 futures gained 0.73%, CNBC reported.
Oil futures moved lower Tuesday on weak demand data from China amid an uncertain economic outlook. The benchmark US West Texas Intermediate crude was down $1.01, or 1.26%, at $79.25, while Brent crude futures fell $1.13, or 1.32%, to $84.78 a barrel, Yahoo Finance reported.
The International Monetary Fund’s (IMF) chief Kristalina Georgieva is warning that a third of the global economy is expected to be in recession in 2023, and the IMF projects global growth to be at 2.7% this year, slowing from 3.2% in 2022, CNN reported.
“The three big economies, US, EU, China, are all slowing down simultaneously,” Georgieva said in an interview on Sunday. “We expect one third of the world economy to be in recession”
Georgieva added that for countries not in a recession, it will feel like a recession for hundreds of millions of people. Georgieva acknowledged that the United States may avoid a recession, but predicted: “Half of the European Union will be in recession.”
Even though Tesla delivered a record 1.3 million vehicles in 2022, Wall Street was still disappointed by the electric vehicle manufacturer, CNN reported. Tesla produced 439,701 vehicles in Q4 2022 and delivered 405,278, with the numbers representing a growth of 40% in deliveries year-over-year, CNBC reported. However, Wall Street expected 427,000 deliveries in the final quarter, as Tesla predicted a 50% average annual growth in vehicle deliveries at its third-quarter shareholder presentation.
As companies offer some of the biggest pay raises and decades to retain employees, that move is adding to inflation woes, according to a new report from the Wall Street Journal.
Wages were up 5.5% in November from a year earlier for employees who stayed at their jobs, according to the Federal Reserve Bank of Atlanta, the New York Post reported. The rise in wages was up from 3.7% annual growth in January 2022, the highest increase in 25 years of record-keeping. Workers who changed job duties, occupations, or companies saw wage gains of 7.7% in November year-over-year.
Essentially, companies are prepared for wage growth to match inflation, particularly in industries with high-demand for workers.
