Senior Relationship Manager
Summary: Earning Season starts with a mixed picture - Precious Metals still strong
Good morning,
Equities were mixed yesterday, the Dow traded flat, the US 500 gained 0.75% and the Nasdaq 100 1.65%. The Magnificent 7 were strong with Nvidia up more than 4%. The European indexes closed lower officially but this is a bit misleading as the Close of the Cash Indexes is usually late afternoon and not when the futures close late in the evening.
The curious stock of the day was Rent on the Runway after news it was implementing AI to boost earnings, Carmax lost 9% after an earnings miss. Globe Life fell more than 50% on allegations of insurance fraud.
Overall volumes were not too high at app 10% below the average.
The earnings season begins with the big US banks before the open. Tune in to the Saxo Market Call on equities to know what to expect as earnings season kicks off.
Looking at yields, the ECB delivered basically what was expected, a rate cut is priced in for June/July and 3 cuts remain priced in, the Fed is now at a September cut and less than 2 cuts this year. The message the Fed seems to give is to be patient.
US +10 year yields are at 4.56 the European at 2.47. As a consequence, EURUSD falls to 1.0710, GBPUSD 1.2540 and USDJOY is above the 153.
Gold and Silver remain the elephant in the room - rising again to now 2388 and 28.84 and we see interest in higher options rising. At one point there must be a consolidation of his stellar rise but apparently not yet?
The Agenda today is mainly European Inflation data in the morning and then the US Bank Earnings, US Import prices and the University of Michigan Sentiment Preliminary. Ramadan is ending and many Islamic countries are closed..
Trade safely!
Friday
- Data China Trade Balance, DE&SWE&FR CPI, US Import Prices Bostic and Daly speak.
- Earnings: Blackrock, JP Morgan, Wells Fargo, State Street, Citigroup
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.