Equities: New extremes and a challenging opportunity set
Discover insights on the future of equity markets in Q1 2024 and navigate the potential recession with strategic investment choices.
Senior Relationship Manager
We have seen quite interesting moves in the last week – as usual when I am on Holiday.
The US 500 turned into the US 5000, the US Tech 100 NAS is near 18000 and Nvidia is reaching for the stars at above 700 – Nvidia is now worth more than Amazon and trading at a PE of 95 – earnings are due on Feb 21. . Bitcoin broke the 50k.
The USD Index is at 104.20 with EURUSD 1.0770, GBPUSD 1.2615 and USDJPY above the 148.80 resistance at 149.50. 48k and Gold and Silver are 2021 and 22.75.
After the last FOMC Rate decision and the stellar Non-Farm Payroll, the interest expectation for the US as well as for Europe have shifted significantly and the current expectation is that both will cut slightly more than 4 cuts by December. A march cut has become unlikely for both central banks, but both are seen to have cut at least once by June.
Charu writes in her FX Update that US disinflation will be the key focus as CPI and PPI is released, but dollar dips could continue to find buyers amid US exceptionalism and carry advantages.
The key event of the day should be the US CPI at 14.30 CET with an expectation of 2.9 annually and 0.2 monthly. The Core is expected at 3.7% and 0.3%.
While the CPI will indicate the Feds path, the other key questions are if the current equity rally is sustainable or if we well see an decline soon. Geopolitics remains a significant risk and the US election is becoming a hot topic already.
For Switzerland the CPI will be released at 8:00 expected at 1.7% annually.
Our Strats put out several very good research pieces yesterday:
Two tech updates by Kim on the yen crosses and Asian Indexes:
Koen wrote on how one can approach USDJPY via options:
What are your (FX) options - Trading the USDJPY after the 148.8 breakout
- Data CH CPI, UB Labor Data DE ZEW, US CPI
- Earnings: Airbnb Inc, American International Group, Coca Cola, Shopify, Moody!s
- Data UK CPI, EU GDP,
- Earnings: Sony, Heineken, CME, Cisco, Occidental Petroleum,
- Data JP GDP, UK GDP US Retail Sales, Initial Jobless Claims, Bostic speaks,
- Earnings: Schneider, Stellantis, Applied Materials, Airbus, Deere, Safran,
- Data US PPI
- Earnings: Eni
What happened to the future?
What happened to the future?
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