Morning Brew February 4 2022
Senior Relationship Manager
Summary: ECB starts a paradigm shift - Stocks jump on earnings, Facebook suffers the largest loss ever
Next week I will be on the slopes, trade carefully and be safe in this volatile time.
Christine Lagarde was much more hawkish than I had expected, driving yields higher and giving strength to the EUR. Lagarde acknowledged that inflation was higher than desired and did not state that rate hikes in 2022 were extremely unlikely. This means that the so called most dovish central bank is looking at tightening and will mean much more interesting FX markets as interest rate differentials are likely to reappear as a driver. The Bank of England considered hiking by 50 bps rather than the 25 expected. EURUSD rose to 1.14160 and GBPUSD to 1.3580 and the USD Index falls to 95.2. EURCHF rose above 1.0550 again.
From now it is worth taking note of EU data again, the general assumption that the ECB will not take action may not hold anymore.
The Stock market also continues it`s volatility. Facebooks Meta suffered the biggest loss in market cap ever recorded, the stock price fell by 26% and eliminated 200 billion USD in market cap. While tech overall and Social Media companies in particular were dragged along Twitter -5% and Snapchat -23%, Snapchat had a spectacular rebound after the bell up more than 50%.
Amazon fell 7% during normal trading but gained 17 in the after market on good results.
Overall Futures fell Dow 1.45%, S&P 2.44%, Nasdaq 3.74%, this morning, a bit more than half of the losses have been recovered.
Today we are expecting the Nonfarm Payroll at 14:30 as the key event, with an expectation of 150k added jobs but it seems that after the low ADP number on Wednesday, a lower number is not unlikely.
Next week it thin in terms of economic data, key is likely to be the US CPI on Thursday – after the webinar with Steen.
Friday: Germany Industrial Orders, EU retail sales, US Nonfarm Payroll
Friday:: Bristol-Myers Squibb, Sano FP
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.