Senior Relationship Manager
Summary: Risk Off drives Yields Lower, Netflix and Peleton sell off
Good Morning
There are a number of margin changes today, you can see if you are affected by checking if you have a blue “I” in your account bar or in your account statement. If you see click on it, you will see the change. There should not be any dramatic impacts that we could see.
US Equities continues their descent yesterday with the Dow down 0.89%, the S&P sheds 1.1% and the Nasdaq 1.3%. Netflix dropped sharply from a close of 508 to 405 after a poor outlook. Peleton falls 24% on news of falling demand and production halts. Big tech down again, Apple -1%, Alphabet -1.3Meta -1% and Nvidia -3.6, Tesla is stable at 995. Yields fall sharply on a shift into bonds and the US 10 year is trading at 1.78 after testing the 2 just two days ago. The EU 10 year falls below 0 again.
Bitcoin down 6% on technical selling and Russia considering a ban. We are just trading at the 38k support line where the price turned in March 2021.
Oil falls 1.8%after data shows a build in US inventories -
The USD Index gives up ground on the falling yield, not following the risk off sentiment . There are no huge moves: EURUSD 1.1330 GBPUSD 1.3590 Gold 1840 and Silver 24.40 EURCHF 1.0365
U.S. Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov are scheduled to meet in Geneva today,
Rio Tinto fell almost 5% after Serbia withdrew a lithium exploration license, stating ecological concerns. There is open suspicion that Australia’s failure to let Novak Djokovic play in the Australian Open was the actual cause.
Schlumberger reports earnings today and Canadian Retail sales at 14:30as well as the EU Consumer confidence at 16:00 are of Interest. In the night from Sunday to Monday, the Australian and Japanese PMI will be released.
Expiries
Physically Settled Futures:
ECOG2 will expire 23th January 2022 at 10:00 GMT.
NGG2G2 will expire 27th January 2022 at 10:00 GMT.
GCG2, MGCG2 will expire 28th January 2022 at 16:00 GMT.
Expiring CFDs:
NATGASUSFEB22 will expire 25th January 2022 at 16:00 GMT.
INDIA50JAN22 & TAIWAN95JAN22 will expire 27th January 2022 at 02:00 GMT.
GASOLINEUSFEB22, GOLDFEB22 & HEATINGOILFEB22 will expire 27th January 2022 at 16:00 GMT.
Trade safely
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist