Morning Brew January 28 2022
Senior Relationship Manager
Summary: Markets are trying to digest the FOMC and the US GDP
Markets remain nervous and swing rather wildly as traders are trying to make sense of the FOMC meeting and trying to position themselves. The US GDP came the highest in 38 years and sparked further rate hike fears. Interest rate futures show an expectation of almost 5 hikes this year. This boosted the USD, weighed on equities and hurt precious metals.
Rate sensitive stocks lost most, indexes lost minutely in the blue chip sector (Dow Jones -0.02) and much stronger in growth (Nasdaq -1.4%) The Russel 2000 is 20% off it`s high.
EURUSD fell below the 1.12 and could find support at 1.1090 and at 1.100 if the USD continues stronger, GBPUSD remains at 1.34, Gold fell to below 1800 and Silver 22.70. The USD Index rose above 97. The Bank of England and the ECB will announce rates next week. The BOE is expected to hike with 90% probability and the ECB not to with 97%.
Oil remained strong on expectations that Chinas imports will increase by 6-7%.
Apple beat expectations and is seeing the ship shortage becoming less painful, shares jump USD 9 after the close, Intel stated the Chip shortage was weighing on earnings and stocks fell 7%. Tesla closed almost 12% lower. Netflix rises more than 7% on news that the company could gain Bill Ackman as investor.
The Expiry of the Natgas Future caused severe price jumps, temporarily the price rose by 80%.
Watch for week- and month end nervousness today and stay nimble.
Key Economic Data:
Friday: Swiss KOF, EU Business Climate, Personal Income, US PCE, University of Michigan Consumer Confidence.
Friday: Charter Communications, Chevron Caterpillar
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.