Senior Relationship Manager
Summary: "Dovish Fed" stabilizes markets
Good Morning,
Next Week I will be off and will be back the 25th with the next Morning Brew on the 26th – Safe trading over the ECB decision and earnings!
High inflation and disappointing numbers and outlooks from JP Morgan and Morgan Stanley spooked the market yesterday, driving the EURUSD below parity and causing a sharp selloff in equities. “Dovish” statements out of the Fed soothed fears of a 1% hike in 2 weeks, letting US Indexes recover. S&P 500 and the Dow closed in the red with 0.3% and 0.5% while the Nasdaq turned green (0.01%)
The earning expectation has declined to an earnings growth of just above 5% from 6.8% 2 weeks ago.
There was quite a shift, this morning the expectation is no longer 70% in favor of a 1% hike but 65% for 75 bps and only 35% for 1% based on rate futures.
This morning, Indexes are trading friendly with the Dax up 0.8% from yesterdays 17:30 close, US Futures are up 0.2%.
EURUSD is at 1.0020, GBPUSD at 1.1825 and USDJPY 139 Bitcoin remains above 20k and Gold and Silver are at 1708 and 18.30.
China's economy contracted sharply in the second quarter but retail sales exceeded expectations.
US PPI was releases at 11.3% vs. 10.7% expected.
Mario Draghi resigned yesterday after he lost support of the 5 star movement but was asked to stay on so Italian politics will remain interesting.
Today US retail Sales will be key at 14:30 followed by production data 15:15 and the University of Michigan at 16:00, also earnings by Citi, Charles Schwab, Wells Fargo and Blackrock
A new fragmented world order can render some of today's infrastructure obselete, but it also calls for massive new investments across the globe, which requires a new set of strategic and tactical investment strategies.
Steen Jakobsen,
Chief Investment Officer
As globalisation turns to fragmentation, China seems set on playing a role in the global economy, while simultaneously working towards proofing its own economic situation from external shocks and crises.
Redmond Wong,
Market Strategist
The recent bank runs and ensuing challenges are reminicent of something we've seen before. Will it end like the S&L crises of 1986 and 1995?
Chris Dembik,
Head of Macroeconomic Research
Equity markets need to recalibrate to another - fragmented - global world. What's your view on equities in this market - are they going up or down?
Peter Garnry,
Head of Equity Strategy
With every development comes new opportunites, some of which could be in India. Have you considered the country as a part of your diversification strategy?
Charu Chanana,
Market Strategist
A collar is an option strategy that allows some protection while maintaining some upside potential. What investment would you like to use a collar strategy for?
Hans Oudshoorn,
Trainer Academy
There are arguments to be made for many commodities to have upside. Which are you paying the most attention to this quarter?
Ole S. Hansen,
Head of Commodity Strategy
In a very challenging macro environment, which currencies do you think will come out on top?
John J. Hardy,
Head of FX Strategy