Erik Erik Erik

Morning Brew July 27 2021

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Summary:  Earnings & FOMC Looming


 Good Morning,

Back after a week in beautiful Italy and markets are still in a quagmire.

The USD remains strong but off the highs mid July with the USD Index now at 106,40 after a high of 109.30 on July 14th, EURUSD is at 1.0220 and GBPUSD at 1.2060.

Equities tried to break out to the upside but had trouble holding the levels. Yesterday was a slow day with volumes almost 20% below the average on a monthly basis. All three US Indexes moved less than  half a percent and the S&P500 closed at 3966, the Nasdaq at 11782 and the Dow Jones at 31990. The German Dax is trading at 13192

Gold and Silver remain above key supports at 18.50 and 1722

The US 10 year yield is trading at 2.80  and the yield curve remains inverted with the 2 year trading higher than the 10 year by 22 basis points. The Bund Future rose to 154.80.

WTI gained 1.4% to trade at 98 USD per barrel. This week is driven by 3 things:

  • Russian Gas deliveries
  • Earnings
  • The FOMC rate decision

EU Energy ministers are meeting today and expected to announce some sort of deal to save gas while Russia announced to cut supply to several countries, supply to Germany is expected to fall by 50%.

This week 170 of the S&P 500 companies report earnings in addition to many international ones, crucial yesterday was a very poor guidance by Walmart which announced higher inflation caused customers to spend more on essentials where margins were smaller. Shares fell as much as 10% in the aftermarket.

UBS posted on Tuesday a smaller-than-expected rise in net profit for the second quarter on lower than  expected IB earnings,

Logitech profit falls almost 40% on less home office demand, Unilever raised it`s guidance.

The Rate decision tomorrow and the guidance will be the key economic event of the week, currently a 75 bps hike is priced in with 85% and 1% with 15% probability.  The decision itself will be closely watched but also any hint on the future direction. Where does the Fed  expect rates to peak? Do they see a recession with the potential for rate cuts looming? The market is looking for these clues to break the current indecision.

Today only the US Consumer confidence at 16:00 should be of real importance and tomorrow the durable goods orders.

On Thursday, German CPI  and US GDP and Friday US earning data will be significant.

Key earnings:

  • Tuesday 26 July: Alphabet, Visa, LVMH, Coca-Cola, McDonald’s, UPS, Texas Instruments, Raytheon Technologies, Unilever, Christian Dior, General Electric, UBS Group, General Motors, Archer-Daniels-Midland, Southern Copper, DSV, UniCredit
  • Wednesday 27 July: Microsoft, Meta, Bristol-Myers Squibb, Qualcomm, AMD, Equinor, GSK, ServiceNow, Rio Tinto, Mondelez, Boeing, Airbus, 3M, Kering, Humana, Mercedes-Benz, Ford Motor, Kraft Heinz, Shopify, BASF, Danone, Fanucm Enphase Energy, Spotify, Garmin
  • Thursday 28 July: Apple, Nestle, Pfizer, Merck, L’Oreal, Shell, Comcast, Intel, Linde, TotalEnergies, Sanofi, Honeywell, Anheuser-Busch InBev, Keyence, Volkswagen, Air Liquide, Schneider Electric, Banco Santander, Valero Energy, Stellantis, Neste, BAE Systems, Arcelor Mittal
  • Friday 29 July: Amazon, Exxon Mobil, P&G, Mastercard, Chevron, AbbVie, AstraZeneca, Sony, Caterpillar, Colgate-Palmolive, BNP Paribas, Twilio, Pinterest
  • Expiries
  •         Physically Settled Futures:
  • NGQ2 will expire on 26th July at 19:30 GMT.
  • TTFMQ2 will expire on 27th July at 09:00 GMT.
  • STFQ2 will expire on 28th July at 02:00 GMT.
  • EMAQ2 will expire on 28th July at 09:00 GMT.
  • GCQ2, MGCQ2, XKQ2, ZLQ2, ZMQ2, ZSQ2 will expire 28th July at 15:00 GMT.
  • Expiring CFDs:
  • OILUKSEP22 will expire 29th July at 15:00 GMT.

 

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