Senior Relationship Manager
Summary: Stocks weak, USD Strong
Good Morning
The Dollar gained on the looming debt ceiling and hawkish speakers while equities suffered on than expected retail sales and disappointing numbers as well as outlook by Home Depot. Thomas Barkin stared he was comfortable with hiking rates further and Loretta Mester stated in her view the Fed could not hold rates just yet.
The Dow lost 1%, the S&P 0.6 and the Nasdaq 0.2%, volumes were low at more than 10% below the recent average. The GER40 remains rangebound at 15917. Peter Garnry but out a note on the biggest drivers of the European equity rally yesterday, worth a read!
President Biden and Kevin McCarthy met yesterday and were cautiously optimistic that a solution would be found. Biden said the leaders reached "an overwhelming consensus ... that defaulting on the debt is simply not an option. Our economy would fall into recession acc to Reuters.
Longer Term US rates rose yesterday while the short end of the curve changed little yesterday.
JPY weakens despite a better than expected Japanese GDP (+0.4% vs 0.1% expected) to trade at 136.80. EURUSD falls to 1.0860, GBPUSD 1.2470. Gold and Silver remain on support and are likely to move either way soon.
UBS estimates a financial hit of USD 17Bio, a legal risk of 4 bio but a negative goodwill of 34 bio from the Credit Suisse takeover. It will be an interesting half year report.
Tesla held the annual shareholder meeting, Elon Must stated the Cybertruck would be delivered this year and that he would not step down as CEO.
Tomorrow is a holiday in much of Europe and there could be less liquidity. I will not be in the office until Tuesday afternoon.
There are few top of the range economic releases the next few days, watch the Debt Celing negotiations and the G/ as key events we know of.
Trade Safely.
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