Morning Brew May 19 2022
Senior Relationship Manager
What a day…
Equities sold off massively with the move kicked off by a worrying outlook and disappointing earnings by Target after Walmart had disappointed the day before. There is increasing worry that inflation is eroding purchasing power. Target fell by 24.9, Walmart lost a further 6.7% is now trading at 122 vs 148 on Monday. The Retail ETF lost 8.3%.
In addition to retailers, growth stocks dropped on rate fears and Tesla, Amazon and Apple suffered massive losses at 5-7%.
If nothing else, the move shows that markets are extremely on edge and worrying. It is also interesting that there seems to be a selloff the day after Powell spoke – not the same.
The USD gained against the EUR and the GBP to 1.0480 and 1.2368. Gold and Silver remained fairly stable at 1814 and 21.38.
British inflation rose at the fastest pace since 1982 as energy cost rise, Canadian inflation rose to 6.8% last month
Dovish comments by Charles Evans and Patrick Harker failed to impress markets.
Reuters reports that S&P Dow Jones Indices have removed Tesla from its S&P 500 ESG Index because of issues including claims of racial discrimination and crashes linked to its autopilot vehicles. Elon Musk stated that ESG was a scam. He also announced to vote republican after being disappointed by the democrats.
Japan`s Trade deficit rises despite 12.5% higher exports on surging costs.
Physically Settled Futures:
CLM2 will expire 20th May at 15:00 GMT
PAM2 will expire 23rd May at 15:00 GMT
PALLADIUMJUN22 will expire 20th May at 15:00 GMT.
Latest Market Insights
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.