Morning Brew May 2 2022
Senior Relationship Manager
Summary: Sell in May and go away?
It was not a good month end on Friday, S&P 500 -3.63%, Nasdaq -4.17%, Dow -2.77%. Amazon ended the day 14% lower, Apple lost 3.7% and most of the heatmap was red. Facebook, Twitter and Tesla the big exceptions. The S&P 500 has lost four consecutive weeks and is down 13.3% in the year, the Nasdaq Composite fell 13% only in April.
Gold and Silver came under pressure and are currently trading 22.60 and 1883 and oil is a little lower over the weekend
EURUSD is at 1.0510 and GBPUSD 1.2550. it is a holiday in the UK due to May day being Sunday.
This week will be extremely busy with economic data and earnings. So far the earnings season has been strong on paper with 80% of companies beating expectations but the fact that heavyweights such as Amazon miss are pulling the market lower. Uncertain outlooks such as the one by apple add to the worries.
This weeks highlights ill be Blackrock today,
Tomorrow: BP, AMD, Pfizer, Airbnb
Wednesday: Moderna, Uber, Etsy,
In terms of economic Data, the highlights will be FOMC decision on Wednesday, the Bank of England on Thursday and the Nonfarm Payroll on Friday, Today we had the German retail sales at 8 lower than expected, PMIs and EU Economic sentiment.
From a technical point of view by our Kim Cramer, all major indexes are down trends on short, medium term and longer term i.e. on Daily, Weekly and Monthly basis, the S&P 500 closed below key support at 4,164. Down trend confirmed. No strong support before around 3,815. Minor support around 4,056, the Dax is in a short term down trend. A daily close below 13, 566 will lead to test of March low at 12,438.
Besides earnings and the economic data mentioned, the situation in China remains worrying where the corona measures are not being eased and will likely cause supply chain issues. The War in Ukraine and sanctions will continue to be in the spotlight.
Trade safely and consider optionality for any sizeable positions.
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.