Morning Brew May 23 2022
Senior Relationship Manager
US stocks rose yesterday with growth aided by a strong outlook by JP Morgan, the Dow and the S&P rose 1.98 and 1.86% and the Nasdaq 1.59%. Interestingly every comment I read believed the rally to be short lived.
The mood was soured by a bleak outlook by Snapchat that announced to miss it`s revenue target and to cut hiring, shares fell almost 30% in the aftermarket and sparked overall risk off sentiment.
Futures are 0.5% - 1% lower this morning with the US 500at 3932, the USTECH100 at 11830 and the GER40 at 14080. Neither US nor EU interest rates moved significantly, the US 10 year is at 2.83 and the EU at 1.023.
EURUSD gave up a little ground to trade at 1.0660 and GBPUSD at 1.2565. USDTRY is nearly at 16.
Gold and Silver had a calm day for once and are at 1856 and 21.75, Bitcoin remains near the 30k.
Remain nimble in your positions and consider options for high risk trades – in FX as well as exchange traded ones.
JPMorgan raised the forecast for interest income and affirmed its profitability goals, its stock 6% higher despite persistent questions about how much more it will spend on its businesses.
Raphael Bostic hinted that after two 50 BPS hikes it might be a good idea to halt hikes in September. Kansas City Fed President Esther George said “The road ahead could be bumpy “
Fed will start reducing its $9 trillion balance sheet next month.
Samsung to invest USD 356 Billion into over five years in strategic sectors including semiconductors and biopharma, noteworthy was that EV Batteries were not part of the announcement.
Toyota closed it`s production plan by about 100,000 to roughly 850,000 vehicles in June due to the semiconductor shortage.
Tesla closed at 674 and halted the recent selloff.
Peter wrote an article on Nvidia and Snowflake that is worth your time:
Earnings from Nvidia and Snowflake will take center stage on Wednesday. Both companies are still expected to show strong revenue growth but underneath the growth hype things are deteriorating. For Nvidia it is the crypto mining industry and for Snowflake it is a general slowdown in datacenters.
Today we are expecting a flurry of international PMI Data as the only key events:
France 9:15, Germany 9:30, EU 10:00 UK 10:30 US 15:45
Physically Settled Futures:
NGM2 will expire 25rd May at 19:30 GMT.
ENAM2 will expire 27rd May at 09:30 GMT.
FLGM2, TTFMM2 will expire 27rd May at 15:00 GMT.
NATGASUSJUN22 will expire 24th May at 15:00 GMT.
10YUSTNOTEJUN22, 30YUSTBONDJUN22, GASOLINEUSJUN22, GOLDJUN22, HEATINGOILJUN22 will expire 27th May at 15:00 GMT.
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.