Morning Brew November 17 2022
Senior Relationship Manager
Summary: Fairly Calm For a Change
Worries from the retail and semiconductor sectors weighed on risk sentiments despite strong retail sales and falling US Yields.
Indexes in the US declined between 0.1% and 1.5%and the German Dax fell as well. Target lost 13% on a cur outlook and an earnings miss, Micron pulled the semiconductor sector lower. After hours, Nvidia beat expectations.
The USD Index remained fairly calm at 106.35, EURUSD 1.0385, GBPUSD 1.1905 and USDJPY 139.50, but Gold and Silver gave up ground on a perceived decline in geopolitical risks. Gold fell to 1765 and Silver 21.20.
Bitcoin is trading fairly stable despite the fact that Genesis Global Capital, a larger crypto operation suspended customer redemptions in its lending business, caused by FTX collapse.
Today we are waiting for the EU Inflation at 10.7% and the usual US labor market data at 11:00 and 14:30. Tomorrow at 8 wea re awaiting the UK Retail sales.
Surprises are not unlikely from fed speakers but it could also be a fairly quiet day to take a calm look at the market and consider opportunities to trade and invest – without the need to react.
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.