Morning Brew November 8 2022
Senior Relationship Manager
Summary: Unclear picture in to the election
Markets paint a bit of an unclear picture ahead of the mid term elections. Indexes closed higher yesterday, near 15 for the big three. Apple, Amazon and tesla dropped while Microsoft, Alphabet and Meta rose. Volume was fairly low with 10.5 bio shares traded in the US vs an average of 11.8%.
FX remained very interesting with the USD Index falling to 110 before recovering to near 110.50 while 10 year yields actually rose to 4.22.
EURUSD is at near parity, GBPUSD at 1.1485 and USDJPY 146.70. Gold and Silver are at 1670 and 20.67.
There is no major economic release today, there are some earnings but I would assume the key to be news around the election causing volatility.
Results are not expected until 1 or two in the morning (CET) and may well take days if there are tight calls.
Asian stocks are weighed by fears China may not reopen soon as new coronavirus cases surged in Guangzhou and other Chinese cities.
Expect nervous trading until there are clear directional impulses.
Joe Biden warned that a Republican victory could weaken the country's democratic institutions
Donald Trump is expected to announce a third run at the white house this month.
Elon Musk supported Republicans in the mid term election, this was seen as the reason for the tesla share`s decline yesterday.
Wednesday: Japan Trade Balance, China PPI and CPI,
Thursday: US CPI and Labor Data
Friday; DE HICP, UK GDP, Uni of Michigan sentiment
Tuesday: NTT, Mitsubishi, Nntendo, Deutsche Post, Mayer, Münchner Rück, Walt Disney, Occidental Petroleum, Constellation Energy
Wednesday: Honda Motor , Manulife Financial, Siemens Healthineers, TC Energy,
Thursday: Deutsche Telekom, Allianz, Merck, Tokyo Electron, Engie, Becton Dickinson, AstraZeneca, Brookfield Asset Management, National Grid, TransDigm
Friday: SoftBank Group, Cie Financiere Richemont
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.