Senior Relationship Manager
Summary: Looks looks a slow start in to Q4
Good Morning,
The debt ceiling was extended yesterday but the infrastructure deal was delayed due disagreements in the democratic party, dampening the mood in the stock markets. Dow and S&P lost 1.6 and 1.2% while the Nasdaq fared better at only -0.44%, Asian stocks follow, along with Europe where the Dax and the the Eurostoxx future are both down more than 1.3%.
The USD Index remains high despite the fact that 10 year Yields fell to 1.48%, Gold and Silver could recover off the lows, Gold could rise above 1750 and Silver the 22 level, EURUSD remains below the 1.1600 at 1.1574 and GBPUSD trades at 1.3450
Oil remained high and there was quite a bit of interest in call options on oil at 200 in Dec 2022, which would mean more than a 100% increase in one year.
Ole Hansen was featured in Carsten Bondes` Podcast to give his view on commodities:
Today EU Inflation at 11 and US consumer spending, inflation and factory activity data at 14:30 will be significant, the most important data point during my holiday is likely to be the US Nonfarm Payroll in 1 week.
I am looking forward to seeing you in two weeks and am very curious which levels I will return to.
Erik
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist