Morning Brew October 28 2022
Senior Relationship Manager
Summary: Earnings are Key - Daylight savings time ends in Europe
Economic events did not massively move the market yesterday as the ECB delivered what was expected with a dovish tilt and US data came a bit mixed and without a clear signal. .
After a period where FX was more thrilling than equities, that seems to have ended as earnings are back in focus with tremendous impact. Meta lost 24% of it`s value yesterday, amazon gave a poor outlook and is looking to open at around 97 after a close at 111. Apple could exceed expectations and the stock gained in the aftermarket. Peter wrote a note on Meta: Zuckerberg once had a motto of move fast and break things, and it seems he is now applying this approach to his free cash flow instead of his Metaverse product.
Elon Musk took over the ownership of Twitter yesterday, firing several executives and tried to calm fears among employees that layoffs were coming and assured advertisers. He also indicated he sees Twitter as base for a "super app" that offers everything from money transfers to shopping and ride-hailing
In terms of the Indexes, the Dow ended positive with 0.6% , the Nasdaq and the S&P500 closed lower at -1.6% and -0.6%.
The Bank of Japan maintained it`s dovish stance despite inflation at a 33 Year high, the Yen did not move significantly to trade at 146.40.
The USD Index is trading at 110.5 , EURUSD fell to below parity at 0.9975, GBPUSD 1.1550 and the Swiss franc 0.9910.
US 10 year rates hover near 4% and the Eu 10 year at just below 2%.
Today we are expecting a lot of economic data with European Inflations and sentiment data through the day and earnings of Exxon and Chevron before the market opens.
Pls remember the shift from daylight savings time on Sunday and the change to 5 hours time difference to the US until Nov 6th.
Key events today are:
8:45 France CPI
9:00 CH KOF Index
10:00 DE GDP
11:00 EU Economic Sentiment
14:00 DE CP
14:30 US PCE and Consumption
16:00 University of Michigan
Physically Settled Futures:
Maize - Nov 2022 (EMAX2) will expire 28th Oct 9:00 GMT
Copper - Nov 2022 (HGX2), Rough Rice - Nov 2022 (RRX2), Mini Soybean - Nov 2022 (XKX2), Soybeans - Nov 2022 (ZSX2) will expire 28th Oct 15:00 GMT
NY Harbor ULSD - Nov 2022 (HOX2) will expire 31st Oct 15:00 GMT
Random Length Lumber - Nov 2022 (LBX2) will expire 1st Nov 15:00 GMT
GASOLINEUSNOV22, HEATINGOILNOV22, SOYBEANSNOV22 will expire 27th Oct 15:00 GMT
CHINA50OCT22, SINGAPOREOCT22, TAIWAN95OCT22 will expire 28th Oct 2:00 GMT
OILUKDEC22 will expire 31st Oct 16:00 GMT
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.