Morning Brew February 24 2023
Erik Schafhauser
Senior Relationship Manager
Good Morning,
We are in a rather interesting market situation. A recent Poll on the US500 by Reuters shows quite well the overall uncertainty. The average assumption is for the US500 to close the year at 4200 of approximately 5% above current levels. BUT the gap between the best and the worst target is reported at 40%, the highest since the global financial crisis. 70% of analysts polled see a high chance for a correction.
Our CIO Risk Monitor also shows a high probability of a risk off move.
It wight be worth to consider taking some profits or hedging gains if you are also on the cautious side. If you would like to discuss possibilities to manage risk, please contact us.
Yesterdays data was a mixed bag, Nvidia could gain massively mainly on a strong outlook for AI; the stock gained 14% yesterday and boosted Tech sentiment, the US GDP came slightly lower and the initial Jobless claims confirmed a tight labor market.
The US 500 gained 0.5%, the Nasdaq 0.7 and the Dow 0.3%, the GER40 is back above the 15500.
The USD Index is little changed at 104.50 as the 2 year yield remains high at 4.7% EURUSD is trading at 1.06, GBPUSD 1.2020 and USDJPY at 134.60. Gold and Silver give up ground to trade at 1824 and 21.30
.The incoming Governor of the Bank of Japan spoke rather hawkishly confirming that while the BoJs Yield Curve Control may need review, he gave no sense of urgency. Japanese Inflation remains high at 4.2%.
Today we are expecting the PCE Price Index expected at 0.4 monthly and 4.3% annually core. The PCE price index reflects changes in the prices of goods and services purchased by consumers in the United States and is a key inflation measure for the Fed.
Trade safely.
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