Morning Brew April 11 2022
Senior Relationship Manager
Summary: Markets cautions into CPI and ECB week, Earning Season kicks off with moderate expectations.
Yields rise ahead of the US CPI and the ECB rate decision this week, the US 10 Year is trading at 2.76 weighing on Equities, the USD Index falls slightly as the Euro could gain on the French election result. The Bund Future is at the lowest since 2015.
Stocks ended the week on a weak note with the S&P -1.26%, the Dow -0.27% and the Nasdaq -3.86%, the Nasdaq closed a few points below key support at 14,342. The GER40 held above support at 13,989 and is currently at 14175. Higher rates are putting pressure on growth stocks and semiconductors in particular.
EURUSD is at 1.0890 and GBPUSD testing the 1.30 to the downside, USDJPY broke above 125 and Bitcoin continued it`s decent but held above the 50d SMA. Currently we are trading at 42,240. EURUSD had initially gained 80 pips inthe open but failed to hold there.
December Wheat in Europe is trading at a new high, almost 40% higher then in January.
Marcron leads in French election but must meet Le Pen in a runoff election on April 24
China Inflation comes higher than expected at PPI 8.3 vs 7.9% expected and the CPI at 1.5% vs 1.2% expected.
Elon Must has apparently decided not to join the board of Twitter, this could make for interesting stock moves.
The earnings season is kicking off and the following companies are on our radar for the week. Analysts expect S&P 500 earnings to have increased by about 6% in the first three months of 2022 from a year ago and forecast profit growth of about 9% for the year,
- Monday: Yunnan Energy New Material, Zijin Mining Group
- Wednesday: Tesco, JPMorgan Chase & Co, BlackRock, Fastenal
- Thursday: China Northern Rare Earth Group, Fast Retailing, Ericsson, UnitedHealth, Wells Fargo, Morgan Stanley, Goldman Sachs, Citigroup, US Bancorp, PNC Financial Services, Coinbase, State Street
- Friday: Hangzhou Hikvision Digital
- Monday: China CPI and PPI, UK Manufacturing data and GDP, CPI for Norway and Denmark
- Tuesday: German CPI , ZEW, US CPI
- Wednesday: US PPI and BoC Rate decision
- Thursday: Sweden CPI, Turkey Rate decision, EU Rate decision and US retail sales
- Friday: French and Italian CPI , NY Fed and Industrial Production
Key events this week will be the US CPI on Wednesday and the ECB on Thursday. Inflation is well above the ECB forecast and we could see hawkish comments.
Any developments around Ukraine and further sanctions will also be of key importance as there seems to be no end to the war in sight.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.