Morning Brew August 19 2024

Good morning,

What a week: US Equites had the best week of the year and the Nikkei the best in 4 as recession fears fade and FoMo kicks in on bullish statements. Friday was fairly quiet  in terms of move and volume but Indexes remained greed with the Dow up 0.24%, the S&P 500 +0.20%, the Nasdaq +0.21% Volume on US Exchanges was 20% below the 20 Day average, the Vix fell to 15.08. The GER40 is trading at 18300 and the Nikkei 37360, a little lower on the strong Yen. Nvidia closed the week at 124.50, Tesla 216.25, Apple 226.08.

This morning, ten-year yields are trading at 3.88, the probabilities for a 25 basis point cut are at 70% this morning, but this week will give important input. As of right now, the year-end rate is 95 BPS below the current level. The USD Index fell to 102.15 with EURUSD at 1.1040, GBPUSD 1.2950 the Yen gained a full percentage point against the USD at 146.10.

Gold rallied to record high and the highest weekly close ever on a softer dollar, rate-cut expectations and Central Bank purchases, Several Chinese banks have been given new gold import quotas from the central bank, anticipating revived demand despite record high prices, according to a Reuters report. Gold closed Friday above 2500 and Silver rose to 29 USD per ounce. Silver is testing the 50-day moving average at 26.19. Can we hold the recovery?

We are seeing substantial event risk this week:

• Russia: Ukraine: Russia is accusing the West of aiding Ukraine to attack Russia
• Middle East: Hamas is rejecting the proposed ceasefire solution as it was too close to Israel`s demands,
• China: The growth target of 5% seems to be in question and there are fairly laud calls for stimulus measures going as far as consumption vouchers
• US Election: Wit The Democratic National Convention is taking place in Chicago, Kamala Harris will speak late Thursday. Can she maintain the momentum?
• Economy: The Jackson Hole Symposium Thursday and Friday will give insights on central bank deliberations, topic is Reassessing the Effectiveness and Transmission of Monetary Policy”
• Releases: It is not the busiest week for data releases but there are some interesting data points such as the EU Inflation, China and Turkey rate decision and international PMI.

It will certainly will be an interesting week and the larger question will be if we see risk sentiment continue to recover or if we see more spikes of volatility – given recent central bankers comments it seems they are focused on maintaining calm waters.

Monday
- Data  Japan Machine Orders,
- Earnings: CNOOC Palo Alto Networks Inc
- Speakers: Waller

Tuesday
- Data China Rate Decision,  EU Inflation, Turkey rate decision, Canada CPI,
- Earnings: Medtronic, Lowe’s

Speakers: Bostic, Barr
Wednesday
- Data Japan Trade Balance
- Earnings: Agricultural Bank of China Xiaomi, Synopsys, Target, Snowflake

Speakers: FOMC Minutes

Thursday
- Data International PMI, US Initial Jobless claims, EU Consumer Confidence,
- Earnings: Intuit, Workday
Speakers: Jackson Hole Summit kicks off
Friday
- Data Japan CIP Canada Retail Sales, US New Home  Sales

- Earnings:  China Construction Bank, China Petroleum
- Speakers: 16:00 Powell speaks at Jackson Hole