Erik Schafhauser Zürich Erik Schafhauser Zürich Erik Schafhauser Zürich

Morning Brew January 10 2022

Morning Brew 1 minute to read
Erik Schafhauser

Senior Relationship Manager

Summary:  CPI at 7% - Earlier Hikes?

Good morning,

A confirmation that the labor market is near overheating in terms of unemployment and earnings drove rate fears again, even thought outright Nonfarm Payroll number disappointed.

US Indexes dropped and closed the week lower, the Dow fell 0.3%, the S&P 500 1.9% and the Nasdaq 4.5%, the Nasdaq has the worst week in 10 months but is holding on support so far.The German Dax fell below 16000 again to 15950, mid range between the 16250 to the upside and 15750 at the lower end that are the initial levels to watch.

Bitcoin is approaching support at 40000, currently trading at 42000, Gold and Silver are trading near their key supports again at 1792 and 22.20, 1770/1745 and 21,90 are the levels to watch. The Turkish Lira is rising this morning to 13.40. 

 US Yields rose to 1.765 and are about to rise above the 21 high at 1.77, German long term yields have risen to 0.277 from the December low at -0.13. EURUSD remains in the narrow 1.12/1.14 range  while GBPUSD is approaching 1.36 as the next resistance level. The USD Index continues to meander the 96.

GameStop Corp GME.N jumped 7.3% on entering the Crypto space

Today we are looking at the Swedish Production data at 09:30 and the Sentix Index for the EU at 10:30 and the EU Unemployment Rate at 11.

Key for the Week will be the US CPI at 14:30 on Wednesday, expected at a stunning 7% and any hints at US rate policy.

On a political level, Nato and Russia are meeting in Geneva to discuss the situation in Ukraine and the EU and the UK are continuing their meetings.

How sensitive is your portfolio to interest rates?

Growth stocks have got an awful start to the year as a function of the US 10-year yield rising to the highest level in a year showing how growth stocks are more sensitive to higher interest rates. We go through why interest rate sensitivity matter for investors and how to reduce the equity duration risk.

Technical View on Nasdaq:

Nasdaq 100 has bounced off a few points above its strong support area 15.638-15.508. RSI still above 40 i.e. bullish sentiment despite the divergence from November.

A close below is likely to fuel a sell-off down to 15.000 possibly lower to strong support at around 14.480.



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