Senior Relationship Manager
Summary: Risk On Seems the Play
Good Morning,
Risk continues to soar, US Indexes could rise again with the Dow up 0.3%, the S&P 500 +0.4% and the Nasdaq 0.7%. The S&P breaches the 200 Day Moving average, a bullish signal. All three were up for the week with the Nasdaq up almost 5%. The GER40 has entrenched itself above 15k to trade at 15120. Tesla fell on reported high discounts of up to 20%.
US 10 Year rates are at 3.5% and the yield curve remains inverted with the 2 Year at 4.22.
The USD Index is trading around 102, EURUSD 1.0840, GBPUSD 1.2235 and EURCHF is holding above parity as well as the 200 Day moving average, it is trading at 1,0035 The Japanese yen gained by over 3% against the USD last week, moving from highs of 132.87 to lows of 127.46 on Friday and 128. 09 now, It will remain in focus this week as well as BOJ meets for the first time this year and speculation about a further policy tweak is rife, according to our Asian team.
Gold and Silver could both gain on Friday and are at 1915 and 24.35, Oil is meandering the 80.
The overall sentiment seems to be that everybody seems to be expecting a recession that has not yet arrived, and traders celebrate the rate cuts that have not yet materialized – a rather curious setup that is difficult to trade. While markets remain nervous, the risk on trend seems to be firming - keep your risk under control though.
This wee we are expecting some earnings and economic data of medium importance, the World Economic Forum in Davos is back after Covid and comments from the participants may move the markets. Among participants are business leaders, Central Bank Heads and politicians from all over the world along with various celebrities. The topic this year is “Cooperation in a Fragmented World’
Economic Data & Earnings
Monday
Germany Wholesale Prices
Austria CPI
Tuesday
China GDP, Retail Sales and Output
German CPI
EU CPI
Japan Rate decision
Earnings: Morgan Stanley, Goldman Sachs, Interactive Brokers,
Wednesday
UK CPI
EU HICP Final
US PPI, Retail Sales, Capacity Utilization
Earnings: Charles Schwab,
Thursday
Swiss PPI
US Labor Data
Netflix, Procter & Gamble, Northern Trust
Friday
Japan CPI,
Germany PPI
Earnings: Sandvik, Schlumberger, State Street
A new fragmented world order can render some of today's infrastructure obselete, but it also calls for massive new investments across the globe, which requires a new set of strategic and tactical investment strategies.
Steen Jakobsen,
Chief Investment Officer
As globalisation turns to fragmentation, China seems set on playing a role in the global economy, while simultaneously working towards proofing its own economic situation from external shocks and crises.
Redmond Wong,
Market Strategist
The recent bank runs and ensuing challenges are reminicent of something we've seen before. Will it end like the S&L crises of 1986 and 1995?
Chris Dembik,
Head of Macroeconomic Research
Equity markets need to recalibrate to another - fragmented - global world. What's your view on equities in this market - are they going up or down?
Peter Garnry,
Head of Equity Strategy
With every development comes new opportunites, some of which could be in India. Have you considered the country as a part of your diversification strategy?
Charu Chanana,
Market Strategist
A collar is an option strategy that allows some protection while maintaining some upside potential. What investment would you like to use a collar strategy for?
Hans Oudshoorn,
Trainer Academy
There are arguments to be made for many commodities to have upside. Which are you paying the most attention to this quarter?
Ole S. Hansen,
Head of Commodity Strategy
In a very challenging macro environment, which currencies do you think will come out on top?
John J. Hardy,
Head of FX Strategy