Macro: Sandcastle economics
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Morning Brew January 23 2024
Erik Schafhauser
Senior Relationship Manager
Summary: Calm before the storm?
Good Morning
Trading was fairly calm yesterday with few events, The Dow Jones breached the 38k for the first time and the US 500 had another record close but the moves were small with all the three US Indexes less than 0.5%. While moves were subdued, volumes were actually failry highat above 20 day average.
The most surprising stock mover was ADM (Archer-Daniels-Midland) a grain trading company whose shares fell nearly 25%. In Switzerland, Meyer Burger Technology AG remains interesting with question of survival realistic. Shares lost 45% so far this year. Deutsche Bank cut the price target from CHF0.78 to CHF 0.11
Chinese Equities remain unloved for now.
The USD Index and 10 Year Yields decline to 103.12 and 4.09 and for the Fed, the expectation has fallen to 135 basis points of cuts until December and less than 50% chance for a cut in March. For the ECB, traders see 130 bps in cuts and 57 for the Swiss National Bank. With the ECB on Thursday and the PCE Deflator on Friday, any shift here will drive the markets the second half this week
EURUSD is 1.0904, GBPUSD 1.2735 and USDJPY 148.02 despite the BoJ meeting. The BoJ left monetary policy unchanged and leaves traders guessing if and when it may adopt policy.
Silver traded in wide swings yesterday, falling from 22.50 to 21.95 and then rising back to 22.35.
Economic data is mostly done and dusted today, the Canadian house prices and EU Consumer confidence at 14:30 CET and 16:00 the only items left, earnings will be important but the real (planned) event risk starts tomorrow with the Tesla earnings in my view.
The Middle East and China stimulus could cause sharp market moves any time.
Three key aarticles from yesterday are Peters Earnings Watch, Ole`s COT report and Koens Volatility Report.
Earnings Watch: Can Tesla convince the market about growth?
COT: Commodities short-selling on the rise amid China woes and Fed caution
Tuesday
- Data Australia CPI, Japan Rate decision,
- Earnings: Verizon, 3m, GE, P&G, Haliburton. Netflix, Texas Instruments
Wednesday
- Data Japan Trade, International PMI,
- Earnings: AT&T SAP, Tesla, IBM, Servicenow,
Thursday
- Data DE IFO, Norway, Turkey and EU Rate decision, US Durable Goods, GDP ,
- Earnings: American Airlines, Blackstone, Intel, Visa, T-Mobile
Friday
- Data Japan CPI, PPI, US PCE
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