Morning Brew January 24 2022
Senior Relationship Manager
Summary: Sell the Rumor buy the fact?
Nervousness got into the markets into the close of last week with fears about growth, inflation, rising rates and a possible escalation in the Ukraine conflict worsen.
Stocks sold off, Volatility is back in the game at 28%. Bitcoin crashes, over the weekend with lows near 30k to stabilize to 35k.
For the Week, US Indexes lost severely, the Dow lost 4.6% the S&P 500 fell 5.7% and the Nasdaq lost 7.6% Over night we see a slight recovery with futures up 0.8%. Volumes on US Exchanges was huge with 40% more shares being traded than on average. Global Stocks lost 4.2 Trillion last week acc to Bloomberg and the a chart of the ARK Innovation ETF relative to Berkshire Hathaway went viral showing worth are now at the same performance since early 2020 – Implying that Growth has no longer outperformed value. Elon Musk lost 25 bio in net worth and Jeff Bezos 20 in the week. The QQQ ETF traded 50 bio in Volume on Friday.
Earnings and the FOMC will be key but there are also lots of data points with potential to move the markets, such as Apple and Tesla earnings. 14000 is a key support in the Nasdaq, Dax around 1500
It may be tone for a pause in the sell off if there are no further bad news, in a sell the rumor buy the fact move. As this week has lots of potential for volatility, as I list below, consider looking look at optionality when taking on risk.
After a strong week, Gold is trading at 1838, above the key resistance at 1835, the weekly close was on that level. Silver is trading at 24.15. Gold ETF holdings rose the most in 18 months
There was relatively little move in the USD Index, it is at 95.80, 10 year yields at 1.76, EURUSD in back in Midrange between 1.12 and 1.14 after the breakout higher failed, GBPUSD is trading at 1.3540.
Oil had a strong week and broke above the 85.40 level (CL) and the 2021 high. That level needs to hold for further upside.
The top U.S. and Russian diplomats made no major breakthrough at talks on Ukraine on Friday and the US is asking Diplomats families to leave Ukraine. Taiwan reported a large incursion by China's air force in its air defense zone.
Renault SA, Nissan Motor Co and Mitsubishi Motors Corp plan to triple their investment to jointly develop electric vehicles acc to Reuters.
Key Economic Data:
Monday: International PMIs 9:15 France, 9:30 Germany, 10:00 EU, 10:30 UK. 15:45 US
Tuesday: German IFO, Case Shiller, Consumer Confidence
Wednesday: Canada Rate decision, US Rate decision
Thursday: US Durable Goods orders and GDP
Friday: Swiss KOF, EU Business Climate, Personal Income, US PCE, University of Michigan Consumer Confidence.
Tuesday: Texas Instruments, Johnson & Johnson, Verizon, American Express, Microsoft., NextEra, Raytheon, General Electric, Lockheed Martin
Wednesday: Christian Dior, Boeing, Anthem, , Tesla, Intel, Abbott Laboratories, AT&T,
Thursday: Diageo, Danaher, Apple, Visa, LVMH, Mastercard, Comcast, McDonald's, SAP SE, Blackstone,
Friday: Charter Communications, Chevron Caterpillar
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.