Senior Relationship Manager
Summary: Markets are trying to digest the FOMC and the US GDP
Good Morning
Markets remain nervous and swing rather wildly as traders are trying to make sense of the FOMC meeting and trying to position themselves. The US GDP came the highest in 38 years and sparked further rate hike fears. Interest rate futures show an expectation of almost 5 hikes this year. This boosted the USD, weighed on equities and hurt precious metals.
Rate sensitive stocks lost most, indexes lost minutely in the blue chip sector (Dow Jones -0.02) and much stronger in growth (Nasdaq -1.4%) The Russel 2000 is 20% off it`s high.
EURUSD fell below the 1.12 and could find support at 1.1090 and at 1.100 if the USD continues stronger, GBPUSD remains at 1.34, Gold fell to below 1800 and Silver 22.70. The USD Index rose above 97. The Bank of England and the ECB will announce rates next week. The BOE is expected to hike with 90% probability and the ECB not to with 97%.
Oil remained strong on expectations that Chinas imports will increase by 6-7%.
Apple beat expectations and is seeing the ship shortage becoming less painful, shares jump USD 9 after the close, Intel stated the Chip shortage was weighing on earnings and stocks fell 7%. Tesla closed almost 12% lower. Netflix rises more than 7% on news that the company could gain Bill Ackman as investor.
The Expiry of the Natgas Future caused severe price jumps, temporarily the price rose by 80%.
Watch for week- and month end nervousness today and stay nimble.
Key Economic Data:
Friday: Swiss KOF, EU Business Climate, Personal Income, US PCE, University of Michigan Consumer Confidence.
Companies: ,
Friday: Charter Communications, Chevron Caterpillar
Trade safely.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.