Morning Brew January 31 2022
Senior Relationship Manager
Summary: Markets bounce after a week of heavy losses
We are going into an interesting week with key central bank decisions, lots of economic data and the first nonfarm Payroll of the year. The FOMC meeting last week has markets nervous and looking for clues on the course going forward.
After opening weak, US Index closed strong on Friday: Dow up 1.65%, S&P+ 2.43%, Nasdaq +3.13%, the biggest news were Apple, +7% Visa +10.6% , Western Digital and Caterpillar fall 7.3% and 5.2% on disappointing outlooks Chevron Corp missed Wall Street estimates and offered a weak outlook for this year's oil and gas production, shares fall 3.5%.
Main drivers were bargain hunting and weaker than feared US data, as well as a statement by Minneapolis Fed President Kashkari that a rate hike pause after a likely hike in March was possible. That indicted to many that the Fed would remain flexible in it`s approach. The overall expectation remains at close to 5 hikes this year.
10 Year Yields remain at 1.8% after a high of 1.85 on Friday, the US Index falls to 97.11 from 97.40 on Friday. Gold and Silver fell on Friday but especially Gold could hold above the 1782 support, currently 1788 and Silver trades at 22.40.
EURUSD remains near last weeks lows at 1.1165 while GBPUSD at 1.3420. EURGBP is trading at 0.8315 and at a strong support from since 2016, Thursday will be a big day with both central bank meetings.
Oil remains strong supply worries and high geopolitical tensions
As the Turkish Central bank continues to manage the exchange rate against the USD, Turkish President Erdogan dismissed the head of the statistics office on a reported disagreement over inflation.
Reuters reports that Russia is setting up a roadmap on Crypto regulation as Bitcoin remainsarround 37000.
We have launched a basked of Companies with strong female leadership set up by Peter Garnry:
Why women leadership?
Today we are launching our next equity theme basket focusing on women leadership. Why would do we need a women leadership basket? We are currently running an investor theme focus on ESG and the percentage of woman in companies’ executive team is part of the social aspect of companies. Recent research (here and here) also shows that there are mostly positive impact on company performance from having a more gender diversified executive team. This research from S&P Global also show that publicly listed companies with more women in the leadership team performs better.
Monday: Germany GDP Turkey Trade Balance, Italy GDP, EU GDP, Germany CPI, US CPI,
Tuedsday: UK Houseprices, Germany Retail Sales Switzerland Retail Sales, France PMI, Germany PMI and Unemployment, EZ PMI, Canada GDP, US PMI, ISM Manufacturing PMI
Wednesday: EZ HICP, ADP Employment
Thursday: International PMIs, EU PPI , UK rate decision, EU Rate decision, US Employment data and factory orders
Friday: Germany Industrial Orders, EU retail sales, US Nonfarm Payroll
Tuesday: Keyence Corp, United Parcel Service, Exxon Mobil Corp US PayPal Advanced Micro, Starbucks Gilead Chubb
Wednesday :Alibaba Novo Nordisk Alphabet Sony Mitsubishi T-Mobile Meta QUALCOMM AbbVie Thermo Fisher Novartis AG
Thursday: Roche Ford Amazon.com Eli Lilly Shell ConocoPhillips , Estee Lauder Cos Inc
Friday:: Bristol-Myers Squibb, Sano FP
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.