Morning Brew May 23 2022
Senior Relationship Manager
US stocks rose yesterday with growth aided by a strong outlook by JP Morgan, the Dow and the S&P rose 1.98 and 1.86% and the Nasdaq 1.59%. Interestingly every comment I read believed the rally to be short lived.
The mood was soured by a bleak outlook by Snapchat that announced to miss it`s revenue target and to cut hiring, shares fell almost 30% in the aftermarket and sparked overall risk off sentiment.
Futures are 0.5% - 1% lower this morning with the US 500at 3932, the USTECH100 at 11830 and the GER40 at 14080. Neither US nor EU interest rates moved significantly, the US 10 year is at 2.83 and the EU at 1.023.
EURUSD gave up a little ground to trade at 1.0660 and GBPUSD at 1.2565. USDTRY is nearly at 16.
Gold and Silver had a calm day for once and are at 1856 and 21.75, Bitcoin remains near the 30k.
Remain nimble in your positions and consider options for high risk trades – in FX as well as exchange traded ones.
JPMorgan raised the forecast for interest income and affirmed its profitability goals, its stock 6% higher despite persistent questions about how much more it will spend on its businesses.
Raphael Bostic hinted that after two 50 BPS hikes it might be a good idea to halt hikes in September. Kansas City Fed President Esther George said “The road ahead could be bumpy “
Fed will start reducing its $9 trillion balance sheet next month.
Samsung to invest USD 356 Billion into over five years in strategic sectors including semiconductors and biopharma, noteworthy was that EV Batteries were not part of the announcement.
Toyota closed it`s production plan by about 100,000 to roughly 850,000 vehicles in June due to the semiconductor shortage.
Tesla closed at 674 and halted the recent selloff.
Peter wrote an article on Nvidia and Snowflake that is worth your time:
Earnings from Nvidia and Snowflake will take center stage on Wednesday. Both companies are still expected to show strong revenue growth but underneath the growth hype things are deteriorating. For Nvidia it is the crypto mining industry and for Snowflake it is a general slowdown in datacenters.
Today we are expecting a flurry of international PMI Data as the only key events:
France 9:15, Germany 9:30, EU 10:00 UK 10:30 US 15:45
Physically Settled Futures:
NGM2 will expire 25rd May at 19:30 GMT.
ENAM2 will expire 27rd May at 09:30 GMT.
FLGM2, TTFMM2 will expire 27rd May at 15:00 GMT.
NATGASUSJUN22 will expire 24th May at 15:00 GMT.
10YUSTNOTEJUN22, 30YUSTBONDJUN22, GASOLINEUSJUN22, GOLDJUN22, HEATINGOILJUN22 will expire 27th May at 15:00 GMT.
Latest Market Insights
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.