Senior Relationship Manager
Summary: Fairly Calm For a Change
Good Morning,
Worries from the retail and semiconductor sectors weighed on risk sentiments despite strong retail sales and falling US Yields.
Indexes in the US declined between 0.1% and 1.5%and the German Dax fell as well. Target lost 13% on a cur outlook and an earnings miss, Micron pulled the semiconductor sector lower. After hours, Nvidia beat expectations.
The USD Index remained fairly calm at 106.35, EURUSD 1.0385, GBPUSD 1.1905 and USDJPY 139.50, but Gold and Silver gave up ground on a perceived decline in geopolitical risks. Gold fell to 1765 and Silver 21.20.
Bitcoin is trading fairly stable despite the fact that Genesis Global Capital, a larger crypto operation suspended customer redemptions in its lending business, caused by FTX collapse.
Today we are waiting for the EU Inflation at 10.7% and the usual US labor market data at 11:00 and 14:30. Tomorrow at 8 wea re awaiting the UK Retail sales.
Surprises are not unlikely from fed speakers but it could also be a fairly quiet day to take a calm look at the market and consider opportunities to trade and invest – without the need to react.
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist