Senior Relationship Manager
Summary: Are we too certain of y year end rally? Cryptos at ATH
Good Morning,
After everybody called for a year end rally, equities seem scared of their strength, triggered not least by Elon Musk’s tweet if he should sell 10% of his stock holdings. Tesla fell app 5% yesterday. The Dow lost 0.3% and S&P500 as well as the Nasdaq 0.1%. The Dax so far fails to reach new highs and trades at 16015 in the December future.
US Yields remain below 1.50 and the USD under pressure, EURUSD trades near 1.16 after testing the 1.15 to the downside last week, the USD Index trades just below the 94 level and GBPUSD at 1.3570. Gold and Silver at 1824 and 24.40, Gold needs to break the 1835 for significant upside potential, currently we remain in the range.
Bitcoin and Ether trade at new all-time highs at 68000 and 4810
Todays agenda is slim with only the ZEW at 11:00 but tomorrow the US CPI will be released at 14:30 and will be the center of attention.
Reuters reports of high level meetings in China, suggesting there is a lot of attention on the real estate crisis in the country. Rating agency Fitch is downgrading Kasia to CCC on liquidity worries.
Softbank shares can rise by 10% on an announced share repurchase
Earnings:
Today: Bayer AG , Coinbase Global, NIO, DoorDash, National Australia Bank, BioNTech, Palantir Technologies
Wednesday: Credit Agricole SA, adidas AG, afirm Holdings, Walt Disney Infenion, Allianz, NTT, Tencent and EDF
Thursday: Siemens, Merck, Brookfield Coupang
Friday: Pingduoduo, Deuschte Telekom, Cie Financiere Richemont, Tokyo Electron, Sumitomo Mitsui Financial
Astrea Zendca Hapag Lloyd
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