Head of Equity Strategy
Summary: Trump's executive order targeting Twitter is mostly political theater according to experts so investors should stay calm; the real risk is related to Q2 earnings. Talking about earnings the current consensus estimates are suggesting that the S&P 500 earnings will be back to new all-time highs by Q1 2021 which we find almost ridiculously optimistic. Finally we focus on Renault as the European carmaker is announcing today that it's laying off 14,600 employees to preserve profitability.
Twitter’s fight with Trump over fact-checking labels has got a lot of attention with Trump’s executive order yesterday calling for new relation under section 230 of the Communications Decency Act potentially revoking social media companies of their liability shield for third party content if they are censoring political content. Twitter’s shares are down 7% over the past two trading sessions and definitely be in focus again today. Legal experts are already calling a political theater as his move will have no legal impact. Another irony of removing the liability shield is that it would force social media platforms to be even more aggressive on removing third party content that could cause liabilities and thus potentially limit free speech even more. In the end this is all noise for shareholders at Twitter and Facebook. The real important events are the impact on online advertising spending in Q2.
Bond. Long Bond(s)
With real rates being too positive, we see three scenarios: Opportunity to lock in rates at cycle high, government overreach to keep the economy afloat or a complete reset of the economy.
Steen Jakobsen,
Chief Investment Officer
Is a bond bull market ahead? Inflation still poses a risk for investors, but the moment for increasing duration to your portfolio may be approaching towards the end of the year, when central banks might be forced to cut interest rates.
Althea Spinozzi,
Senior Fixed Income Strategist
The furious rate hike cycle has brought gains in the US dollar, but with stagflation risks in Europe and the UK and weakness in the Chinese economy, USD may have more room to run. But a strong dollar could also have repercussions for US growth, emerging markets and commodity prices.
Charu Chanana,
Market Strategist
With the cost of capital rising painfully, stagflation fears are back, illuminating the fragile state of the green transformation, while giving a tailwind to nuclear power, and threatening the growth of AI-related stocks.
Peter Garnry,
Head of Equity Strategy
With supply tightness not only in energy but all commodities, the momentum in commodity prices may continue, pressuring central banks to lower real rates. That could be a good setup for precious metals, including gold, silver and potentially platinum as well.
Ole S. Hansen,
Head of Commodity Strategy
As the pandemic showed, even the US Treasury can experience seismic shifts. With the government increasing the pace of issuing bonds to support fiscal spending, the complex Treasury market and regulatory constraints could spark a liquidity event.
Redmond Wong,
Market Strategist
The tide has turned for bonds. Given the current yields, bonds have become an attractive investment, with added benefits including lower risk than stocks, increased diversification and a steady stream of income unaffected by economic changes.
Peter Siks,
Investment Coach
