Morning Brew August 12 2024
Erik Schafhauser
Senior Relationship Manager
Résumé: A busy week ahead with US Inflation, the ZEW, Retail Sales and important earnings.
Good morning,
I had the pleasure of discussing last week’s market move and how to trade it with Finanzfabio (in German) : Korrektur oder Crash? Aktuelle Börsenlage (youtube.com)
Friday was a calm day for once which was probably good for the mental state of traders. The Dow gained 0.1% on Friday and lost 0.6% for the week, the S&P 500 gained 0.5% to end the week flat, the Nasdaq rose 0.5% to close the week at -0.18%. The GER40 rose 0.33% to finish the week in the green. Rheinmetall rose 12% last week on strong orders and broker reviews.
Please see Peters weekly equity comment Low recession probability, strong earnings, and US inflation
Adani Group is in focus of Hindenburg Research again, the shares fall in India
Ten year yields remained near 3.93 and the USD Index 103.18 EURUSD is 1.0920, GBPUSD 1.2765 and USDJPY 147.20, Gold and Silver are friendly at 2432 and 27.60, Bitcoin loses 3.5% to trade at 58500
With rate cuts looming, Althea points out High Interest Rates Leading to Recession: High interest rates, initially implemented to combat inflation, often precipitate economic slowdowns and lead to recessions. This pattern was evident in the early 1990s, 2001, and 2007-2009 recessions, where the Federal Reserve's rate hikes to control inflation contributed to the onset of economic downturns.
Ole commented on commodities Cocoa rose more than 10% on Friday.
In the coming week markets should remain on edge for a number of reasons:
- US Election: Trump is falling behind in the polls and seems to becoming more erratic under pressure
Global Unrest in Ukraine and the Middle East as Ukrainian President Zelinsky outlined, Ukraine had moved into Russian territory to "restore justice" and pressure Russian forces, Hamas is putting doubts on participating in talks with Israel, The US is sending more Navy assets to the region. - Global Economic uncertainty – Hard or Soft landing? Main Input will be US CPIon Wednesday and Retail Sales Thursday
- Earnings Highlights will be Homedepot and Wallmart
Trade safely