EXANTE Macro Insights

Markets focused on the pace of Fed rate rises as the surge in gas prices pushes Europe closer towards recession 

• The world waits with bated breath 
• ​The Euro’s downward spiral
• A new crypto leader?
• Key data for the coming week
• ​Upcoming Corporate earnings

US:
S&P 500  ⬆ 9.35% QTD and ⬇ 13.15% YTD
Nasdaq 100  ⬆ 12.23% QTD and ⬇ 20.89% YTD
Dow Jones Industrial Average  ⬆ 6.93% QTD and ⬇ 9.44% YTD
NYSE  ⬆ 6.24% QTD and ⬇ 10.32% YTD 

Europe:
Stoxx 600  ⬆ 6.10% QTD and ⬇ 11.43% YTD
DAX  ⬆ 3.41% QTD and ⬇ 16.78%YTD 
CAC 40  ⬆ 7.83% QTD and ⬇ 10.71% YTD 
IBEX35  ⬆ 1.24% QTD ⬇ 5.90% YTD 
FTSE MIB  ⬆ 5.34% QTD and ⬇ 17.97% YTD
FTSE 100  ⬆ 4.22 % QTD and ⬆ 1.18% YTD

Global:
MSCI World Index  ⬆ 6.26% QTD and ⬇ 15.99% YTD
Bitcoin  ⬇ 10.2% MTD and ⬇ 53.6% YTD

Note: As of 6:30 pm EST 24 August 2022

Waiting for Powell. US markets are waiting for the start of the Fed’s yearly Jackson Hole Economic Symposium today and Fed Chair Jerome Powell’s speech on Friday morning. This year's symposium, titled "Reassessing Constraints on the Economy and Policy", has investors focused on what the Fed’s rate trajectory may be and just how it plans to battle inflation while ensuring a soft(ish) landing. The USD strengthened this week against the EUR, the GBP and the YEN. Energy related stocks were largely up this week, including Occidental Petroleum, Schlumberger, and Halliburton Company. Rising uncertainty this week led to increased volatility in tech stocks including  Alphabet, Microsoft, Amazon, Nvidia and Apple. Tesla will start trading on a split-adjusted basis today, after the shareholders voted to approve the 3-for-1 split at a shareholder meeting earlier this month.

Europe’s energy and currency conundrums. The continuing surge in gas prices is putting Europe at risk of recession, despite Germany’s surprising 0.1% q/o/q growth in Q2 and 1.7% y/o/y growth. As governments seek to contain the cost of living crisis and reduce costs for industry. There are growing fears that shortages and rationing could take place this winter. Gas prices rose again this week on the news that Nordstream 1 will be shut 31 August to 2 September. The EUR fell to a twenty-year low, falling below parity, even though money markets have priced in a 50 bps increase next month and placed 20% odds on 75 bps.

Is bitcoin falling out of favour? As market volatility continues to rise, with the VIX ⬆ 7.4% MTD, Bitcoin continues to fall, despite BlackRock, the world’s largest asset manager, launching a Bitcoin private trust last week as a result of  “substantial interest” from its clients.Fed interest rate moves are impacting the risk appetite of traders.  Although both Bitcoin and Ethereum have recovered ground since June, Ethereum seems to be gaining more interest with its highly anticipated Merge upgrade. This upgrade, due sometime in mid-September, is when the Ethereum blockchain makes its move to proof-of-stake from proof-of-work, which should make the ethereum network faster and more energy-efficient.

Key data to look out for this coming week 

In Europe: On Friday there is German GfK Consumer confidence data. On Tuesday there’s Eurozone Business Sentiment and Consumer Confidence Survey data and the German Harmonised Index of Consumer Prices.  On Wednesday there is German unemployment data and Eurozone HICP data.

In the UK: Monday is the Summer bank holiday meaning markets are closed.

In the US: On Friday look out for Core Personal Consumption Price Index, Personal Income, Personal Spending, and the Michigan Consumer Sentiment Index. Markets will be zeroed in on Fed Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium. On Tuesday there’s the Housing Price index, the S&P/Case-Shiller Home Price indices, Consumer Confidence survey data, and a speech from Federal Reserve Bank of New York President John Williams. On Wednesday there is ADP employment change data, the Chicago Purchasing Managers Index, 

Upcoming Corporate Earning Reports:

Friday: Ermenegildo Zegna, Meituan Dianping, JinkoSolar Holding Ltd.
Monday: Akoustis Technologies, Azure Power Global Ltd. Heico Corp., Catalent Inc., Ituran Location and Control Ltd., VivioPower International, SelectQuote Inc.
Tuesday: Hewlett Packard Enterprise, A-mark Precious Metals, ChargePoint Holdings, Kirkland's, Opera Ltd.
Wednesday: Burning Rock Biotech Limited, Chico's FAS Ltd., Express Inc., Five Below Inc., Greif Inc., Nutanix Inc., Donaldson CompanyThursday: 1-800 Flowers.com, Brady Corporation, Calavo Growers, Campbell Soup Company, Hello Group, Hormel Foods Corp., Sportsmans Warehouse Holdings, Oxford Industries, Tilly's Inc., Tuniu Corp, Farmer Brothers 

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