EXANTE Macro Insights

EXANTE Macro Insights

Markets surged following softer than expected inflation data but the Fed is still talking tough.

  • A little breathing space for markets?
  • The chips are down but not out
  • US regulator’s crypto watch
  • Key data for the coming week
  • Upcoming Corporate earnings

US: 

S&P 500 11.21% QTD and 11.68% YTD
Nasdaq 100 16.25% QTD and 18.06% YTD
Dow Jones Industrial Average 6.50 QTD and 9.81 % YTD
NYSE 7.35% QTD and 9.39% YTD

Europe:

Stoxx 600 8.03% QTD and 9.82% YTD
DAX 7.17% QTD and 13.75%YTD 
CAC 40 10.14% QTD and 8.80% YTD 
IBEX35 3.14% QTD 4.14% YTD 
FTSE MIB  6.62 % QTD and 16.98% YTD
FTSE 100 4.71% QTD and 1.66% YTD

Global:

MSCI World Index 6.86% QTD and 15.52% YTD
Bitcoin 48.34% YTD

Note: As of 5:30 pm EST 10 August 2022

Market inflation reaction. Wednesday’s CPI fell below market expectations to 8.5% y//o/y in July, from June’s 40 year high of 9.1%, and with no increase in CPI between June and July. The drop was due to a fall in the cost of petrol, causing markets to surge as traders bet that the Fed will dampen their rate hike pace. The Nasdaq jumped 20%, heading into bull territory on the news with traders now anticipating a greater likelihood of a 50 bps rate rise in September rather than another 75 bps increase per the prior two meetings. The USD was down against the EUR, the GBP, and the YEN.  However, core CPI, the inflation measure without volatile food and energy prices and the one most closely watched by the Fed’s policymakers, recorded a small monthly increase of 0.3% (lower than June’s 0.7%) but still at a 5.9% y/o/y basis. This means that less optimism and more caution may be needed by investors in the months ahead. 

Too many chips for now? Major semiconductor chip makers such as Micron Technologies and Nvidia are expecting significant declines in revenue in Q4 as recession fears are causing a drop in demand and a slowdown in orders. However, longer term structural demand may remain strong as the dual drivers of decarbonisation regulation and efficiency inducing digitalisation should continue to increase demand for semiconductors, especially after the US Congress passed the $52.7 billion CHIPS and Science Act of 2022 bill which gives subsidies for US semiconductor production and research. The bill may also lead to more EV’s being built which will require more chips. Demand for EV’s, which fell during the height of the Covid pandemic, is, according to Fortune Business Insights, now expected to grow from $28.24 billion in 2021 to $137.43 billion in 2028 at a CAGR of 25.4% in forecast period, 2021-2028. Analysis by IHS Markit projects that 25–30% of new car sales could be electric by 2030 and then 40–45% by 2035.This should be good news for Micron Technology Inc.Intel CorporationAdvanced Micro DevicesGlobalFoundries as well as for Rivian AutomotiveFord Motor CompanyGeneral Motors Inc. and Lordstown Motors Corp.  

US crackdown on Crypto exchange platforms. Coinbase Global said its revenue had plummeted 61% in Q1 due to falling crypto prices and trading volumes. The company said it is currently under investigation by the US Securities and Exchange Commission (SEC) for its staking programs, which allow users to earn rewards for holding certain cryptocurrencies, its asset-listing process, and classification of assets. The US Treasury also prohibited Americans from using the cryptocurrency platform Tornado Cash as it says the platform has resulted in more than $7 billion of virtual currencies being illegally laundered. 

Key data to look out for this coming week 

In Europe: On Friday there is Eurozone industrial production data. On Tuesday are the Eurozone Economic Sentiment and Current Situation surveys. On Wednesday look out for Eurozone employment change and GDP data. On Thursday is Eurozone HICP data, a significant measure of changes in purchasing trends and inflation.

In the UK: On Friday there is GDP data, Industrial production data, manufacturing production data and business investment. On Tuesday is claimant count data, average earnings data, and ILO unemployment data. On Wednesday there is CPI and PPI. 

In the US: On Friday is the Michigan Consumer Sentiment Index. On Tuesday look out for building permits, housing starts, capacity utilisation, and industrial production data. On Wednesday there is retail sales data and the release of the FOMC minutes. On Thursday there is initial and continuing jobless claims data as well as the Fed Manufacturing Survey. 

Upcoming Corporate Earning Reports

Friday: Recruit Holdings, Broadridge Financial Solutions, Lotus Bakeries NV, Ebara Corp.
Monday: BHP Billiton
Tuesday: Home Depot, Walmart
Wednesday: Cisco Systems
Thursday: Applied Materials
Friday: Deere & Co

DISCLAIMER: While every effort has been made to verify the accuracy of this information, EXT Ltd. (hereafter known as “EXANTE”) cannot accept any responsibility or liability for reliance by any person on this publication or any of the information, opinions, or conclusions contained in this publication. The findings and views expressed in this publication do not necessarily reflect the views of EXANTE. Any action taken upon the information contained in this publication is strictly at your own risk. EXANTE will not be liable for any loss or damage in connection with this publication.

Este artigo é-lhe fornecido apenas para fins informativos e não deve ser considerado como uma oferta ou solicitação de uma proposta para compra ou venda de quaisquer investimentos ou serviços relacionados que possam ser aqui referenciados.

Próximo artigo
Criada por profissionais para profissionais.
privacy protect
Escritório de representação mais próximo:  28 Oktovriou, 365
Vashiotis Seafront Building
3107, Limassol, Chipre, +357 2534 2627
Versão 0.4.211-a668de37
A EXANTE doa 1 milhão de dólares para ajudar as crianças na Ucrânia

A EXANTE doou 1 milhão de dólares à UNICEF (Emergência), para apoiar crianças e famílias vulneráveis afetadas pela crise em curso na Ucrânia e as que fugiram para os países vizinhos.