Morning Brew August 18 2023

Good Morning,

Equities lost in a nervous session yesterday and in the last week, the US 500 is down 2.2%, the Wallstreet 30 -2.3% and the USTech100 -2.3%. the GER40 is at -1.5%

Dutch payments processor Adyen fell almost 40% yesterday on an earnings miss that acc to Reuters caused valuations to be questioned causing the company to lose 40% in Market capitalization.

CISCO could gain app 3% after good earnings, Walmart fell 2.2% despite beating expectations.

10 Year US Yields fell to 4.24 and the 2 Year is below 5% again, Althea points out that bonds can still be a good addition to the portfolio: Keep calm and consider bonds

In FX, the USD Index is hovering above the 200d Movind average, the Index is 103.35 and the moving average at 103.18. URUSD remains below 1.09 at 1.080 and GBPUSD 1.2740 ahead of the UK Retails sales at 8 this morning. Gold is holding at 1892 and Silver rose to 22.80.

Bitcoin was trading under pressure and fell to 26k

Peter wrote a good summary on state of green transformation energies and states: despite the commitment from governments and capital being made available for green investments, the returns across many green transformation stocks have been bad. The power point slides and hopes of the green transformation have certainly met a harsh reality in financial markets. If investors continue to bid down prices of green energy stocks then it will at one point begin to reduce available supply of capital because capital is always seeking the highest risk-adjusted returns.

China Evergrande Group has filed for protection from creditors in a U.S. bankruptcy  Since mid-2021, companies accounting for 40% of Chinese home sales have defaulted acc to Reuters.

What do we look at going forward?

Today, UK retail sales and EU Inflation will be key, next week will be a slow week for data but I doubt that will the same for markets as we are expect the BRICS meeting in south Africa, the Jackson Hole summit and lots of nervousness. Stimulus measures from China to boost spending and investment are expected, if the PBOC does not cut rates next week, it would be a surprise. The data comes in the night to Monday.

It will also be interesting if the sell off in Adyen spills over to other shares with high valuations

Friday August 18

Data: UK Retail sales, HICP

Earnings: Palo Alto Networks, Deere, Estee Lauder

Monday August 21

Data: China 1 and 5 year Rates

Expiries

Physically Settled Futures

• CLU3 will expire 22 Aug 2023 at 15:00 GMT
• KCU3 will expire 22 Aug 2023 at 15:00 GMT
• PAU3 will expire 23 Aug 2023 at 15:00 GMT
• ZOU3 will expire 23 Aug 2023 at 15:00 GMT

Expiring CFDs

• COFFEENYSEP23 will expire 21 Aug 2023 15:00 GMT
• PALLADIUMSEP23 will expire 22 Aug 2023 15:00 GMT