Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Morning Brew May 19 2022
Erik Schafhauser
Senior Relationship Manager
Good Morning,
What a day…
Equities sold off massively with the move kicked off by a worrying outlook and disappointing earnings by Target after Walmart had disappointed the day before. There is increasing worry that inflation is eroding purchasing power. Target fell by 24.9, Walmart lost a further 6.7% is now trading at 122 vs 148 on Monday. The Retail ETF lost 8.3%.
In addition to retailers, growth stocks dropped on rate fears and Tesla, Amazon and Apple suffered massive losses at 5-7%.
If nothing else, the move shows that markets are extremely on edge and worrying. It is also interesting that there seems to be a selloff the day after Powell spoke – not the same.
The USD gained against the EUR and the GBP to 1.0480 and 1.2368. Gold and Silver remained fairly stable at 1814 and 21.38.
British inflation rose at the fastest pace since 1982 as energy cost rise, Canadian inflation rose to 6.8% last month
Dovish comments by Charles Evans and Patrick Harker failed to impress markets.
Reuters reports that S&P Dow Jones Indices have removed Tesla from its S&P 500 ESG Index because of issues including claims of racial discrimination and crashes linked to its autopilot vehicles. Elon Musk stated that ESG was a scam. He also announced to vote republican after being disappointed by the democrats.
Japan`s Trade deficit rises despite 12.5% higher exports on surging costs.
Expiries
Physically Settled Futures:
CLM2 will expire 20th May at 15:00 GMT
PAM2 will expire 23rd May at 15:00 GMT
Expiring CFDs:
PALLADIUMJUN22 will expire 20th May at 15:00 GMT.
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