Senior Relationship Manager
Summary: Sell in May and go away?
Good morning,
As expected yesterday the Fed did not change rates but Jerome Powell hit more dovish tones than expected by stating that while there was a lack of recent progress in the Fed’s battle with inflation, interest rates are likely headed lower The Fed annoubced it will reduce the pace at which it is shrinking its balance sheet by lowering the amounts of bonds to $25 billion running off monthly versus the current $60 billion.
10 Year Yields are at 4.61 and the USD Index at 105.70. EURUSD 1.0713, GBPUSD 1.2533 and USDJPY 155.77. As the Bank of Japan seems to be very active intervening in the currency, FX Options may be the best way to play the Yen. Gold and found buyers again but remain in danger as Kim points out
Equities traded mixed as the Dow gained on the dovish fed while tech seemed to confirm the old “Sell in May and go away proverb” after a weak sales outlook for Chips. Super micro computer shed 14%, AMD 9% and Nvidia almost 4%. Starbucks disappointed with it`s outlook and lost almost 17%.
The Dow gained 0.3% while the S&P and the Nasdaq lost 0.3%. Volumes were very high at 12 Bio. It is a bit curious that the topline indexes seem to move little but the underlying index components swing enormously.
Novo Nordisk beat expectations this morning and is clearly the stock to watch. The company is clearly in one of the sweet spot at the moment, shell also exceeded expectations.
We are expecting the Swiss CPI and PMI today, the US Initial jobless claims and Factory Orders, Apple will announce results today before we head into tomorrow Non Farm Payroll
Trade safely.
Thursday
- Data US Initial Jobless Claims
- Earnings: Novo Nordisk, Linde, Apple, Amgen, Shell, ConocoPhillips,
Friday
- Data EU unemployment, US Nonfarm Payroll, PMI,
Saturday: Berkshire Hathaway
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.