Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
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Morning Brew November 1 2021
Erik Schafhauser
Senior Relationship Manager
Summary: Equities shrug off Apple and Amazon, Microsoft back in the top spot
Good Morning,
Rates and earnings continue to dominate the markets. Equities are focusing on the strong economy and strong earnings (more than 80% of companies in the S&P500beat expectations this earnings season, more than 50% have reported) while FX is concentrating on the shifting rate expectation and the USD is gaining broadly as rate hikes seem to be coming closer.
Goldman Sachs moved their prediction for the first hike forward to mid-next year from 2023 and is now seeing 2 rate hikes in 2022.
The USD Index is trading at 94.20, 94.50 is the next key level is the 94.50. EURUSD dropped 1% on Friday and is trading at 1.155, 1.1520 is the next support if broken we would target 1.1490.
Gold and Silver are relatively strong given that both normally react strongly to shift in the rate expectations, Gold is trading near support at 1782 and Silver at 23.80. Gold needs to firmly break the 1810 and the 1835 for a significant upside potential.
Bitcoin is trading above 60k at 60700 and needs the next impulse to make new highs or break to the downside.
Apple and Amazon both came under pressure on Friday as the holiday outlook disappointed, Microsoft overtook Apple as the most valuable company again. Nevertheless all big 3 Indexes could end the day positively and over the weekend the positive sentiment prevails. The Dax Future adds 0.4% to 15730 and the US Futures app 0.2%. The Chinese PMI came stronger than expected at 50.6.
The G20 so far delivered nothing too exciting so far.
Todays Calendar is fairly empty, the UK PMI at 10:00 the one from Canada at 14:30 CET and the US at 14:45 will be watched with interest, at 04:30 tomorrow the Royal Bank of Australia will announce rates, no change is expected (99% probability)
Key Earnings this week:
Monday: Industrial & Commercial Bank, Westpac Banking
Tuesday: T-Mobile US, Mondelez International, Amgen Inc ,Pfizer, Estee Lauder, ConocoPhillips, BP PLC, KKR
Wednesday: Novo Nordisk A/S, Booking Holdings, QUALCOMM Inc , CVS Health
Thursday: Siemens Healthiners , Toyota Motor,Deutsche Post AG ,Duke Energy Corp,Square Inc, Airbnb Inc, Enel SpA, Uber Technologies, MercadoLibre, Moderna Inc , Zoetis Inc Cigna Corp, Fidelity National
Friday: Alibaba Group Holding, Enbridge Inc
Saturday: Berkshire Hathaway
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