Global copper producers meet in Chile this week, with talks expected to focus on M&A, surging demand, and tight supply for the metal behind the green transition
Fed can 'hit the mark and hold' with one more rate hike, Bostic says >>> earnings season in full swing this week, PMI data later on in the week and the usual Central Bankers interviews around the world..After the March 2023 banking crisis... JPM reported huge earnings, stock back up to pre *crisis levels.. (sure enough problems can re-emerge, but in reality a few very badly run banks went down, and no depositors lost money..as it should be really..), Consumer sentiment steady in mid-April but inflation expectations jump, University of Michigan says
BlackRock's Larry Fink says there's no big recession headed for the US economy, but inflation will be 'stickier for longer'
EURO Stoxx 50 index set for highest close since December 2007!
"Our base case remains that a recession will start in 3Q 2023." - BofA (first Fed tightens hard, then we get an inverted yield curve, unemployment rate starts to rise (TBC) and eventually if true, then comes some kind of recession. Industrial production on YoY basis is negative / Thread
BoC : Financial system has to adjust to higher interest rates, Macklem says
Brexit was supposed to be good for trade. It simply isn't
Apple announced a major acceleration of its work to expand recycled materials across its products, including a new 2025 target to use 100 percent recycled cobalt1 in all Apple-designed batteries
Morgan Stanley’s Wilson sees Stock Rally at risk of Yields rise
Bank of England considers major reform of deposit guarantee scheme
African Nations could embrace BRICS currency instead of the USDollar Economist, Larry Summers warns US is getting ‘Lonely’ as other powers band together. Former Treasury chief speaks on sidelines of IMF meetings. Summers: some voices see US representing less-favorable bloc >>>> This is clearly the new risk geopolitically... The Global West needs to see/accept/understand that many in the Global South are pivoting towards the Global East, west needs to wake up before it is too late
Energy crisis fuels coal comeback in Germany
Markets :
SPX500 dipped on higher UMich inflation expectations on Friday, but back to 4150 resistance, the overall big short out there helping keep VIX low and thus delta buying on dips. EUROstoxx50 making near all time highs
USD a little higher after UMich inflation data, markets been pretty short USD for a bit, consolidation if UST yields stay firm and risk of higher USD if/when UST yields move higher again
GOLD dipping from 2040usd for same reasons as above
Morgan Stanley’s Wilson Sees Stock Rally at Risk of Yields Rise >>> (clearly the key, rates expectations in late 2023 and 2024, from no cut in 2023 back to 75bps cut in 2023 and a total of 150bps into 2024, that is what fuelled markets lately (mild, hard, no recession etc..and inflation expectations)
Share of stocks outperforming S&P 500 is at record low: WilsonWarns tech rally could fizzle out on inflation, rising yieldsBy Sagarika Jaisinghani
(Bloomberg) -- The rally in the S&P 500 has been driven by only a handful of stocks, putting the index at risk of fresh lows if bond yields rise, according to Morgan Stanley’s Michael Wilson — one of the most bearish voices on Wall Street.
The percentage of stocks outperforming the S&P 500 on a three-month rolling basis is the lowest on record, Wilson said. That “is the market’s way of warning us we are far from out of the woods with this bear market,” the strategist — who was ranked No. 1 in last year’s Institutional Investor survey for correctly predicting the stock slump — wrote in a note.
The biggest risk could come from a slump in the technology sector if inflation proves sticky and bond yields rise, Wilson said. The tech-heavy Nasdaq 100 has surged 20% this year, partly as the sudden collapse of some regional US lenders sparked a rotation away from banking stocks and toward growth shares. Investors have also been betting that cooling inflation would prompt the Federal Reserve to stop hiking rates soon, but Wilson warned those expectations were premature.
“If there is one thing that can throw cold water on the large mega-cap rally, it’s higher yields due to a Fed that can’t stop hiking as soon as perhaps some investors are expecting,” Wilson wrote.
One of the biggest challenges is an over-reliance on prescriptive rules, often with little focus on the underlying risks of specific institutions. Simply requiring banks to hold more capital – without better risk management – won’t generate confidence in the markets. It creates a government backstop as a crutch to protect consumers or specific sectors, while rewarding risk takers and creating moral hazard.
EUROstoxxs50 - impressive !
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