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Tag Archives: COVID

Powell Lights Up the Dollar

Overview:  Hawkish comments by Fed Chair Powell stoked a jump in yields and lit the dollar.  News that Alibaba was boosting its share buyback program to $25 bln from $15 bln helped lift HK shares, while the weaker yen favored Japanese exporters.  Most equity markets in the region advanced.  European bourses are showing a modest upside bias with US futures and are little changed.  The US 10-year Treasury yield is pushing five basis points higher to 2.34%.  European yields are also 3-5 basis...

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China and Hong Kong Stocks Plummet, Yields Soar

Overview: While the World Health Organization debates about downgrading Covid from a pandemic, the rise China and Hong Kong cases is striking.  A lockdown in Shenzhen and restrictions in Shanghai, coupled with a record fine by PBOC officials on Tencent drove local stocks sharply lower.  China's CSI 300 fell 3% and a measure of Chinese stocks that trade in HK plunged more than 7%.  The Hang Seng itself dropped 5%.  Covid in China and Hong Kong adds to the risk of more supply chain...

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Weekly Market Pulse: Well, That Was A Surprise

Last week when I wrote this weekly piece, the S&P 500 futures were down 80 points as Russia appeared poised to attack Ukraine, which they ultimately did last week. Today I sit here to write again and the futures are once again down, this time around 100 points. What’s interesting is that the level this evening is well above last Thursday’s low. I said last week that I didn’t expect Putin to go the full-scale war route and I was obviously wrong about that. I also said...

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Americans Love Spending Online In Certain Januaries

When it gets cold outside and the pandemic throws another variant spread into the mix, Americans have proved they will come together…in virtual fashion to go shopping for fashions and more on Amazon. For the second straight post-Christmas winter, retail sales recorded by nonstore retailers ended up being far, far better than expected. According to the Census Bureau’s latest report for the month of January 2022, seasonally-adjusted sales by mostly online operators skyrocketed by 14.5% from...

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Dollar Comes Back Offered

Overview:  The interest rate adjustment continues as the US 10-year Treasury yield firmed to test 1.90%, and the 2% target comes into view.  The German 10-year yield poked above zero for the first time since May 2019 and is straddling the area now. A bigger than expected rise in UK inflation lifted the 10-year Gilt yield to 1.3%, its highest level since March 2019 before pulling back.  Asia Pacific equities were a sea of red, led by a nearly 3% drop in Tokyo.  It is the fifth consecutive...

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The Fed and other Central Banks in the Week Ahead

The Fed's hawkish turn was extended.  It now seems clearer to more participants that to maximize the Fed's flexibility later in the year, it will need to raise rates in March.  With the Fed still buying bonds, albeit at a slower pace, the January 26 meeting is all but ruled out.  The pricing of the Fed funds futures reflects more than a 95% chance of a hike at the mid-March meeting.  The futures strip favors a hike each quarter.  It has three hikes fully discounted and about an 80% chance of...

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The Greenback has Abruptly Fallen Out of Favor

Overview: The 7% December CPI print did not prevent the dollar from weakening broadly.  The Dollar Index fell by 0.65%, the largest decline since late November. The 10-year yield rose by less than a basis point to poke above 1.74%.  The S&P 500 spent most of the session chopping in a 15-point range.  The greenback is still offered broadly, with the dollar-bloc and sterling leading.  Emerging market currencies are narrowly mixed, with the Turkish lira's 2%+ slide being the chief outlier. ...

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Weekly Market Pulse: On Second Thought…

In individuals, insanity is rare; but in groups, parties, nations, and epochs, it is the rule. Friedrich Nietzsche   The new year got off to quite a bang last week. It was almost as if someone flipped a switch and investors/traders suddenly decided that all that stuff they believed last year was just so passe. Growth stocks? Nah, who wants those? Crypto? Are you frigging kidding me? Inflation? No, that’s past its prime. Bonds? Not only no, but hell no. TIPS? Don’t need those...

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Weekly Market Pulse: Discounting The Future

The economic news recently has been better than expected and in most cases just pretty darn good. That isn’t true on a global basis, as Europe continues to experience a pretty sluggish recovery from COVID. And China is busy shooting itself in the foot as Xi pursues the re-Maoing of Chinese society, damn the economic costs. But here in the US, the rebound from the Q3 slowdown is in full bloom. Just last week we had pending home sales, ADP employment, both ISM reports, jobless claims,...

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Pessimistic Omicron Assessment Squashes Risk Appetites

Overview: A pessimistic assessment offered by the CEO of Moderna shattered the fragile calm seen yesterday after the pre-weekend turmoil.  Risk appetites shriveled, sending equity markets lower and the bond markets higher.  Funding currencies rallied, with the euro and yen moving above last week's highs.  The uncertainty weighs on sentiment and makes investors question what they previously were certain of.  The MSCI Asia Pacific Index fell over 1% before the weekend and again yesterday. ...

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