Chinese Have Enough Money To Temper Recession, Tesla’s Record Profit
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The S&P500 was flat yesterday, as investors tried to make sense of the deluge of company earnings that hit the fan before, during and after the session. Microsoft didn’t gain on better-than-expected earnings, and Tesla announced record profits, but the share price jumped only 5% in the afterhours.
Stocks
Latest positive price action in stocks – which is now fading, and the positive price action in bonds suggest that the recession odds became less for stock traders, and more for bond traders since the start of this year. And that’s a risk for stock gains, besides earnings.
Bank of Canada
In central banks, Bank of Canada (BoC) hiked its bank rate by 25bp yesterday and announced to pause. The BoC decision spurred the expectation that the Federal Reserve (Fed) could do the same: hike by 25bp next week then pause.
Bank of England
For the Bank of England (BoE), investors are almost sure that the year will end with a 25bp hike due to the slowing economy.
Australia
But in Australia, the surprise rebound in Australian inflation, spurred the Reserve Bank of Australia (RBA) hawks yesterday.
Summary
In summary, investors’ hearts will continue to swing between slowing economy and easing inflation, and the bumps in inflation along the way.
But the data will tell who is right and who is wrong. All eyes are on US GDP today!
Watch the full episode to find out more!
- 0:00 Intro
- 0:47 Microsoft sold on slowing revenue warning
- 1:51 Tesla’s record profit sees limited reaction
- 3:34 Stock and bonds don’t price the same recession odds
- 5:11 FX update: USD down, euro, sterling, Aussie up
- 7:51 Chevron to buy back $75bn stocks!
- 9:01 Chinese have enough money to temper recession. They just need to spend it!
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
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