Daily Digest:
w/c 15 July - Financials earnings reports kick off the week, then we get Netflix results Thursday. US Retail Sales is the standout macro data this week on Tuesday. We also get the latest ECB interest rate decision on Thursday.

Debt Celling Hopes Sees S&P 500 Breakout, DAX at a Record, Nikkei Hits 1990 Highs


Macroeconomic/ geopolitical developments

  • According to House Speaker Kevin McCarthy a deal to raise the debt ceiling is “doable” and maybe as soon as Sunday.
McCarthy and Biden
  • A re-pricing of Fed rate hike expectations suggesting the market is now beginning to price back in the possibility of a 25bps rate hike in June.
  • Earnings season done, the key takeaways. The tech stocks were the big winners, but the broader picture is not so rosy though, as there has been an overweight of companies issuing negative EPS guidance which suggests Q2 is looking shaky.

Global financial market developments

  • The major US stock averages were strong, with the S&P 500 finally breaking out of its range and joining  the Nasdaq to hit a multi-month high.
  • European indices posted solid gains to set multi-month highs, with the German Dax at a record level.
  • The Japanese benchmark, the Nikkei 225 got back to levels not seen since the 1990s.
  • US and European Bond yields surged to higher yields, with debt ceiling worries apparently in the rear-view mirror…
  • The US Dollar Index surged from near a multi-month low at the start of May to now hit a multi-month, retaining a positive tone.
  • Gold plunged from an early May multi-month high to a multi-month low, in reaction to the US Dollar strength.
  • Oil has consolidated the early May rebound from a multi-week low.

Key this week

  • Central Bank Watch: Fed speakers stay in focus, with Wednesday’s FOMC minutes the highlight of a quiet central bank week…
  • Macroeconomic data: A quiet data week, the standouts are Tuesday’s Flash PMI data and Wednesday’s UK CPI.
DateKey Macroeconomic Events
22/05/2023Eurozone Consumer Confidence (flash)
23/05/2023Flash PMIs for Japan, the Eurozone, the UK and the US; New Home Sales, Richmond Fed Manufacturing
24/05/2023UK CPI inflation, German IFO Business Climate, FOMC minutes
25/05/2023US Weekly Jobless Claims, Pending Home Sales
26/05/2023UK Retail Sales, US Goods Trade Balance, US Durable Goods Orders, US Core PCE inflation, final Michigan Sentiment

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued

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