Saxo Market Call

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Today we note that there doesn't seem to be any obstacle to the market advancing higher at the moment, as US longer yields remain tame and financial conditions continue to ease on hopes that we are set for a soft landing. But the Fed is likely not happy with conditions easing so aggressively and will have its work cut out for it to push back against the market's advance if treasury yields won't do the work for them. We also preview this week's earnings and macro calendar, talk energy, agriculturals and a zany cotton market, the USD turning back higher in places and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX.

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Today we note that the big surge in yields at the long end of the US yield curve were likely the critical factor in capping and reversing the extension of the rally in equities yesterday. The US dollar found a bit of resilience on the development as well, if only half-hearted. Elsewhere, we zoom in on global natural gas supply concerns after the latest weekly US storage yesterday, discuss the grains outlook with a key report up late today and look ahead at the fairly busy macro calendar next week, while wondering how the Fed deals with re-establishing its hawkish credibility. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX.

Intro and outro music by AShamaluevMusic

Slide deck:  https://bit.ly/3Pg22Zq   -

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Today we look at the sharp correction in energy prices driving a softer than expected CPI print for the US in July, which saw sentiment responding by piling on to the recent rally and taking equities to new highs for the local cycle since June. Interestingly, the reaction to the CPI data has generated some tension as US treasury yields are trading sideways after erasing the knee-jerk drop in yields in the wake of yesterday's data. With financial conditions easing aggressively, the Fed faces quite a task if it wants to counter this development, with recent protests from individual Fed members failing to make an impression. Perhaps the Jackson Hole Fed forum at the end of this month is shaping up as a key event risk? Crude oil, the USD, metals, earnings and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX.

Intro and outro music by AShamaluevMusic

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Today we discuss the possible reactivity to today's US July CPI data point, especially if a hotter than expected core reading challenges the market's determined bet that inflation is set to roll over and normalize over the next couple of years. We also look at an equity market that is technically rolling over, a US dollar that needs to choose a direction, and compelling commodity stories and chart points in gold, crude oil and coffee. A semiconductor, EV, deglobalization, and Walt Disney focus on the equity coverage today. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX.

Intro and outro music by AShamaluevMusic

Slide deck:  https://bit.ly/3QykD3R   -

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The equity market turned tail after another upside burst yesterday, creating the first compelling technical reversal in a while, with no readily identifiable catalyst, though we maintain concerns that complacency on how this cycle will shape up is excessive, particularly on geopolitical concerns and de-globalization drivers. Today we also look at NVidia's ugly revenue miss, Grains, gas and metals in commodities, and earnings reports on tap for today. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX.

Intro and outro music by AShamaluevMusic

Slide deck:  https://bit.ly/3QtfvhK   -

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The market continues to hang on to its view that the peak in Fed rates is imminent and that it will cut from around mid-next year despite strong US data and Fed members making clear that another big hike is coming in September. Can this week's CPI data change that? We also discuss commodities, with oil prices possibly a bit complacent given tight supply, while metals are showing signs of turning and gold is "walking a tightrope" on the macro outlook. Today's pod features Ole Hansen on commodities and John J. Hardy hosting and on FX.

Intro and outro music by AShamaluevMusic

Slide deck:  https://bit.ly/3QoPX5l   -

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Today we look at market complacency continuing as the market seems to be pricing in a soft landing for the economy and eventual disinflation. We compare the course of the current US equity market drawdown from the top with the bear market of 2007-09, take a look at the market's reaction to the Bank of England's dire outlook for the economy in its meeting yesterday, discuss the impact of buybacks on the US equity market, preview today's US jobs report and more. Today's pod features Peter Garnry on equities and John J. Hardy hosting and on FX.

Intro and outro music by AShamaluevMusic

Slide deck: https://bit.ly/3zW1dk7   -

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Today we look at the market reaction to surprisingly strong ISM Services survey for July, which was completely at odds with the very weak July S&P Global Services PMI. We also discuss the implications and lack of confidence in the meaning of a new record inversion of the yield curve yesterday, especially vis-a-vis the risk of complacent forward assumptions on inflation normalizing. In particular, the market appears totally unprepared for stagflationary outcomes. We also discuss Europe's rumbling energy crisis, key equity stories and more. Today's pod features Peter Garnry on equities and John J. Hardy hosting and on FX.

Intro and outro music by AShamaluevMusic