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Breakfast Bites - Wed Jun 21, 2023

Rise and shine everyone.

Another day, another dollar… except the US markets were not very happy giving us dollars yesterday as it swung around quite a bit. US Equity futures remain flat this morning with the S&P500 and Dow slightly higher and the Nasdaq-100 slightly lower. Bitcoin is higher closing in on $29,000, while oil is marginally higher and gold & copper remain flat. The Yield Curve remains heavily inverted at -0.97%

Breadth on the Nasdaq and NYSE still remain weak and after the last two closes, breadth is actually declining.

The big news from yesterday was FedEx gapping down after hours on earnings. While they beat EPS estimates, they missed on revenues by -3.6% and announced the retirement of their CFO.

The big news today is Chair Powell’s Testimony on Semiannual Monetary Policy Report to Congress before the U.S. House Financial Services Committee.

Asia and Australia

  • Asian equities ended mixed again Wednesday to continue the week's pattern. Hang Seng sold off sharply with mainland markets also down steeply this time.

  • Japan extended gains after weak open. Losses in South Korea and Australia, Taiwan a few points higher. India's Sensex touched record highs intraday

  • China unveiled a CNY520B ($72.3B) tax break package to boost sales of EVs and other green cars up to 2027.

  • Masayoshi Son said Softbank will go on the "counteroffensive" to resume investments in AI following nearly three years of asset sales and now has sufficient cash to invest again.

  • BOJ board member Adachi said inflation running faster than he had expected but it’s too early to normalize policy.

  • South Korea exports rose 5.3% y/y in first 20 days of June, partly on one extra working day, but semiconductors shipments fell sharply again.

Europe, Middle East, Africa

  • European markets slightly higher other than the UK.

  • UK inflation data for May unexpectedly rose. Both headline and core measures came in higher than expected. Headline 8.7% y/y vs 8.4% expected and 8.7% prior. Core 7.1% y/y vs 6.8% expected and 6.8% prior.

  • The London Times shadow MPC has voted 6-3 in favor of a BoE rate hike of 50 bps to fight back against stubbornly high inflation - the BoE rate decision is tomorrow. Swaps are still pricing in a 55% probability of a 0.25% rate hike.

  • The Ifo Institute published its latest economic update and said the German recession will be sharper than it previously expected. Expected GDP to decline by 0.4% this year, blaming impact of high inflation on consumption due to squeeze on real incomes.

The Americas

  • 3M (MMM) could face dividend cut & higher debt amid potential lawsuits

  • TikTok preparing move into online shopping

  • Dollar Tree reaffirms Q2 and FY23 guidance at ahead of Investor Conference' provides longer term outlook

  • Petrobras CEO: Not replenishing reserves would cause company to die within 30 years

  • Biden says Xi wants relationship with US, but diplomatic thaw will take time; dictator remark causes tensions


(news taken from Reuters, FT, Bloomberg; Calendar from Benzinga Pro)


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