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Futures Extend Gains, Escape Technical Bear Market After China Hints At Massive Stimulus

Futures Extend Gains, Escape Technical Bear Market After China Hints At Massive Stimulus

US equity futures rose for a 3rd day, rising above…



Futures Extend Gains, Escape Technical Bear Market After China Hints At Massive Stimulus

US equity futures rose for a 3rd day, rising above the -20% clutches of a technical bear market, and validating the best period of the year for risk assets...

... as investor fears about surging inflation were assuaged by the cooling of the oil rally and comments from the Federal Reserve about taking a tougher stance to cool price increases. Nasdaq 100 futures rose 0.4% by 730 a.m. ET, while S&P 500 contracts added 0.3%. Both indexes finished Wednesday’s session higher following the minutes from the Fed’s latest policy meeting, which showed officials considered raising interest rates for longer to tame runaway inflation.

Global stocks also rose as did bond yields, adding to cheapening pressure on Treasuries after a Bloomberg report that China is weighing a $220 billion stimulus plan. Europe's Estoxx50 gained 1.7%; Asia stocks closed higher led by Nikkei’s 1.5% rise as a revenue surge by Samsung assuaged fears about weakening consumer demand and soaring material costs. That sparked a rally in chipmakers, helping MSCI Inc.’s Asia-Pacific share index add more than 1%. The British pound gained after sources report PM Boris Johnson plans to resign.

Among notable premarket movers, Freeport-McMoRan Inc. advanced 4.3%. Copper rebounded from a five-day selloff in London, heading for the biggest gain since September 2018. Shares of US semiconductor companies rose in premarket trading on Thursday after Samsung Electronics reported a better-than-anticipated 21% jump in revenue. Bed Bath & Beyond shares jumped 9% after the home furnishings retailer’s interim chief executive officer and a pair of directors bought shares in the firm. GameStop shares surged 9.8% in premarket trading on Thursday after the video game retailer announced a four-for-one stock split in the form of a dividend. Other notable premarket movers:

  • US biotech stocks, especially those involved in developing cancer-related treatments, could be active following a Wall Street Journal report that Merck and Co. (MRK US) is said to be in advanced talks to buy Seagen (SGEN US) for above $200 a share. Watch shares in Iovance Biotherapeutics (IOVA US), Mirati Therapeutics (MRTX US), Arcus Biosciences (RCUS US), ALX Oncology (ALXO US), Cullinan Oncology (CGEM US). Seagen rises 5.4% in premarket trading; Merck slides 1%
  • Watch Endeavor Group (EDR US) and Lamar Advertising (LAMR US) shares as they were upgraded to buy from neutral at Citi, which in note says that even with new lower estimates, both stocks have attractive risk/reward at current levels.
  • Keep an eye on Consolidated Communications Holdings (CNSL US) as it was cut to sell at Citi, with the bank citing outperformance compared to some wireline pure-play peers, which leaves the stock trading on a “meaningful” valuation premium.

Fears of a recession have haunted US stocks this year, sending S&P 500 Index into a bear market, although as of this morning futures are once again out of the -20% drawdown. And with the FOMC minutes indicating the Fed remains on hiking autopilot for now, investors are now looking to the second-quarter earnings season to gauge whether the company profits are holding up against the surge in prices and supply constraints.

“Global equities bounce as pressure points such as rates, oil and the dollar begin to ease,” Stephen Innes, managing partner at SPI Asset Management, wrote in a note. “Momentum has swung higher, with tech-heavy benchmarks outperforming after Samsung’s revenue was better than feared.”

European equities trade well. Euro Stoxx 50 rises as much as 1.9%, completely erasing Tuesday’s rout. Miners, autos and energy names outperform within the Stoxx 600 which rose 1.4%, while UK mid-cap shares slightly increased gains following a report that Boris Johnson plans to resign as prime minister.  Miners outperformed the rising Stoxx Europe 600 index amid a rebound in metals and iron ore on news China is mulling $200 billion stimulus package to boost economy, while iron ore and metals rebound after recent declines; energy stocks also outpace broader market gains this morning after losing almost 8% over the last two sessions. Iron ore in Singapore and copper in London rose about 2%, recovering some ground after recent declines. Citigroup expects iron ore to outperform base metals amid China policy easing, while UBS downgraded its 2022-2023 estimate for the raw material, pointing to a demand slowdown. The Stoxx Energy sub- index rises 2.2% as oil edged higher with investors weighing concerns about a potential global slowdown against signs of still-tight physical markets. Carmakers posted some of the biggest gains in the benchmark Stoxx 600 index, which gained for a second day. Here are the most notable European movers:

  • Tenaris shares advance as much as 8.8% as Jefferies analysts upgraded the stock to buy, noting that they prefer Oil Country
  • Tubular Goods exposure among steel sector. Analysts upgrade OCTG steel price forecasts, while cutting stainless and carbon prices.
  • Drax jumps as much as 7.2% following an update that saw the power company forecast adjusted Ebitda for 2022 that’s above analyst expectations and an agreement to support the security of UK electricity supplies during the winter.
  • Nordex shares gain as much as 7.6% after reporting stronger than expected 2Q order volumes. Jefferies expects an acceleration of order volumes for the remainder of the year, mainly driven by additional onshore installations in the European market.
  • Storytel shares soar as much as 15% after the Swedish audiobook company released a 2Q streaming update that DNB’s analyst calls a “step in the right direction.”
  • Semiconductor equipment makers lead a rally in European chip stocks after Samsung posted preliminary 2Q sales that were slightly above expectations, easing fears that global chip demand might have already started tapering off. ASML rises as much as 4.9%, ASM International +5%, BE Semi +5%
  • Persimmon drops as much as 6.7% after it reported revenue for the first half that missed the average analyst estimate. Citi said home completions missed its estimate amid planning delays and labor shortages.
  • Chr. Hansen falls as much as 11% after narrowing its topline growth guidance. Based on quarter’s performance, company narrows organic revenue growth target for 2021/22 to 8-10%, from previous outlook of 7-11%.
  • SAS saw its share price fall 5% on Thursday as the airline revealed a drop in bookings toward the end of June due to notice of a pilot strike that became a reality on July 4.
  • SUSE shares slide as much as 11% before paring losses, after the software firm cuts its growth target for the annual contract value in the emerging segment. Jefferies says the 2Q results are in-line with expectations, but the outlook references macro impacts

Earlier in the session, Asian stocks rose, recovering most of their losses from yesterday, as semiconductor shares rallied and investors assessed the outlook for oil prices. The MSCI Asia Pacific Index climbed as much as 1.3%, hauled up by chip shares after Samsung Electronics reported a better-than-expected jump in revenue in the latest quarter. A gauge of chip stocks soared nearly 4%, on track for its best day since March.  The surge in tech shares helped benchmarks in Taiwan and South Korea lead gains in the region. Meanwhile, Hong Kong shares reversed losses as an easing of travel curbs in the city overshadowed broader concerns about a resurgence of Covid outbreaks in China.  Traders in Asia also took some solace in lower oil prices with the West Texas Intermediate futures trading below $100 a barrel, supporting the outlook for earnings in the oil-importing region. “We are seeing short squeezes in tech,” said Jessica Amir, a strategist at Saxo Capital Markets. Meanwhile, there’s optimism that a retreat in oil prices will allow people to spend less at the pump and more on retail goods, she said.  Still, higher input costs and worries about a global slowdown have pushed Asia’s stock benchmark down more than 18% this year, with traders debating over the scope of future US interest-rate hikes and the outlook for inflation. The record of the Fed’s June meeting showed the potential for even more restrictive policy to curb inflation. “The market correction over 1H2022 has improved the valuation proposition of equities, and the key going forward is for companies to better manage their profit margins,” Tai Hui, chief Asia market strategist at JPMorgan Asset Management, wrote in a note. “Value and quality should remain in favor until there is a clear peak in interest rates.”

Japanese stocks gained amid lower commodity prices, which could ease inflationary pressures moving forward and potentially lead to a softer stance from the Federal Reserve. The Topix Index rose 1.4% to 1,882.33 as of market close Tokyo time, while the Nikkei advanced 1.5% to 26,490.53. Sony Group Corp. contributed the most to the Topix Index gain, increasing 3.7%. Out of 2,170 shares in the index, 1,550 rose and 526 fell, while 94 were unchanged. “The situation has changed since the June FOMC meeting. With weaker economic indicators and the price of crude oil falling below $100 per barrel, some believe that perhaps the hawkish stance may not be as strong as it was in June at this point,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

Australia's S&P/ASX 200 index rose 0.8% to close 6,648.00, boosted by banks and rebounding mining shares as iron ore prices rose. The index was still trading near a seven-month low.  Australia’s trade surplus skyrocketed to a record high in May, driven by stronger prices of its key export - coal -while imports surged too in a sign of solid domestic demand.  In New Zealand, the S&P/NZX 50 index fell 0.3% to 11,112.16.

In FX, Bloomberg dollar spot index falls 0.3%. JPY and CHF are the weakest performers in G-10 FX, AUD and NZD outperform. Cable pops higher, stalling just shy of a 1.20-handle after news of PM Johnson’s resignation. The dollar fell versus most of its Group-of-10 currency peers as risk assets advanced. Antipodean currencies led gains while the Swiss franc and the yen underperformed. The euro fluctuated around $1.02. The pound rose by as much as 0.6% to $1.1999 on UK Prime Minister Boris Johnson’s plans to resign, following an unprecedented wave of resignations from his government over the past two days. He will stay on as caretaker prime minister until October, with a new Conservative leader set to be installed in time for the party’s annual conference. Gilts fell, led by shorter maturities. The Aussie and kiwi strengthened in risk-on price action as rising stocks and a weaker US dollar fuel a position squeeze. Aussie was also boosted by a report showing the trade surplus widened to a record high in May.

In rates, Treasuries were cheaper across the curve, extending Wednesday’s aggressive bear-flattening move following release of FOMC meeting minutes. 10Y TSYs traded  around 2.93% after rising 12bp in Wednesday’s selloff; 10-year bund yields are higher by 8.6bp, gilts by 3.9bp. US curve spreads are within a basis point of Wednesday’s close, which for inverted 2s10s was -7.6bp, approaching YTD low. The IG dollar issuance slate remains empty so far; just two names priced $4.2b Wednesday, paying more than 20bps in concessions on demand just shy of 3 times covered. Bunds extended their bear flattening move as haven buying waned and money markets raised wagers on the pace of ECB tightening. Short-dated German bonds lead a pronounced sell off with 2y yields rising over 13bps near 0.53%. Gilts follow with both curves bear-flattening. Peripheral bonds are mixed: tighter to core at the short end, wider in long-dates. Red pack euribor futures drop 18-19 ticks as money markets raise wagers on the pace of ECB tightening.

In commodities, WTI trades within Wednesday’s range, adding 1% to trade near $99.48. Base metals trade in the green; LME copper and tin rise over 4%. Spot gold rises roughly $6 to trade near $1,745/oz.

Looking at the day ahead now, data releases include the US trade balance for May and the weekly initial jobless claims, as well as German industrial production for May. Meanwhile from central banks, we’ll get the ECB’s minutes from their June meeting, and hear from the Fed’s Waller and Bullard, the ECB’s Lane, Stournaras, Centeno and Herodotou, and the BoE’s Mann and Pill.

Market Snapshot

  • S&P 500 futures up 0.4% to 3,864.25
  • STOXX Europe 600 up 1.4% to 413.23
  • German 10Y yield little changed at 1.29%
  • Euro up 0.3% to $1.0209
  • Brent Futures little changed at $100.77/bbl
  • MXAP up 1.1% to 157.65
  • MXAPJ up 1.1% to 521.21
  • Nikkei up 1.5% to 26,490.53
  • Topix up 1.4% to 1,882.33
  • Hang Seng Index up 0.3% to 21,643.58
  • Shanghai Composite up 0.3% to 3,364.40
  • Sensex up 0.7% to 54,101.85
  • Australia S&P/ASX 200 up 0.8% to 6,647.96
  • Kospi up 1.8% to 2,334.27
  • Gold spot up 0.2% to $1,741.73
  • U.S. Dollar Index down 0.22% to 106.86

Top Overnight News from Bloomberg

  • Gone are the days when investors would be buying cheap euro options on a relative basis ahead of this month’s meetings by the European Central Bank and the Federal Reserve. The relative premium to own exposure is now near 200 basis points on both the two-week tenor, that captures the ECB decision, and the three- week tenor, that envelopes the Fed meeting
  • The French government’s new round of measures to combat surging inflation will cost about 20 billion euros ($20.4 billion), according to Finance Minister Bruno Le Maire
  • The Bank of Japan is likely to consider revising its inflation and growth forecasts later this month as a weaker yen and cost-push inflation force more companies to pass on higher costs to consumers, according to people familiar with the matter
  • Treasury yields surged after minutes of the most recent Federal Reserve meeting underscored commitment to tighten aggressively to keep inflation from becoming entrenched
  • European electricity prices broke new records Thursday as gas futures soared, further squeezing households and businesses across the continent and forcing politicians to find ways to ease the pain of relentless cost increases
  • Hungary’s biggest interest rate increase since 2008 failed to stem the forint’s plunge as policy makers sought to support the weakest currency in emerging markets

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks traded mostly positive but with gains capped following the choppy performance on Wall St and after an uneventful FOMC Minutes which noted participants judged a rate increase of 50bps or 75bps would likely be appropriate at the July meeting. ASX 200 was kept afloat alongside strength in the mining and materials sectors, as well as encouraging trade data. Nikkei 225 was underpinned amid reports the BoJ was said to be completely committed to its easing policy. Hang Seng and Shanghai Comp. were mixed with Hong Kong pressured by tech weakness, while the mainland was initially subdued after the PBoC drained liquidity and with Beijing to impose China’s first-ever COVID-19 vaccine mandate, although Chinese bourses then pared losses as markets also digested MOFCOM's announcement to rollout measures to support auto consumption.

Top Asian News

  • China Builder CIFI Says No Perp-Bond Talks as USD Notes Tumble
  • China Official Reserves Drop to Lowest Since June 2020
  • China’s Cabinet Urges Greater Cybersecurity After Data Leak
  • Tokyo Reports 8,529 New Covid Cases, Most Since April

European bourses are firmer across the board, Euro Stoxx 50 +1.7%, in a continuation of the constructive APAC handover though action remains choppy. Stateside, futures are firmer across the board but the magnitudes more contained that European peers after yesterday's choppy action; note, relatively brief upside was sparked on China stimulus reports, via BBG. Within Europe, sectors feature noted outperformance in Basic Resources and Autos while some of the more defensively-inclined components are in the red.

Top European News

  • UK PM Johnson is to resign today (expected around 12:00-13:00BST/07:00-08:00ET), according to multiple reports. As it stands, it appears that Johnson wants to remain in place as a caretaker until a new Conservative Party leader can be assigned, which is likely to occur around the autumn given the impending summer recess. However, MPs are seemingly divided on whether they want to allow Johnson to remain, with some calling for the immediate appointment of an alternative caretaker such as current Deputy PM Raab.
  • Hungarian PM Orban's Chief of Staff says discussions with the EU have progressed re. funds, adopted the Commission's stance on four issues. Accepted the proposal that funds must be spent on energy independence, via Reuters.
  • Pound Rises on Report UK Prime Minster Johnson Plans to Resign
  • Sanctions Act as ‘Weapons of Mass Destruction,’ Says Melnichenko
  • France’s Public Finances Are a Risk for Euro Zone, Auditor Says

Central Banks

  • ECB's Enria (supervisory board) says conservative capital trajectories should be utilized by banks when announcing distribution plans; from the point of view of capital adequacy, we are asking individual banks to review their capital trajectories.
  • BoJ is expected to increase its FY22 inflation forecast marginally to slightly above 2% from 1.9% in its quarterly outlook due on July 21st, according to Reuters sources. Expected to lower economic growth forecast (currently 2.9%). BoJ will likely maintain ultra-low interest rates and dovish policy bias.


  • Pound perks up as UK PM prepares to stand down in face of mass ministerial and party mutiny, Cable back over 1.2000 vs low 1.1900 base, EUR/GBP closer to 0.8500 than 0.8550.
  • Aussie rebounds with risk sentiment and on back of record trade surplus, AUD/USD approaching 0.6850 from recent lows near 0.6760.
  • Greenback fades after forging further gains in advance of hawkish line from Fed minutes, DXY pivoting 107.000 within range below 107.270 high on Wednesday.
  • Loonie regroups with WTI ahead of Canadian trade and Ivey PMIs as USD/CAD probes 1.3000 from 1.3050+, Euro regains sight of 1.0200 level amidst retreat in EGBs pre-ECB minutes.
  • Yen slips on rate dynamics and digests source reports suggesting BoJ may tweak inflation forecast a fraction above 2% and trim growth projection in quarterly outlook next week, USD/JPY rebounds towards 136.00 from around 135.55.
  • Forint gets fleeting fillip from 200bp 1-week depo rate hike by NBH, while Zloty awaits 75bp tightening move from NBP; EUR/HUF tops 415.00, while EUR/PLN holds near 4.7850.

Fixed Income

  • Bonds back under pressure as risk sentiment continues to improve and most Central Banks remain hawkish
  • Bunds reverse from 151.65 to 150.15 before finding underlying bids, Gilts from 115.60 to 114.66 and the 10 year T-note from 119-05 to 115-15
  • Curves flatter or more inverted after FOMC minutes flag potential for even more restrictive policy


  • WTI and Brent are modestly bid benefiting from stimulus reports and the relative reprieve in the USD's recent ascension; benchmarks firmer by USD ~0.80/bbl.
  • US Private Inventory Data: Crude +3.8mln (exp. -1.0mln), Cushing +0.5mln, Gasoline -1.8mln (exp. -0.5mln), Distillate -0.6mln (exp. +1.1mln)
  • Dutch Minister says gas storage is 58% full, therefore the 80% winter target is achievable. Groningen gas field could be tapped in a emergency scenario
  • BofA says copper prices could slip below USD 6,000/tonne in the coming months. Click here for the full list of price forecasts from BofA.
  • Spot gold is, in a similar vein to crude, modestly supported on the USD breather, and steady between touted resistance/support at USD 1750.70/oz and USD 1735-37/oz respectively.

US Event Calendar

  • 07:30: June Challenger Job Cuts YoY, prior -15.8%
  • 08:30: June Continuing Claims, est. 1.33m, prior 1.33m
  • 08:30: July Initial Jobless Claims, est. 230,000, prior 231,000
  • 08:30: May Trade Balance, est. -$84.7b, prior -$87.1b

Central Banks

  • 13:00: Fed’s Bullard to Discuss US Economy and Monetary Policy
  • 13:00: Fed’s Waller Interviewed During NABE Event

DB's Jim Reid concludes the overnight wrap

If you're in any doubt about inflation I must say I was bowled over with shock at how much the tooth fairy left Maisie overnight as the first baby tooth in our household fell out yesterday. My wife told me over dinner that the tooth fairy was going to come tonight and I asked her what the going rate was? I mentioned 20p or maybe a bit more as it's the first one. My wife replied that the tooth fairy and her had agreed ten pounds. I nearly choked on my dinner and made it quite clear that this was a dangerous precedent to set one tooth into a three child settlement period. Inflation expectations can get ingrained this way. However this is one way of solving the intergenerational wealth divide I suppose.

If you’re looking for positives in a world as wobbly as my daughter's front teeth, in spite of all the bleak newsflow this week, the S&P 500 (+0.36% last night) has been up for three days in a row. However sentiment is bad enough that you'd be forgiven for not noticing. Indeed fears of a recession continue to abound in markets, with yesterday seeing another round of commodity price declines (outside of Euro Gas and electricity), further inversions of the Treasury yield curve, rising US yields with 2yr yields up an astonishing +24.5bps from the European afternoon lows, and continued concerns about a European energy crisis that left the Euro at its weakest level against the US Dollar since 2002. Some stronger US data was the bright spot that may have helped equities but it's been a bit of a random walk of late as weaker data has also recently helped equities by reining in Fed expectations. So tough markets to find a consistent narrative in at the moment. Makes calling the market reaction to payrolls tomorrow hard.

Looking at some of these moves and stories in more detail, commodities across the board were one of the biggest losers yesterday (ex EU gas and electricity), with the prospect of a global slowdown or recession sending Brent crude oil prices (-2.02%) beneath $100/bbl intraday for the first time since April, with only a partial recovery to $101.23/bbl this morning. When it came to metals, copper slid another -1.95%, taking the industrial bellwether down to a 19-month low (-29.54% from the peak 16 weeks ago), whilst even the classic safe haven of gold (-1.47%) hit a 9-month low. I mentioned in my chart of the day how the extent of the commodity declines we’re seeing right now have only been rivalled at three other points since the 1930s, which are during the initial Covid shock, the GFC, and the German invasion of France in 1940, which brings home just how infrequent declines of this sort are. As usual however, one exception to that pattern were European natural gas futures, which edged up another +3.59% to a post-March high of €171 per megawatt-hour. Meanwhile German electricity prices have surged, with 1-month forward power baseload prices increasing +7.38% to €371, their highest since the start of Russia’s invasion of Ukraine, which risks hurting the all-important German manufacturing sector.

Treasury yields sold off and the yield curve flattened, driven by strong data and a still resolutely hawkish Fed per the June meeting minutes. 2yr yields climbed +18.3bps (24.5bps off the lows), marking their largest daily increase since the WSJ article hinting the Fed was ‘considering’ a +75bp hike, and bringing 2yr yields back above 3%. Further out the curve, 10yr yields increased +12.3bps to 2.93%, led by real yields gaining +12.6bps. The renewed bout of flattening left 2s10s -7.6bps inverted, the most since early April. So a big day in US bonds. As we go to press, yields on the 10yr USTs (-1.1 bps) have slipped to 2.92% in Asia trading, although the 2s10s has steepened slightly back to a still-inverted -5.0bps.

Looking at the drivers, on the data side the ISM services index for June came in above expectations at 55.3 (vs. 54.0 expected), whilst the final composite PMI for June was revised up to 52.3 (vs. flash 51.2). And the JOLTS data on job openings showed a labour market that was still historically tight in May, albeit a bit less tight than it had been, with the number of openings coming down for a second consecutive month for the first time since the pandemic began, at 11.254m in May (vs. 11.0m expected).

The June Fed Minutes added to the narrative, where policymakers steadfastly communicated their desire to tighten policy to fight inflation. As with any minutes release, the comments are at risk of being stale, but it was illuminating that policymakers appeared to be in agreement that policy needed to get into restrictive territory, and that the risks were tilted toward losing control of inflation and having expectations un-anchor. Indeed, something relevant to recent market pricing that’s become more dovish since the June meeting, it said “many participants judged that a significant risk now facing the Committee was that elevated inflation could become entrenched if the public began to question the resolve of the Committee”. When all was said and done, Fed futures pricing by December 2022 increased +9.7bps to 3.37%.

On that theme of central banks, gilts underperformed their counterparts elsewhere in Europe, with the 10yr yield up +4.4bps after there were further signals that the BoE were considering a 50bps hike at their next meeting. Chief economist Pill said that their vow to “act forcefully” in their June statement “reflects both my willingness to adopt a faster pace of tightening than implemented thus far in this tightening cycle, while simultaneously emphasizing the conditionality of any such change in pace on the flow of new data and analysis”. However, sovereign bonds had a better performance elsewhere in Europe, with yields on 10yr bunds (-1.2bps) and OATs (-2.3bps) both moving lower. This was largely before the bulk of the US bond sell off.

Despite the accumulation of bad news, equities appeared to continue marching to the beat of their own drum. The S&P 500 staged another impressive late-day rally which left the index up +0.36%, after spending the morning in the red. Contrary to Tuesday, where only three sectors were in the green, only three sectors were in the red yesterday, so a much more broad-based rally. Tech names performed about in line, with the NASDAQ up +0.35%. Meanwhile the tails of the market underperformed, with the mega-cap FANG+ flat, and the small-cap Russell 2000 down -0.79%. European equities gained, with the STOXX 600 up +1.66%, although most of the increase came at the open to catch up with Tuesday’s late Wall Street rally. Significantly however, we saw the Euro weaken a further -0.82% against the US dollar to take it to its weakest level since 2002, at just $1.0182. My colleague George Saravelos evaluated how much lower the Euro could depreciate against the US dollar depending on which of four heuristics you believe. As a spoiler, yes, parity is in play, but do check out the full piece, here.

Those modest gains in the US stocks are echoing in majority of the Asian markets in early trade. The Kospi (+1.87%) is outperforming across the region, supported by a rise in Samsung Electronics after the company indicated in its earnings guidance that its operating profit likely rose to 14.1 trillion won ($10.8 billion) in 2Q22, up from 12.57 trillion won a year ago. Meanwhile, the Nikkei (+0.73%), Shanghai Composite (+0.51%), and the CSI (+0.56%) all are trading in positive territory, recovering some of their losses in the previous session. Elsewhere, the S&P/ASX 200 (+0.41%) is moving higher as Australia’s trade surplus hit a record high, although the exception to this positive trend has been the Hang Seng (-0.43%). Outside of Asia, DM stock futures are pointing to a steady start with contracts on the S&P 500 (+0.12%), NASDAQ 100 (+0.15%) and DAX (+0.87%) all rising.

Finally in terms of UK politics, PM Johnson lives to fight another day in the face of an unprecedented pace of resignations from his government and substantial pressure to quit. Since the resignations of Health Secretary Javid and Chancellor Sunak on Tuesday evening, more than 40 MPs have resigned as ministers or aides from the government, with Welsh Secretary Simon Hart becoming the third minister at cabinet level to resign. Otherwise, Attorney General Suella Braverman said publicly that Johnson should step down and that she’d stand in a leadership election, although she remains in post for now, whilst Levelling Up Secretary Michael Gove was sacked from the cabinet last night. In terms of next steps with increasing numbers of MPs calling for his removal, there are elections to the 1922 Committee of Conservative MPs next week, and if enough anti-Johnson MPs are elected to that, they are seeking to change the rules so that another confidence vote in Johnson can be held imminently (rather than waiting for a year since the last challenge as under the existing rules).

To the day ahead now, and data releases include the US trade balance for May and the weekly initial jobless claims, as well as German industrial production for May. Meanwhile from central banks, we’ll get the ECB’s minutes from their June meeting, and hear from the Fed’s Waller and Bullard, the ECB’s Lane, Stournaras, Centeno and Herodotou, and the BoE’s Mann and Pill.

Tyler Durden Thu, 07/07/2022 - 08:07

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Singapore holds lead position in Omdia Fiber Development Index

Singapore holds lead position in Omdia Fiber Development Index
PR Newswire
LONDON, Oct. 5, 2022

LONDON, Oct. 5, 2022 /PRNewswire/ — Singapore has again emerged as leader in Omdia’s Global Fiber Development 2022 Index, with maximum scores in seven …



Singapore holds lead position in Omdia Fiber Development Index

PR Newswire

LONDON, Oct. 5, 2022 /PRNewswire/ -- Singapore has again emerged as leader in Omdia's Global Fiber Development 2022 Index, with maximum scores in seven of the nine metrics. It is closely followed by South Korea, China, the UAE, Qatar, and Japan. All territories in the leading cluster benefit from strong national broadband plans with ambitious targets around ultra-high-speed services.

Historically, several otherwise highly developed broadband territories that rank lower in the fiber index tended to suffer from less clear or ambitious national plans, providing weaker incentives for operators to invest. However, due in part to the COVID-19 crisis demonstrating how important broadband networks are, governments are now strengthening their broadband targets and increasing their focus and investments in fiber-based infrastructure.

Research Director Michael Philpott said: "Fiber investment is an essential metric for government institutions and other stakeholders to track. As a broadband-access technology, optical fiber provides an optimized, highly sustainable, and future-proof quality service. This superior level of quality is essential for the development of future digital services and applications across all verticals.

"With increased efficiency stimulating greater innovation, high-speed broadband has been proven to drive not just consumer satisfaction but national economic indicators such as GDP and productivity. Only by maximizing investment in next-generation access can countries optimize their growth potential, and fiber-optic technology is key to that investment."

Omdia's Fiber Development Index tracks and benchmarks fiber a broad set of fiber investment metrics across 88 countries, including:

  • Fiber to the premises coverage
  • Fiber to the household penetration
  • Fiber to the business penetration
  • Mobile cell site fiber penetration
  • Advanced WDM technology investment

Based on Omdia's analysis of Ookla Speedtest data, the Index also quantifies the overall broadband quality of experience improvements driven by that investment, namely:

  • Median download speed
  • Median upload speed
  • Median latency
  • Median jitter

Michael Philpott and a team of Omdia analysts will be presenting and debating a wide range of upcoming telecoms issues and trends at Network X between 18-20 October 2022. Register for a media pass or request a virtual briefing here.


Omdia, part of Informa Tech, is a technology research and advisory group. Our deep knowledge of tech markets combined with our actionable insights empower organizations to make smart growth decisions.

Media Contact
Fasiha Khan / T: +44 7503 666806 / E:


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Three Infrastructure Investments to Buy as War and Inflation Rage

Three infrastructure investments to buy as war and inflation rage offer ways to overcome ongoing economic risks in pursuit of precious profits. The three…



Three infrastructure investments to buy as war and inflation rage offer ways to overcome ongoing economic risks in pursuit of precious profits.

The three infrastructure investments to buy as war rains terror and destruction, inflation rampages and the Fed raises rates feature companies that appear well-positioned to succeed amid market mayhem. Stocks have advanced in the past couple of trading days, but the economic and geopolitical risks still leave many prognosticators warning that a new 2022 market bottom may yet lie ahead.

One of the three infrastructure investments to buy showcases a company whose unmanned drones have proven their value in Ukraine as the nation’s outnumbered defenders recently have begun to push back a Russian invasion of more than 120,000 troops that began Feb. 26. Another company on the list of three infrastructure investments to buy includes a producer of solar panels that could help alleviate a war-related energy shortfall in Europe due to Russia cutting its supply of gas to nations opposing its attack of Ukraine.   

Three Infrastructure Investments to Buy Look to Evade Financial Fallout

“Stocks have been beset with no shortage of problems in recent weeks,” wrote Mark Skousen, PhD, to subscribers of his weekly Home Run Trader advisory service. “The primary negative, of course, is that the Federal Reserve is determined to slow the economy, reduce demand, and thereby bring down inflation.”

Mark Skousen, Forecasts & Strategies chief and Ben Franklin scion, meets Paul Dykewicz.

However, too much tightening, too fast, risks pushing the United States into a recession, continued Skousen, an economist who uses his analysis of inflation, interest rates and monetary policy in recommending stocks and options to buy. Economic statistics are showing a slowdown in the economy, if not a recession, he added.

“Even though real gross domestic product (GDP) is slightly negative, second-quarter gross output (GO) — which measures total spending in the economy — grew by 1.7% in real terms,” Skousen stated. “GO includes the supply chain, which is still catching up from the lockdown-induced shortages.”

Three Infrastructure Investments to Buy Face ‘Super-Strong’ Dollar

Additional concerns include a “super-strong dollar,” sliding consumer confidence and a cooling residential real estate market, Skousen counseled.

Investors can consider an exchange-traded fund that offers broad exposure to companies providing automation infrastructure, said Bob Carlson, a pension fund manager who also leads the Retirement Watch investment newsletter.

Bob Carlson, investment guru of Retirement Watch, talks to Paul Dykewicz.

Carlson suggested Robo Global Robotics and Automation (ROBO), a fund that seeks to follow an index that is concentrated in robotics-related or automation-oriented companies. The fund had decent performance until 2022 when it plunged. The fund became caught in the downdraft that befell technology and industrial companies.

Both sectors have done poorly as interest rates rose in 2022, Carlson commented. The fund is down nearly 40% in 2022, while its three-year return is just shy of an annualized 6%.

The fund owns 81 stocks and has 17% of the fund in the 10 largest positions. ROBO’s top holdings recently consisted of Cognex (NASDAQ: CGNX), Intuitive Surgical (NASDAQ: ISRG) and IPG Photonics (NASDAQ: IPGP).

Chart courtesy of

Three Infrastructure Investments to Buy Buoyed by Unmanned Drone Stock

“Additive manufacturing technologies are at an inflection point in their ability to solve challenges faced by manufacturing companies, particularly with recent labor shortages and supply chain disruptions,” according to Chicago-based investment firm William Blair & Co. “Historically, additive manufacturing applications have been limited by productivity capabilities and lack of industrial strength materials.”

Executives of AeroVironment, Inc., (NASDAQ: AVAV), an Arlington, Virginia-based maker of unmanned drones and other multi-domain robotic systems, recently gave a presentation to William Blair analysts about how software from its Plank and Progeny acquisitions provided a key competitive advantage. Indeed, the success of AeroVironment’s “kamikaze drones” in Ukraine may extend into Asia.

AeroVironment officials compared the Ukraine War-related Switchblade media coverage to “100 SuperBowl ads worth of press.” Before the war, AeroVironment was not even authorized to export the Switchblade.

“It was used in the Middle East for over a decade, but it was viewed as a niche offering,” William Blair analysts wrote. “Ukraine is providing a testing ground that proves the Switchblade 300 is incredibly valuable. Now it has U.S. State Department permission to sell to more than 20 countries. In mid-September, it was reported that Japan is evaluating purchasing several hundred kamikaze drones and is evaluating AeroVironment’s Switchblade.”

A recent Switchblade 600 contract for Ukraine valued at $2.2 million may be a tipping point. On Sept. 15, almost six months after an initial report that a contract was in the works, it came to fruition.

While Javelin, Stinger and TOW traditional missile systems have a three-mile maximum range, the Switchblade 600 has a 20-mile top range with similar effects. The Switchblade 600 has the same size warhead and can be launched without a visual lock on the target, William Blair analysts wrote in a recent research note.

AeroVironment Stands out Among Three Infrastructure Investments to Buy

William Blair rated AeroVironment to “outperform” the market and indicated it appears to be the favorite to win the Army $1 billion/10-year FTUAS program, but an executive at the robotics company estimated that the U.S. Navy addressable market may be larger than the potential market for the Army. Software from Planck, acquired by AeroVironment, enables the JUMP-20 military battlefield drone to perform vision-based autonomous landings onto moving platforms, such as maritime vessels.

The JUMP-20 is a vertical takeoff and landing (VTOL), fixed-wing unmanned aircraft used to provide advanced multi-sensor intelligence, surveillance and reconnaissance (ISR) services. AeroVironment’s systems “flourished” during Navy IMX 2022 exercises earlier this year, according to William Blair. 

Regarded as the largest unmanned exercises in the world, IMX 2022 showed how AeroVironment’s LEAP software received feeds from manned aircraft, unmanned aircraft, manned vessels and unmanned vessels. At IMX 2022, AeroVironment’s LEAP software was not supposed to be the hub, but when other software “was not executing.” AeroVironment’s LEAP software assumed the hub role on an ad hoc basis.

“We expect AeroVironment’s success at IMX 2022 to lead to contracts for its JUMP-20, Puma and Switchblade aircraft down the road,” the William Blair analysts wrote.

Chart courtesy of

Three Infrastructure Investments to Buy Include Standex International 

Standex International Corporation (NYSE: SXI), a multinational manufacturer of food service equipment, engravings, engineering technologies, electronics and hydraulics headquartered in Salem, New Hampshire, has many growth paths ahead of it. Rated by William Blair to “outperform” the market, Standex International could materially accelerate organic growth to 10% or more during the next two to three years, excluding its commercial solar panel production volumes for an innovative Gr3n joint venture with Italy’s Enel (OTCMKTS: ENLAY).

That partnership with a multinational manufacturer and distributor of electricity and gas has gained importance due to the suspected sabotage of both under water pipelines of the Nord Stream 1 from Russia to Western Europe, along with one line of Nord Stream 2. Seismologists in Denmark and Sweden suggest that sizeable explosions on the order of 100 kilograms of TNT occurred in both incidents.

With Russia’s President Vladimir Putin facing unexpected battlefield setbacks more than six months after he ordered a Feb. 26 invasion of neighboring Ukraine that the former KGB agent euphemistically called a “special military operation,” the pipeline sabotage seems targeted to hurt European nations as winter nears. Since Putin ordered troops into Ukraine in February, Russia has cut supplies of natural gas to Europe to heat homes, generate electricity and fuel factories.

European Leaders Complain of ‘Energy Blackmail’ by Putin

European leaders have accused Putin of using “energy blackmail” to weaken their support for Ukraine as the country seeks to repel Russia’s aggression.

Without presenting any evidence, Russian officials are attempting to blame the United States for the apparent sabotage, even though the affected nations are among America’s closest allies. President Biden countered the accusations were the latest in a continuing Russian campaign of “disinformation and lies.”

Biden also described the explosions of the Nordstream pipelines as acts of “sabotage” and discussed sending divers to examine the pipelines to find evidence that could be brought to light. Russia’s audacious move to “annex” Ukrainian territory in a Putin-led ceremony last Friday, Sept. 30, was declared illegal by Ukraine, the United Nations, the United States and many other Western allies who said it violated Ukrainian and international law.

Solar Panel Design Aids One of Three Infrastructure Investments to Buy

Standex further plans to benefit from significantly higher research and development (R&D) investments for new product development to “materially increase organic sales growth,” William Blair opined. New product launches are expected across all five of Standex’s businesses in fiscal 2023, including high growth end-markets such as renewable energy, electric vehicles, human health, commercialization of space and sustainable products.

Standex’s Gr3n joint venture could attain full commercialization by mid-decade, potentially becoming Standex’s sixth business segment. The result could boost Standex’s “organic sales growth” to the low teens in the next three to five years, the William Blair analysts wrote.

The joint venture has developed and tested a prototype for a highly innovative, extremely efficient and 100% recyclable new solar panel design that is 30-35% more efficient and weighs 38% less than traditional glass solar panels. With interest in solar panels rising as the European Union (EU) scrambles to replace the 40% of its energy previously sourced from Russia, Standex is expanding electronics’ production capacity in Germany, China and India, the investment firm reported. 

“If the new recyclable, highly efficient solar panel can be cost-effectively produced, it could become the largest new product in Standex’s history,” according to the William Blair analysts.

Chart courtesy of

U.S. CDC Halts Its Country-by-Country Travel Notices

The U.S. Centers for Disease Control and Prevention (CDC) dropped its country-by-country COVID-19 travel health notices on Monday, Oct. 3. Those warnings began early in the pandemic as COVID-19 cases and deaths climbed.

COVID risks affect supply and demand for infrastructure stocks, but not as much as cyclical companies whose share prices can soar when economic conditions are favorable but fall fast when inflation, a potential recession and Fed interest rate hikes imperil stock prospects. Savvy investors monitor COVID-19 outbreaks and lockdowns to forecast how certain stocks and sectors, such as infrastructure, are affected.

Another encouraging sign occurred when Canada announced on Sept. 26 that it would remove all remaining COVID-19 entry restrictions, such as testing, quarantine and isolation requirements. That development could boost trade and tourism between that country and the United States.

China’s strict zero-tolerance COVID policy continues to be controversial and recently sparked a rare protest in its technology hub of Shenzhen, social media video showed. The dissent came after government officials ordered a sudden lockdown due to 10 new infections on Sept. 27 in the city of more than 18 million people. Officials ordered residents in three districts there to stay home.

China has locked down more than 70 cities fully or partially to preserve its zero-tolerance policy of COVID. However, 27 people were killed and 20 more were injured when a quarantine bus overturned on a mountain road on Sept. 20.

U.S. COVID-19 deaths ticked up by nearly 4,000, up about 1,000 compared to roughly 3,000 the previous week. Cases in the country totaled 96,481,081, as of early Oct. 5, while deaths jumped to 1,060,408, according to Johns Hopkins University. America stands out dubiously as the nation with the most COVID-19 deaths and cases.

Worldwide COVID-19 deaths in the past week rose by more than 11,000, up about 2,000 from the prior week. The number of deaths totaled 6,550,203, as of Oct. 5, according to Johns Hopkins. Global COVID-19 cases reached 619,211,562.

Roughly 79.5% of the U.S. population, or 264,112,767, have received at least one dose of a COVID-19 vaccine, as of Oct. 5, the CDC reported. Fully vaccinated people total 225,284,115, or 67.9%, of the U.S. population, according to the CDC. The United States also has given at least one COVID-19 booster vaccine to almost 110 million people.

The three infrastructure investments to buy can be repurchased at reduced prices after a rough 2022 market wide. Despite high inflation, Russia’s continuing war in Ukraine and recession risk after 0.75% rate hikes by the Fed in June, July and Sept. 21, the three infrastructure investments to buy offer some insulation compared to cyclical stocks with government budgets less economically sensitive than the private sector. 

Paul Dykewicz,, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street JournalInvestor’s Business DailyUSA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of                         and, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many othersCall 202-677-4457 for multiple-book pricing.

The post Three Infrastructure Investments to Buy as War and Inflation Rage appeared first on Stock Investor.

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Nearly Half Of Americans Making Six-Figures Living Paycheck To Paycheck

Nearly Half Of Americans Making Six-Figures Living Paycheck To Paycheck

Roughly 60% of Americans say they’re living paycheck to paycheck -…



Nearly Half Of Americans Making Six-Figures Living Paycheck To Paycheck

Roughly 60% of Americans say they're living paycheck to paycheck - a figure which hasn't budged much overall from last year's 55% despite inflation hitting 40-year highs, according to a recent LendingClub report.

Even people earning six figures are feeling the strain, with 45% reporting living paycheck to paycheck vs. 38% last year, CNBC reports.

"More consumers living paycheck to paycheck indicates that many are continuing to lose their financial stability," said LendingClub financial health officer, Anuj Nayar.

The consumer price index, which measures the average change in prices for consumer goods and services, rose a higher-than-expected 8.3% in August, driven by increases in food, shelter and medical care costs.

Although real average hourly earnings also rose a seasonally adjusted 0.2% for the month, they remained down 2.8% from a year ago, which means those paychecks don’t stretch as far as they used to. -CNBC

Meanwhile, Bank of America found that 71% of workers say their income isn't keeping pace with inflation - resulting in a five-year low in terms of financial security.

"It is no secret that prices have been increasing for everyday Americans — not only in the goods and services they purchase but also in the interest rates they’re paying to fund their lives," said Nayar, who noted that people are relying more on credit cards and carry a higher monthly balance, making them financially vulnerable. "This can have detrimental consequences for someone who pays the minimum amount on their credit cards every month."

According to an Aug. 30 report from the Federal Reserve Bank of New York, credit card balances increased by $46 billion from last year, becoming the second-biggest source of overall debt last quarter.

And as Bloomberg noted last month, more US consumers are saddled with credit card debt for longer periods of time. According to a recent survey by, 60% of credit card debtors have been holding this type of debt for at least a year, up 50% from a year ago, while those holding debt for over two years is up 40%, from 32%, according to the online credit card marketplace.

And while total credit-card balances remain slightly lower than pre-pandemic levels, inflation and rising interest rates are taking a toll on the already-stretched finances of US households.

About a quarter of respondents said day-to-day expenses are the primary reason why they carry a balance. Almost half cite an emergency or unexpected expense, including medical bills and home or car repair.

The Federal Reserve is likely to raise interest rates for the fifth time this year next week. Credit-card rates are typically directly tied to the Fed Funds rate, and their increase along with a softening economy may lead to higher delinquencies. 

Total consumer debt rose $23.8 billion in July to a record $4.64 trillion, according to data from the Federal Reserve. -Bloomberg

The Fed's figures include credit card and auto debt, as well as student loans, but does not factor in mortgage debt.

Tyler Durden Tue, 10/04/2022 - 20:25

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