Morning Offer: What Rescue Earnings?

Morning Offer: What Rescue Earnings?


The New York Stock Exchange trader while markets continue to respond to coronavirus disease (COVID-19) inside the NYSE in New York, USA, March 18, 2020. REUTERS / Lucas Jackson / File Photo

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A look at the day ahead by Danilo Masoni.

Traders sold the latest rallies and brutally flipped world stocks back to the brink of confirming a bear market pattern. And behind them is the fear that the support provided so far by strong yields against the pressure of rising rates is beginning to decline.

Wall Street wholesalers have shown the world how painful inflation and supply chain problems can be, adding to concerns that the American consumer who drives the world’s top economy may not be as strong as thought. This caused investors to rush to leave.

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The S&P 500 (.SPX) fell 4% in the biggest decline since June 2020, as retail giant Target (TGT.N) fell 25% after warning of a major margin hit due to rising fuel and transportation costs. The day before rival Walmart (WMT.N) lowered its profit forecast.

Acid sentiment has spilled over into Asia and Europe, appearing to prolong Wednesday’s losses, although the safe dollar has eased and riskier currencies such as the Aussie have jumped as Shanghai has set plans to end the COVID blockade.

Meanwhile, the first signs of “surrender” among retailers have emerged, according to Vanda Research, which quoted trading options close to record highs and net assets of Charles Schwab, which is suffering from outflows for the first time since 2020.

Against this background, energy and commodities are rare safe harbors. Brent oil is rising 1% back above $ 110 and the European energy index (.SXEP) reached a fresh three-year high on Wednesday, avoiding stock market turmoil.

snapshot

Key events that should steer the markets more on Thursday:

  • In April, Japanese exports increased double-digit profits for the third month in a row. Read more
  • Speaker Corner: BoE Financial Markets Infrastructure Division Christina Segal-Knowles, ECB Vice-President Luis de Guindos
  • Central Bank Meetings: South Africa, Egypt, Philippines
  • Initial U.S. Unemployment Claims / Philly Fed Index
  • American TIPS auction for 10 years
  • Earnings: Generali, Investec, Royal Mail, Kohl’s

(This story is replenished to correct the graph)

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Report from Danilo Masoni

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