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Breakfast Bites: Quiet start to a Busy Week

Rise and shine everyone.

It’s a quiet Monday morning ahead of what is expected to be one of the biggest weeks of the quarter. We have most of the Mega Cap Tech names reporting this week and add to that 42% of the S&P 500 are reporting Q1 earnings.

We also have the US Q1 GDP Growth First Estimate on Thursday, BoJ Meeting and PCE Inflation Data out on Friday and we’re certain to see some fireworks given that Inflation is yet again, the number one concern in the US.

US equity futures seem upbeat this morning, recovering from a strong week of selling last week, even though yields are also higher across the curve. Whether this recovery holds is still anyone’s guess, given we may see some profit-taking ahead of the major reports and the inflation numbers.

Big tech is green this morning with the exception of Tesla and Netflix. It would seem that we continue to see pressure in these stocks after last week’s bad news - Tesla will cut their workforce and Netflix provided softer guidance.

With geopolitical tensions settling to a certain extent, we’re seeing a pullback in oil, gold, and silver. Copper and Bitcoin are still up this morning. Copper extended its two-year highs to $4.55/lb.

And finally, with Fed speakers going into their blackout period until the Fed meeting at the end of the month, we can enjoy some peace and quiet.

Chart of the Day

The market was pricing in a Fed rate cut ahead of the UK. The tables have now seemingly turned and with that, the GBP is weakening against the USD. Something to keep an eye on.

  • UBS downgrades Apple, Amazon, Alphabet, Meta, Microsoft and Nvidia (Big 6 Tech+ stocks) from Overweight to Neutral

  • Tesla cut prices by ~2k in the US, China and Germany, and Li Auto chimed in with its own China price cuts of ~$3k.

  • US House Passes $95 Billion in Aid to Ukraine, Israel and Taiwan. Senators plan to vote on long-delayed package on Tuesday.

  • China released its March YTD Foreign Direct Investment after skipping the reading for February; YoY -26.1% shows that foreign capital has continued its exodus out of the economy, despite Beijing’s multiple measures and meetings over recent months designed to re-attract foreign funds to its shores.

  • China left the loan prime rate (1Y and 5Y) unchanged over the weekend.

  • Late Friday BOJ Gov Ueda said that long-term JP inflation expectations are 1% to 1.5% long-term, a lot less than the ~2.5% to ~4% monthly CPI readings that Japan has recorded over the past year.


(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)

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