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Take Five: It's a Fed hot summer

Friday, July 22, 2022
Take Five: It's a Fed hot summer © Reuters. FILE PHOTO: An eagle tops the U.S. Federal Reserve building's facade in Washington, July 31, 2013. REUTERS/Jonathan Ernst

A likely second straight 75 basis point rate hike from the U.S. Federal Reserve will keep markets on their toes in the week ahead, just as investors digest a wave of earnings from corporate America and Europe.

The prospect of early elections in Italy after the collapse of the government means there's plenty of political drama too, and Australia's latest inflation numbers may add to pressure on the country's central bank to get ahead of the curve.

Here's your week ahead in markets from Ira Iosebashvili in New York, Kevin Buckland in Tokyo, and Sujata Rao, Dhara Ranasinghe and Vincent Flasseur in London.

1/ FED HOT

Fed officials have poured cold water over expectations for a 100 basis point rate hike in July but Wednesday's meeting will still have drama aplenty.

A 75 bps interest rate hike is priced in, and coming on top of 150 bps worth of tightening so far in this cycle, that is sure to bite consumers and businesses.

Investors will be looking at whether the Fed thinks inflation is peaking and how it views the U.S. economy, as they try to gauge the scope of a September rate move.

Hanging in the balance are nascent rallies in U.S. stocks and bonds. The S&P 500 is up almost 10% from its mid-June low, 10-year Treasury yields are down 60 bps. 

2/ EARNINGS: PART I

Earnings from Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Coca Cola, Apple (NASDAQ:AAPL) and others will show how well corporate America is coping with soaring inflation and a strong dollar.

This year's 17% decline in the S&P 500 has lowered the index's forward price-to-earnings ratio to around 17.3 from 21.7 at the start of 2022, closer to the market's historic average of 15.5, according to Refinitiv Datastream.

While there have been several notable beats this season, it's early days and many worry that earnings estimates may not hold up in the face of the highest inflation in four decades and tightening financial conditions.

Also clouding the picture is the burgeoning dollar, which makes U.S. exports less competitive and hurts firms earning much of their money abroad. Alphabet, Microsoft and Coca Cola report on July 26, Apple and Amazon (NASDAQ:AMZN) on July 28.

3/ EARNINGS: PART II

One-sixth of Europe's STOXX 600 equity index reports second-quarter results July 25-29, and Refinitiv I/B/E/S forecasts earnings to have grown 22% year-on-year.

That headline figure masks disparities; earnings growth at energy firms basking in the glow of $100-a-barrel oil is seen at 185%, while real estate businesses will show a 70% drop, Refinitiv predicts.

Statements from retailers, heavy industry and hospitality firms may show how much pain is being inflicted by energy shortages and high inflation. The likes of Airbus, Volkswagen (ETR:VOWG_p) and Mercedes will cast light on the state of European exporters.

Bank earnings, expected to have slowed around 16%, include numbers from UBS, Credit Suisse, Deutsche, Barclays (LON:BARC) and BNP Paribas (OTC:BNPQY).

The Q2 season will show if European shares are correctly valued around 11.5 times forward earnings, versus their 14% long-term average, or need to cheapen further.

4/ MAMMA MIA

A political crisis couldn't come at a worse moment for Italy. The ECB has just jacked up rates for the first time since 2011, inflation is soaring and the country has been hit hard by its exposure to Russian gas.

The collapse of Mario Draghi's government ends months of stability, unnerving markets that had cheered when the ex-ECB chief became prime minister in 2021. They now worry about the prospect of new elections and Rome's ability to pass policies.

It also leaves the ECB, with its new tool to contain stress in bond markets, in an awkward position of determining which part of government bond spread widening is "unwarranted" - or giving up buying Italy's bonds altogether.

5/ CREDIBILITY ISSUE

Reserve Bank of Australia (RBA) boss Philip Lowe is pledging a steady policy-tightening campaign to at least double interest rates from current levels to "chart a credible path" back to the RBA's 2-3% inflation target.

Quarterly inflation numbers due Wednesday could show a further acceleration in price growth, which at 5.1% is already at its highest in two decades.

The rate-rise pledges are ironic coming from Lowe, who just months ago pushed back against markets, saying he didn't see rates rising throughout 2022, but has since lifted them three times since May.

Criticism of the RBA's inflation policy has led to an independent inquiry of its operations.

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13-08-2022 16:31:33 (UTC+7)

EUR/USD

1.0261

-0.0056 (-0.54%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (6)

Sell (2)

EUR/USD

1.0261

-0.0056 (-0.54%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (6)

Sell (2)

GBP/USD

1.2135

-0.0076 (-0.63%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (3)

Sell (5)

USD/JPY

133.46

+0.46 (+0.34%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

AUD/USD

0.7121

+0.0016 (+0.23%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (3)

Sell (6)

USD/CAD

1.2774

+0.0013 (+0.10%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (8)

Sell (0)

EUR/JPY

136.93

-0.29 (-0.21%)

Summary

Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

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Sell (3)

EUR/CHF

0.9659

-0.0046 (-0.48%)

Summary

↑ Sell

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Indicators:

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Sell (3)

Gold Futures

1,818.40

+11.20 (+0.62%)

Summary

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Indicators:

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Silver Futures

20.835

+0.486 (+2.39%)

Summary

↑ Buy

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Copper Futures

3.6783

-0.0282 (-0.76%)

Summary

↑ Buy

Moving Avg:

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Buy (7)

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Crude Oil WTI Futures

91.88

-2.46 (-2.61%)

Summary

↑ Buy

Moving Avg:

Buy (9)

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Indicators:

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Brent Oil Futures

98.01

-1.59 (-1.60%)

Summary

Buy

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Natural Gas Futures

8.780

-0.094 (-1.06%)

Summary

↑ Buy

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US Coffee C Futures

227.53

+3.58 (+1.60%)

Summary

↑ Buy

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Sell (0)

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Sell (1)

Euro Stoxx 50

3,776.81

+19.76 (+0.53%)

Summary

Sell

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Indicators:

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Sell (6)

S&P 500

4,280.15

+72.88 (+1.73%)

Summary

↑ Buy

Moving Avg:

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DAX

13,795.85

+101.34 (+0.74%)

Summary

Neutral

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FTSE 100

7,500.89

+34.98 (+0.47%)

Summary

Neutral

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Sell (6)

Indicators:

Buy (3)

Sell (2)

Hang Seng

20,175.62

+93.19 (+0.46%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (1)

US Small Cap 2000

2,013.09

+37.84 (+1.92%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (0)

IBEX 35

8,400.40

+20.40 (+0.24%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (6)

BASF SE NA O.N.

44.155

+0.730 (+1.68%)

Summary

↑ Buy

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Sell (4)

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Buy (6)

Sell (2)

Bayer AG NA

54.15

+2.47 (+4.78%)

Summary

↑ Buy

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Sell (3)

Indicators:

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Sell (0)

Allianz SE VNA O.N.

181.08

+2.08 (+1.16%)

Summary

↑ Sell

Moving Avg:

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Sell (7)

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Adidas AG

173.20

+1.18 (+0.69%)

Summary

↑ Buy

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Sell (0)

Indicators:

Buy (8)

Sell (0)

Deutsche Lufthansa AG

6.588

+0.062 (+0.95%)

Summary

↑ Sell

Moving Avg:

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Sell (12)

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Buy (2)

Sell (6)

Siemens AG Class N

111.84

+1.92 (+1.75%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

Deutsche Bank AG

9.061

+0.197 (+2.22%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (5)

Sell (0)

 EUR/USD1.0261↑ Buy
 GBP/USD1.2135↑ Sell
 USD/JPY133.46↑ Sell
 AUD/USD0.7121↑ Sell
 USD/CAD1.2774↑ Buy
 EUR/JPY136.93Sell
 EUR/CHF0.9659↑ Sell
 Gold1,818.40↑ Buy
 Silver20.835↑ Buy
 Copper3.6783↑ Buy
 Crude Oil WTI91.88↑ Buy
 Brent Oil98.01Buy
 Natural Gas8.780↑ Buy
 US Coffee C227.53↑ Buy
 Euro Stoxx 503,776.81Sell
 S&P 5004,280.15↑ Buy
 DAX13,795.85Neutral
 FTSE 1007,500.89Neutral
 Hang Seng20,175.62↑ Buy
 Small Cap 20002,013.09↑ Buy
 IBEX 358,400.40↑ Sell
 BASF44.155↑ Buy
 Bayer54.15↑ Buy
 Allianz181.08↑ Sell
 Adidas173.20↑ Buy
 Lufthansa6.588↑ Sell
 Siemens AG111.84↑ Sell
 Deutsche Bank AG9.061↑ Buy
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank6,620/ 6,720
(0/ 0) # 1,655
SJC HCM6,660/ 6,760
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SJC Hanoi6,660/ 6,762
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SJC Danang6,660/ 6,762
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SJC Nhatrang6,660/ 6,762
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SJC Cantho6,660/ 6,762
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Cập nhật 13-08-2022 16:31:35
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ↀ Giá vàng thế giới
$1,801.89+12.740.71%
Live 24 hour Gold Chart
ʘ Giá bán lẻ xăng dầu
Sản phẩmVùng 1Vùng 2
RON 95-V25.34025.840
RON 95-III24.66025.150
E5 RON 92-II23.72024.190
DO 0.05S22.90023.350
DO 0,001S-V24.88025.370
Dầu hỏa 2-K23.32023.780
ↂ Giá dầu thô thế giới
WTI$91.88+0.550.60%
Brent$97.89+0.110.11%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD23.220,0023.530,00
EUR23.498,0024.813,92
GBP27.761,8728.945,83
JPY170,70180,72
KRW15,5018,89
Cập nhật lúc 16:24:27 13/08/2022
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