Preview of the week starting 4th July 2022

Public Holidays

USA - 4th July 2022 (Happy Independence Day)

Economic Calendar

Initial jobless claims & unemployment rate will be an important data for the Fed Reserve as they incorporate this into their interest rate hike and balance sheet draw down/sales over time.  However, this does not always mean that the people are "living well" as this does not take into consideration if their disposable income is adequate for the current inflationary environment.

Crude oil inventories is a good insight into the consumption of the economy and also the future production in the coming weeks.  Oil is the raw material that needs to be processed and go into our daily living in form of gas, gasoline, diesel, grease, lubricants, plastics and more.

FOMC meeting minutes will present a prelude of the coming rate hike.  More of the Fed are still advocating for a good 75 basis points hike for the coming interest rate adjustment.  The unemployment and inflation data will be key for them to decide. This can cause some market volatility.

Earnings Calendar

This is one of the quietest weeks coming to earnings.  Personally, I love Levi's and WD-40 as a customer.  For some businesses, it is better if we are just customers and not investors.  We should try to isolate our personal liking from our investing decisions as this can get expensive.

News & my muse from the previous week

Crypto broker Voyager has suspended all deposits and withdrawals. 

Will this follow 3 Arrows into insolvency? 

Is crypto winter here?

Real gross domestic product (GDP) decreased at an annual rate of 1.6% in Q1 of 2022, following an increase of 6.9% in Q4 of 2021.

Q2/2022 GDP will be released on 28July22. We shouldn't be surprised with GDP decline that confirms US in technical recession.

BofA Securities downgraded $ZIM to underperform & lowered Zim’s price objective from $79 to $40. The downgrade was based on “concerns over weaker U.S. demand.” Large American retailers are seeing drop in spending on goods & excess inventories.

Exxon signals big gains in second quarter oil and gas production in securities filing, Reuters reports. Wall Street also bounced back on Friday, closing sharply higher ahead of the holiday weekend. #NYSE #economy #cgtnamerica

The Russian sanction may have broken the global economy into different "trading" blocs.

worst 1H performance in almost 50 years. The S&P 500 posted one new 52-week high and 42 new lows; the Nasdaq Composite recorded 17 new highs and 367 new lows.

source: Reuters

 

Is China the world's capital of automakers?  They definitely have a strong case coming to EV.  A look into the world market and the new China EV plants.

Another study, conducted by the United Nations Global Crisis Response Group on Food, Energy & Finance, called for immediate action by international financial institutions to ensure a steady flow of food & energy through open markets (United Nations, 2022)

Market outlook

From the S&P500 1D chart above, the indicators point to an uptrend (from both MACD and Stochastics).  However, the reversal is yet confirmed by the EMA lines above.  

During the course of the week, we hear of Crypto giants falling (3 Arrows / 3AC) and Bitcoin hitting the bottom.  While there are several anticipating that Bitcoin has hit bottom, there could still be more downside following the suspension of deposits and withdrawals from other Crypto companies.  As the war at Ukraine drags on, there are over 20 million tons of grain (urgently needed) that were trapped by the naval blockage.  These have led to inflationary increases of food prices.  With oil price likely to remain elevated, we can expect more inflationary ripples into fuel, utilities and goods & services.  As per my previous article, oil price is likely to remain heightened largely due to a refinery capacity bottleneck.  With supply chain still posing issues, it is likely to be remain challenging for the various sectors.

As we enter into Q3, hopefully the earnings and outlook can help to lift the market as recession seeps in.