We spent the weekend talking about whether Credit Suisse will finally go bust or not. The share price is down below 4 francs a share, and the credit default swaps are going through the roof. The 5-year CDS for Credit Suisse spiked to 250 from around 60 at the start of the year. It means that the market is aggressively pricing a default for one of the biggest Swiss banks.

Is it possible? Yes, it is possible, but it is highly unlikely.

Zooming out, the third quarter ends with losses, even though we thought that the summer rally could’ve given something. But no.

The S&P500 finished the 3rd quarter having slipped to the lowest levels this year. The same is true for Nasdaq and the Dow Jones. $24 trillion have been wiped out of the stocks so far this year.

And the last quarter begins with aggressive rate hike expectations from the Federal Reserve (Fed), but also from the European Central Bank (ECB) and the Bank of England (BoE) to fight inflation and the dollar strength.
Nike has been the latest company warning investors of falling profits due to mountains of stockpiles that they inherited from the pandemic times – and which brought the company to make nice price discounts -, and the strong dollar.

This week, we will watch how Tesla will react to the latest delivery report, the OPEC decision and the US jobs figures… and hope that this week’s jobs data doesn’t reveal strong job additions, and solid salary growth in the US.

Watch the full episode to find out more!

It was a terribly ugly day across the equity and bond markets yesterday.
Despite the financial calamity, Porsche had a successful IPO and secured the valuation it was looking for, but the S&P500 plunged another 2% yesterday and wiped out the summer gains entirely. The same is true for Nasdaq. Nothing is left from the summer rally in the US stocks.

Apple dived more than 6% and closed the session almost 5% lower yesterday, after Bank of America downgraded the stock on worries of weaker consumer demand.

Facebook’s Meta joined the others in announcing job cuts.

But **unfortunately** for the Federal Reserve (Fed), the US jobless claims came below 200’000 last week. There are not enough people losing their jobs to stop the financial bleeding in the world.

One interesting thing about yesterday’s price action was that... the US dollar sharply eased despite the hawkish messages thrown to our faces by the pitiless Fed members.

The British pound recovered above the 1.11 mark against the US dollar yesterday. Could the pound rebound sustainably, or is this just a fake alert?

Watch the full episode to find out more!

The Bank of England (BoE) jumped in the UK’s shattered sovereign market to buy long-term UK bonds yesterday, because apparently, they have been warned that collateral calls on Wednesday afternoon could force investors to further dump their UK sovereign holdings. And the UK could no longer afford another heavy selloff wave on its sovereigns.

The British 10-year yield fell 10% yesterday, and the pound jumped past the 1.08 mark against the US dollar and consolidated below 0.90 against the euro.

The FTSE recovered early losses and closed the session 0.30% higher, gold recovered to $1662 an ounce, American crude rallied past the $80 per barrel, also boosted by the Hurricane Ian’s negative impact on supply. Around 11% of the Gulf of Mexico production was halted due to the storm.
The S&P500 gained almost 2% yesterday to above 3700 level, while Nasdaq jumped more than 2%.

Will the enthusiasm last? Not so sure. Yesterday’s price action was a sugar rush, triggered by the BoE intervention. Enthusiasm will likely fall as the level of blood sugar falls across the financial markets.

Amazon jumped 3% as investors liked the new devices at Wednesday’s annual device event, and Apple slipped on announcement that it will, finally, not produce more iPhones compared to last years.
In Europe, all eyes are on Porsche that starts flying with its own wings today!

Watch the full episode to find out more!

The Russian natural gas is now bubbling somewhere in the Baltic Sea, being wasted in front of the horrified eyes of hundreds of millions of Europeans suffering from a historical energy crisis.

The European natural gas prices jumped 17% yesterday, while crude oil gained 2.30% on news that Russia now wants OPEC+ to cut output as deadlines to implement Russian fuel bans approach.

Plus, if the escalation on the energy front is not enough, governments of the four Moscow-occupied areas of Ukraine have all declared victories in the referendums with, of course, an unprecedented majority of residents saying YES to joining Russia.

The mounting tensions with Ukraine and the spike in nat gas prices fuel the European inflation expectations, but in vain. The EURUSD is pushing lower against the US dollar as recession worries mount.

The pound remains under a decent selling pressure as the Bank of England (BoE) officials are pushing the can down a very steep road, saying that it’s more appropriate to wait 5 WEEKS before taking action.

Even the safe haven assets are out of action right now. The dollar-swissy is about to test parity, as gold pushes lower as the dollar extends rally, and US yields rise.

The Fed officials make sure no one breath. But it is well possible that after having wrongly insisted that inflation was ‘transitory’, the Federal Reserve (Fed) could now making a second Big Policy Mistake of tightening beyond-appropriate.

Watch the full episode to find out more!

We had a bearish start to the week on Monday and the price action across several asset classes remains volatile and chaotic - and that’s especially true for the FX markets shaken by the freefall in sterling.

The US dollar remains king, on the back of a heavy sterling meltdown due to irresponsible UK government / lazy Bank of England (BoE), and euro selloff on the back of Italy turning right / cautious European Central Bank.
The USDJPY spiked at yesterday’s dollar rally, as if the Bank of Japan (BoJ) never intervened last week. The BoJ head says that he supports intervention in the yen. In vain.

Equities selloff, as investors expect a deeper downside move due to pressured earnings. Tech stocks remain on the chopping block. To reverse sentiment, Amazon throws the second Prime Day sale this year, and Apple hurries out of China.

While outlook for equities remains bearish, the rising yields make sovereign markets increasingly appetizing, and an eventual inflows in global sovereign markets could be the first sign of healing from the actual financial crisis.

Watch the full episode to find out more!