Friday, May 20, 2022 87 Financial Events
After obtaining additional funds and credit, wealthy people have less motivation to consume than less wealthy people. Therefore, when the gap between rich and poor is large and the economy is weak, it is more productive to give spending power to the less well-off.
♚ The three major U.S. stock indexes collectively ended lower, with the Dow hitting another low in more than a year. Crude oil has made a V-shaped reversal. The dollar's plunge has provided support to a range of metals. The anti-inflation properties of metals have also boosted prices. London base metals have risen across the board for the first time since the end of March.
The S&P 500 index closed down 22.89 points, or 0.58%, to 3900.79 points.
The Dow Jones Industrial Average closed down 236.94 points, or 0.75%, at 31,253.13 points.
The Nasdaq Composite Index closed down 29.66 points, or 0.26%, to 11388.50 points.
WTI June crude oil futures closed up $2.62, or 2.39%, at $112.21 per barrel.
Brent 7 crude oil futures closed up $2.93, or 2.68%, at $112.04 per barrel.
NYMEX June gasoline futures closed at $3.8317 per gallon.
NYMEX June heating oil futures closed at $3.7920 per gallon.
NYMEX June natural gas futures closed down 0.72% at $8.3080 per million British thermal units.
COMEX June gold futures closed up about 1.4%, the largest one-day gain since April 12, at $1,841.20 per ounce.
LME copper futures closed up $180 at $9,416/ton.
LME aluminum futures closed up $49 at $2,906 per ton.
LME zinc futures closed up $94 at $3,714/ton.
LME lead futures closed up $9, at $2,063/ton.
LME nickel futures closed up $2,072 at $28,231 per ton.
LME tin futures closed up $1,211 at $34,230 per ton.
The main funds in Shanghai and Shenzhen stock markets had a net outflow of 3.899 billion yuan yesterday. The net buying volume of northbound funds yesterday was 5.125 billion yuan. Among them, the net purchase of and Shanghai Stock Connect was 2.739 billion yuan, and the net purchase of Shenzhen Stock Connect was 2.386 billion yuan.
♚ Guggenheim: The current market looks a lot like the burst of the Internet bubble (the crash of technology stocks in 1999-2000), and the " Fed put option" is no longer.
Asset management giant Guggenheim Chief Investment Officer Scott Minerd said in an interview with Market Watch: It is expected that investors may experience "a terrible summer and autumn" and enter the second half of the year, The Nasdaq Composite Index will collapse , has plunged 75% from its peak on November 19 last year (currently down about 28%), while the S&P 500 has plunged 45% from its peak on January 3, 2022 (currently down 18%).
The current market looks a lot like the bursting of the dot-com bubble (the 1999-2000 tech stock crash).
Jeremy Grantham, a legendary investor who has successfully predicted two market crashes and co-founder and chief strategist of GMO, holds a similar view. He believes:
The collapse of U.S. stocks is superficially similar to the bursting of the Internet bubble in 2000. It is expected that the price will rise. The S&P 500 index will continue to fall, or fall 40% from its peak, falling to levels not seen since the bear market in March 2020.
At the same time, Grantham pointed out that there are some differences between this decline and 2000. The bubble in 2000 was just in the stock market. The bond market was doing very well, yields were amazing, housing was cheap, and commodities were doing well. Compared to today, 2000 was simply "paradise." Now the conflict between Russia and Ukraine has broken out, energy and food prices are high, the real estate market is in a mess, and the bond market has seen its worst performance in years.
He believes that this recession may evolve into something like the 1970s, with economic growth slowing and inflation continuing to be high.
"Fed Put" no more.
What has led to the pessimism of Wall Street bosses is mainly the Federal Reserve's tightening policy. Minerd pointed out that the Federal Reserve has made it clear that its goal is to continue to raise interest rates , although this may cause turmoil in U.S. stocks and other markets.
Minerd said: We are all well aware of the fact that there is no "Fed put."(The so-called Fed put options refer to the fact that the Fed will quickly step in to rescue the stock market when the stock market plummets)
Fed Chairman Powell also seems to be trying to persuade investors not to have hope that the "Fed will step in to rescue the market." On Tuesday, in an interview with " Wall Street In an interview with Daily , he stated that he would continue to raise interest rates and would not stop until inflation is lowered, and warned that this process may bring some pain.
Mined said he believes the Fed will continue to raise interest rates "until they see a clear break in the inflation trend," adding that the Fed may raise rates above neutral.
Earlier this month, the Federal Reserve raised the federal funds rate to a target range between 0.75% and 1%, and said it expected to raise interest rates by another 50 basis points at the next two meetings. According to the U.S. Department of Labor, the U.S. 4 The monthly inflation rate is 8.3%, well above the Federal Reserve's 2% target interest rate.
Suppressing inflation may require raising interest rates to 8%
A recent conference hosted by the Hoover Institution was attended by many participants, including former White House Chief Economist Jason Furman, who predicted that the Federal Reserve would need to raise interest rates. Adjust to 3.5%-8% to reach neutral level.
Previously, former AllianceBernstein chief economist Joseph Carson expressed a similar view - "Policymakers need to raise interest rates above the inflation peak every time to suppress the inflation cycle." This means the Fed will keep raising interest rates until something changes in the economy or markets.
The healthiest environment for consumer spending in U.S. history is coming to an end.
For ordinary consumers, as many of the stimulus dividends during the epidemic have expired and the U.S. inflation rate is at a four-year high, subprime borrowers have become the most affected consumers.
Consumer credit reporting agency Equifax Inc released data showing that the share of subprime borrowers among credit card and personal loan borrowers who are at least 60 days past due is rising faster than normal. As of March this year, the share of such defaulters had climbed for eight consecutive months and was close to pre-COVID-19 levels. In February, the share of subprime borrowers who were delinquent on car loans and rental car loans hit a new high since Equifax began keeping records in 2007.
media commented that Equifax's data shows a sign that the healthiest environment for consumer spending in the history of the United States is coming to an end.
♚ Sri Lanka’s sovereign debt default has set off alarm bells for other emerging markets.
At a press conference on Thursday, Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka, said that Sri Lankan policymakers had previously warned creditors that they would not be able to make payments within the grace period, so relevant investors had been informed of the current results in advance. Bond interest payments were originally due on April 18. The interest amount on the two bonds maturing in 2023 and 2028 totaled US$78 million. The 30-day grace period ended on Wednesday.
Most Sri Lankan bonds have so-called cross-default clauses . If the payment of a single bond defaults, it will drag all outstanding US dollar debt into default. For debt due in 2023 and 2028, if more than $25 million is not paid, the clause will be triggered.
This is Sri Lanka's first sovereign debt default since independence from Britain in 1948. The country’s bond performance has been among the worst in the world this year, with holders losing nearly 60%.
Affected by this news, Sri Lanka's Colombo stock index fell sharply, reversing its previous 1% rise and once falling by more than 3%.
Sri Lanka's central bank also warned on Thursday that the country's overall inflation rate could reach 40% in the coming months. Due to high inflation, sharp currency depreciation, and an economic crisis, Sri Lanka is currently severely short of the U.S. dollar hard currency needed to import food and fuel, and the entire country continues to be in turmoil. The country's new prime minister previously said that there is currently no foreign currency to pay for even one day's fuel costs.
After officially defaulting, Sri Lanka's negotiations with its creditors can begin, which will be the key to winning IMF aid. The country has previously said it will need $3 billion to $4 billion this year to emerge from the crisis.
But reaching an agreement quickly is no easy task.Instability continues, with the president of the central bank threatening to resign if political stability is not restored soon.
Sri Lanka's problems are a wake-up call for other emerging markets. Additional pressures from rising food and energy prices are already starting to emerge in other countries including Egypt, Tunisia and Peru. That threatens to turn into a broader debt collapse and pose yet another threat to the world economy's fragile recovery from the pandemic.
♚ The total number of existing home sales in the United States fell by 2.4% month-on-month in April, falling for the third consecutive month. However, sales of high-end homes on the market are still relatively strong.
On Thursday, according to data from the National Association of Realtors (NAR), total existing home sales in the United States fell 2.4% month-on-month in April, falling for the third consecutive month to an annualized rate of 5.61 million units, the lowest since June 2020. . Existing home sales fell 4.1% year-over-year in April. Among them, condo and co-op sales fell 1.6%, and single-family home sales dropped 2.5% from March.
Looking at regions, sales in the South and West fell compared with last month, but sales in the Northeast and Midwest increased.
On the supply side, the number of homes for sale at the end of April climbed slightly from March, but was down 10.4% from a year ago. At the current pace, it will take 2.2 months to sell all the homes on the market, up from 1.9 months last month. Realtors view anything below five months' supply as a sign of a tight market.
Properties spent an average of 17 days on the market last month, and all-cash sales remained high at 25% of all sales. Investors accounted for 17% of sales, while first-time buyers accounted for just 28%, down from 30% in March. Historically, first-time homebuyers have typically made up about 40% of the market, representing affordability challenges that have priced many Americans out of the market. Rising home prices and limited inventory, coupled with sharp rises in borrowing costs, have put pressure on home purchases, with home purchases falling for the third consecutive month,
data shows. The 30-year mortgage rate rose to 5.5% last week, up from 3.5% at the beginning of the year, according to the Mortgage Bankers Association.
Tight supply pushed the median home price to a record $391,200 despite rising interest rates. This price is 14.8% higher than in April 2021, driven mainly by increases in the southern region. For the eighth month in a row, the south has had the fastest rate of house price growth compared with the other three regions. Additionally, the South was the only region to see double-digit year-over-year home price growth.
Another reason for the high median home price is that sales of homes at the higher end of the market remain strong, while sales of lower-priced homes are down, reflecting less inventory of lower-priced homes. Among them, sales of homes priced between $100,000 and $250,000 fell 29% year-on-year, while sales of homes priced between $500,000 and $750,000 increased 19%. Sales of homes priced over $1 million are up 16% compared with a year ago.
NAR chief economist Lawrence Yun said: Higher home prices and sharply rising mortgage rates have reduced buyer activity. It looks like more declines are on the way in the coming months, and it's very possible that we'll return to pre-pandemic home sales activity after a significant surge over the past two years.
♚ Apple presented an AR/VR headset device to the board of directors, indicating that it has entered an advanced stage of research and development
Apple executives presented an upcoming mixed reality headset to the company's board of directors last week, indicating that development of the device has entered Advanced stage. The company's board of directors includes 8 independent directors and Apple CEO Cook , and meets at least four times a year. In recent weeks, Apple has also accelerated the development of the headset running software rOS. This progress, coupled with the demo on the board, suggests the product could debut in the coming months. The headset, which combines elements of virtual reality and augmented reality, is Apple's next big bet and will be the company's first major new product category since the launch of Apple Watch in 2015, putting the tech giant into a An industry still in its nascent stage.The company is seeking new ways to expand its equipment business, which accounts for 80% of annual revenue. Apple aims to launch the headphones as early as the end of this year or sometime next year, with plans to put them on the market in 2023.
♚ The State Council: Incorporate major meteorological core technology research into the national science and technology plan to provide key support
The State Council issued an outline for high-quality meteorological development (2022-2035): Accelerate key core technology research. Implement the national mid- and long-term development plan for meteorological science and technology, and incorporate major meteorological core technological research into national science and technology plans (special projects, funds, etc.) to provide key support. Strengthen the deep integration application of artificial intelligence , big data, quantum computing and meteorology. Promote in-depth international cooperation in meteorological science and technology, and explore and take the lead in organizing international major science plans and major scientific projects in the fields of earth systems, climate change and other fields.
♚ The State-owned Assets Supervision and Administration Commission held a meeting to promote the construction of modern industrial chain lengths for central enterprises, focusing on improving the ability to solidify, strengthen, and plasticize chains.
The State-owned Assets Supervision and Administration Commission held a meeting to promote the construction of modern industrial chain lengths for central enterprises on the 19th. The meeting required that scientific planning should be strengthened, combined with the company's industrial foundation and unique advantages, to identify the key points, sort out the list of key links, products, and technologies in the industrial chain, focus on key points, and strive for practical results. Strengthen forging strengths to compensate for weaknesses, reshape industrial advantages, and continuously enhance the ability to support key products and basic raw materials. The State-owned Assets Supervision and Administration Commission will further study the policy list, improve classified supervision and differentiated support measures, promote the organic connection between chain length construction and assessment incentives, state-owned capital operating budget , talent guarantee and other existing policies and systems, and further support industry associations, research institutions, industries Experts and others play an active role in creating a good atmosphere for further promoting chain length construction.
♚ China Banking and Insurance Regulatory Commission: Strengthen the construction of standards in the fields of catastrophe insurance, pension and health insurance, and standardize to support the insurance industry in serving society and people's livelihood
Recently China Banking and Insurance Regulatory Commission released the "14th Five-Year Plan for Standardization of China's Insurance Industry". In terms of standardization to support the insurance industry in serving society and people's livelihood, the "Plan" requires: Strengthen the construction of standards in the field of pension and health insurance, support the construction of the third pillar of pension insurance, formulate standards for pension insurance products and services, and promote insurance institutions to develop products that meet consumer needs. Diversified pension insurance products. Strengthen the construction of catastrophe insurance standards, formulate catastrophe classification and catastrophe insurance product specifications, and promote the construction of standards for catastrophe insurance mechanisms such as mutual insurance bodies, political insurance cooperation, and catastrophe bonds.
promotes the construction of standards in the field of liability insurance and guarantee insurance , actively carries out the construction of standards in the fields of liability insurance and guarantee insurance, and supports insurance institutions in pollution control, production safety, campus safety, medical disputes, construction quality, and public health emergencies, etc. The field plays a role in assisting social governance.
♚ China Securities Association: Further improve the OTC derivatives self-regulatory rules system and self-regulatory supervision framework
learned from the Securities Association of China that recently, the OTC Market and Derivatives Business Professional Committee of the Securities Association of China held a plenary meeting via video to collectively learn and implement " Futures and Derivatives Law of the People's Republic of China". In the next step, the Securities Association of China will take the implementation of the Futures and Derivatives Law as an opportunity to further improve the OTC derivatives self-regulatory rule system and self-regulatory regulatory framework, strengthen the construction of OTC financial infrastructure, and continuously improve the CSI quotation and transaction reports. library functions and business standardization level, and truly enable the derivatives business to be “clearly seen, clearly explained, and manageable”.
♚ The Peking University team has overcome a world-wide problem, and its results involve photonic integrated chips and microsystems
Peking University Professor Wang Xingjun’s research group and the University of California, Santa Barbara, Professor John E. Bowers’ research group were published online in Nature magazine The article "Microcomb-driven silicon photonic systems" reports for the first time in the world a new silicon-based optoelectronic on-chip integrated system driven by an integrated microcavity optical comb, indicating that the research team has finally overcome this worldwide problem after three years of collaborative research. .Utilize this highly integrated system to realize T-bit rate microcommunication and sub-GHz microwave photonic signal processing, propose a new architecture of high-density multi-dimensional multiplexed microcommunication and microprocessing chip-level integrated systems, and create the next generation of multi-dimensional silicon photonics. Developments in the subdiscipline of integrated microsystems. Relevant research results are expected to be directly applied to data centers, 5/6G communications, autonomous driving, optical computing and other fields, providing a new research paradigm and development direction for the next generation of on-chip optoelectronic information systems.
♚ The British Chancellor of the Exchequer promised to introduce policies to alleviate inflationary pressure
At the CBI meeting of the British Business Council, the British Chancellor of the Exchequer, Rishi Sunak, promised to provide targeted tax cuts to enterprises through the budget later this year. He hopes that This will alleviate the cost pressure caused by high inflation. The latest data released by
yesterday showed that the UK CPI inflation rate reached 9% in April, the highest level in more than 40 years. The market also expects that CPI will further rise to more than 10% in the autumn. People from all walks of life are putting pressure on the Chancellor of Finance, hoping that he will launch an emergency budget to help poorer families and small and medium-sized businesses that rely heavily on energy.
Sunak said when attending the CBI Enterprises and Business Institutions High-Level Summit that he would cut taxes in the autumn budget, lower corporate taxes and fees, encourage companies to invest in technology, training, etc., increase productivity through more advanced technology, and cope with inflation.
Sunak said that it will launch a two-year temporary "super exemption" to provide 130% tax deduction and exemption for companies to purchase technologically advanced equipment, and encourage companies to invest in .
Starting this month, the British finance department began to solicit opinions and consultations from businesses and the public on how to implement the "super tax reduction policy" in 2023. The plan includes increasing annual investment allowances, increasing training subsidies, and increasing tax exemptions for adding new equipment. There are even possible policies such as 100% tax deduction.
♚ Multiple cases of monkeypox have been discovered in the UK
According to the British Health and Safety Authority (UKHSA), two more cases of monkeypox (Monkeypox) have been discovered in the UK recently, one in London and the other in southeast England.
Since the first case of monkeypox was confirmed on May 6, a total of 9 cases have been reported in the UK.
Recent cases have mainly occurred in gay, bisexual or men who have sex with men. The two latest reported cases have no travel history to countries with monkeypox epidemics, so it is possible that they were infected through community transmission. The first symptoms of monkeypox include fever, headache, muscle aches, back pain, swollen lymph nodes, chills and fatigue. A rash occurs, usually starting on the face and spreading to other parts of the body, including the genitals.
Monkeypox virus is not easily transmitted between humans, but it can be transmitted through contact with body fluids, monkeypox sores, clothing contaminated with body fluids or acne sores, or through respiratory droplets due to prolonged face-to-face contact.
Currently, cases of monkeypox have been found in Portugal, the United Kingdom, Spain, Sweden, , and the United States.
