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NEW YORK (Dow Jones) – Wall Street on Tuesday is likely to rebuild losses from the day before. The stock futures market suggests lower spot prices at the start of trading. Traders speak of clear recession fears as seen in falling oil prices, rising bond prices and the strength of the dollar. For the first time since 2002, the euro has caught up with the dollar. The dollar index rose by another 0.5 percent. In addition to falling oil prices, copper is considered a barometer of the recession. The price of an important industrial metal is currently down 2.6%. on the London futures exchange. Last month, the price was down a fifth, and from its last all-time record in March, copper is down 30 percent.
Concerns about a recession have gained further momentum with new blockades in China. Because the new supply chain difficulties now looming, they may further fuel inflation and provide the US Federal Reserve with the arguments for a rapid pace of monetary tightening – and with the slowing growth that is currently being observed. “There will be a recession, but we are not yet there. The important thing is that liquidity is reduced, says Ninety One’s wealth manager Philip Saunders.
Investors are suspiciously expecting US consumer prices for June on Wednesday. Further acceleration of inflation should support expectations that the US Federal Reserve will raise interest rates by 75 basis points at the next meeting.
Meanwhile, the reporting period for US companies has begun. Pepsico exceeded market expectations in terms of sales and profits in the second quarter. The price increased by 1.2 percent before it was introduced to the market. The AngioDynamics medical technology provider course increases by 2.5 percent. A 13% increase in sales in the fourth quarter translated into a reduction in quarterly loss – despite pressure on margins from higher costs and staff shortages. AngioDynamics expects further sales growth in the beginning of fiscal 2023.
Gap share is presented at 7%. at a discount. The course is a reaction to the resignation of the head of the company Soni Syngal. He leaves the fashion group after just over two years. In addition, Gap warned that given the ongoing decline in sales, profits would also decline. Pricesmart are about 9 percent. cheaper. The operator of clubs with membership camps in Central America and the Caribbean reported disappointing third-quarter results.
Oil prices are falling on fears of an impending recession with a possible collapse in demand. But there are reasons to sell on the supply side. US President Joe Biden flies to Saudi Arabia, incl. to persuade the Kingdom to increase its oil production. Crude oil production from the Organization of Petroleum Exporting Countries (OPEC) fell short of targets in June. However, total OPEC production increased in June. Members of Iran, Venezuela and Libya are also exempt from group quotas.
The bond market is on track to recession with prices rising again and yields falling. An inverted yield curve, where two-year stocks yield more than ten-year stocks, is seen as a wake-up call. Because in the market, this constellation is interpreted as a recession warning.
The dollar continues to gain amid fears of a recession and the dollar index rises by another 0.2%. Greenback and US government bonds are being sought as a supposedly safe haven in economically uncertain times. This cannot be said for the euro. For the first time since 2002, the impending gas crisis and high inflation briefly pushed the single currency below the dollar level.
Despite the uncertain times, gold is also not in demand. A strong dollar weighs on the price of the precious metal, and gold is also caught in a vortex of falling commodity prices – especially base metals.
Term Profitability Bp to VT Profitability VT +/- Bp YTD
2 years 3.05 -3.3 3.09 232.3
5 years 3.02 -4.8 3.07 175.8
7 years 3.02 -5.5 3.07 157.8
10 years 2.94 -5.5 2.99 142.8
30 years old 3.13 -4.4 3.18 123.3
FOREX last +/-% Tue 8:14 Mon, 17:42% YTD
EUR / USD 1.0038 -0.0% 1.0024 1.0077 -11.7%
EUR / JPY 137.32 -0.5% 137.70 138.42 + 4.9%
EUR / CHF 0.9883 + 0.1% 0.9861 0.9877 -4.7%
EUR / GBP 0.8479 + 0.4% 0.8452 0.8470 + 0.9%
USD / JPY 136.84 -0.4% 137.38 137.34 + 18.9%
GBP / USD 1.1840 -0.4% 1.1863 1.1897 -12.5%
USD / CNH (offshore) 6.7382 + 0.2% 6.7382 6.7152 + 6.0%
BTC / USD 19 869.20 -1.8% 19 864.00 20 410.60 -57.0%
ROHL last VT-Settl. +/-% +/- USD% YTD
WTI / Nymex 99.49 104.09 -4.4% -4.60 + 37.9%
Brent / ICE 102.72 107.10 -4.1% -4.38 + 37.1%
GAS VT close +/- EUR
Dutch TTF 174.58 163.50 + 6.1% 10.06 + 43.4%
METALS last day before +/-% +/- USD% YTD
Gold (spot) 1,732.71 1,733.98 -0.1% -1.27 -5.3%
Silver (Spot) 18.93 19.11 -0.9% -0.18 -18.8%
Platinum (Spot) 854.20 873.78 -2.2% -19.58 -12.0%
The future of copper 3.35 3.44 -2.6% -0.09 -24.7%
YTD at the end of the day
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DJG / DJN / flf / kla
(END) Dow Jones Newswires
July 12, 2022 09:01 ET (1:01 PM GMT)
The leverage must be between 2 and 20