Market Munch 🍪| July 25 2022
The Monday Munch is back again - with all the news you need from last week, to start this one. Happy Monday. 💌
Good morning Munchers!
Here is your Monday Munch to get you ready for the week, from Wall Street to Dalal Street - in 3 minutes and 56 seconds.
Let’s dive in.
What’s hot, what’s not?
Market Briefing
The US Fed is due to change it’s base interest rate by 75bps on the 27th of July. Markets are pricing in a 80% change of a 75bps hike and a 20% change of a 100bps hike. Check out this tool.
Earnings season continues this week as Coca Cola, GM, Pfizer and a lot of others are set to report.
Inflation numbers globally continue to hit records. Canada soared to 8.1%, UK hit 9.3% and Europe hitting 8.6%. Keeping in mind that the targets for most of these countries is 2% - it’s quite shocking.
Story Roundup
Biggest headlines of the week/end?
Inverted savings yield curves in China warn of economic slowdown📉
Some of the largest Chinese banks are now offering higher rates on short-term deposits than long-term ones.
Savers are usually meant to accrue more interest the longer they store their money.
China’s Treasury yield curve is normal, but the inverted savings curve signals poor long-term outlook from savers.
Europe’s tourism industry spreads itself thin. ✈️
Everyone was holed into their homes for the last few years - and that pent-up demand is straining Europe’s tourist segment.
Labour is short due to the cuts that were needed in 2020, and travelers are frustrated.
More than 1.2 MILLION vacancies in European tourism jobs need to be filled - or holiday prices will start rocketing.
Netflix took a break from a stock-price hammering.🍿
Netflix lost 900k subs in the first quarter compared to a 2m estimate.
They reported earnings of $3.2/share vis-a-vis expectations of 2.96/share.
H2 will be crucial as they crack down on password sharing and introduce ads to Netflix.
Snapchat snaps away $80bn from ad-heavy companies. 💣
“Forward looking visibility” is “challenging” for Snapchat - which lost 43% of it’s market value in one trading day following earnings.
Snapchat lost $422m in Q2, declining 180% year-on-year.
Snap will “substantially reduce” hiring, change their spending model, and shuffle their strategy up ASAP.
Crypto bros have their first brush with the Law. ⚖️
3 men were charged with insider trading shitcoins - the first case of it’s kind.
Man A (working at Coinbase) gave Man B and C pointers on which coins would be listed on Coinbase - and this helped them profit about $1.1m in total.
This regulation - while harsh - is essential toward the movement of crypto away from a Wild West toward a civilized world.
Bank of Japan continues with easy money policies. 🏯
Rising fuel and commodity costs have pushed inflation beyond the BoJ’s 2% target.
Regardless, the BoJ is in no rush to reduce stimulus as the clouds darken for global economies.
“Underscored by sharp falls in the yen” - the BoJ noted this risk but hasn’t acted on it yet.
Russia cut interest rates for the 5th time this year.
Russia's struggling with a strong currency and weak economic growth. 🤔
They lowered their benchmark interest rate from 9.5% to 8% - more than most were predicting.
They also signaled more cuts of larger size in H2.
Aaaand that’s a wrap.
Thanks a ton for reading. Hope you enjoyed it. Any feedback is open - positive or negative.
Feel free to hit my line at aryaansh.rathore@gmail.com or https://www.linkedin.com/in/aryaansh/.