Equity markets experienced a broad-based recovery as the earnings season kicked off, with the corporate earnings recession still not surfacing prominently in most calls. Indeed, traders have embraced various bad news, and volatility has increased.
Positive news from the UK gave hope on risk-on sentiments, as UK Chancellor Jeremy Hunt called for the reverse of earlier tax cuts proposal and was ready to dispose of any consideration on an energy price cap initiative. This is likely to stabilise UK fiscal positions and adds confidence to investors, with the pound up by about 1.8% against the dollar.
This helps to cool off the heat on the dollar and allow the equity market some relief rally.
🧮Banks results have been pretty good🗽
So far, we see US big banks releasing a robust set of earnings, although there is a higher provision for credit losses as risks deepen on the health of consumers’ finance. We will look towards Goldman Sachs for its upcoming result, and it is hopeful to be a positive note if it follows the peers.
🍄Berkshire: Calm amidst the storm🔭
Interestingly, one can observe that the valuation of Berkshire Hathaway is almost reaching the likes of Tesla, as the latter stock price fell sharply this year. In contrast, the former Class A shares had declined by around 8% this year, commendable considering the drop of the S&P 500 at about 25%.
While the growth narrative of Tesla has toned down recently, Pika World continues to have some exposure as its cash hoard increases with profitability. It will be releasing results this week too.
📮What’s on the menu today?🍟
It is a data-light week in general.
At 9.15 pm, we will have the Industrial Production data, which we expect a modest improvement of 0.1% compared to a decline of 0.2% in the prior period.
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