Global Economic Overview - 06/09/2023

NEWS AND MARKET COMMENTARY

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Global Equities

• Stocks Edge Lower Amid China Data Gloom
• European Stocks Close Flat After Hitting Three-Week High; German Exports Dip

Global Fixed Income

• BlackRock Trims Government Bonds Underweight, More Cautious on Credit
• S. Treasury Yields Jump as Investors Weigh Economic Outlook

Currencies

• Dollar Soars to Five-Month High as US Economy Powers Ahead
• Euro Tumbles Amid Slowing EU’s Business Activity, Drops Below 1.0800

Energy

• Crude Oil Markets Facing Gravity
• Oil Prices Up 25% Since Late June as Supply Cuts Squeeze Market

Metals

• Gold Retreats as Growth Risks Drive Safe-Haven Bids to US Dollar
• Silver Gets Crushed

Global Politics/News

• Fed Governor Waller Agrees the Central Bank Can ‘Proceed Carefully’ on Interest Rates
• Ukraine War Turns the Tables as Russia Seeks Help From North Korea?

Relevant Government Reports?

World Agriculture Supply and Demand Estimates (WASDE)

USDA Agency Reports

Producer Price Index (PPI)

Consumer Price Index (CPI)

U.S. Treasury Report

Fed Report

EIA Reports

EIA Summary?

Financial

Closing Commentary

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Thought of the Day: The wise man must remember that while he is a descendant of the past, he is a parent of the future. – Herbert Spencer

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Equities: The Equities are lower today after the bounce last week. The markets are lower due to The Chinese weakness. In addition, long term concerns regarding the Chinese economy. In addition, the Aviation sector is under some pressure due to the rising Crude prices. Overall, the equities may have started a longer-term retreat. Some of the major Banks are lowering the likelihood of recession. However, the U.S. has anemic growth. The costs continue to rise. As well as the cost of capital. TECHNICAL OUTLOOK - The Dow and the S&P are both at or slightly above the 14, 21-day moving average.

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Fixed Income: The Bonds are lower today. The market has rallied over the last two weeks. The Macro does remain down. The lower trade today is driven by the 10 year at 4.26% today. The Fed has a difficult task. The Printing press is on as the Global community is not buying our Bonds. The difficulty is that the Fed should raise further, but may not be able to. The market may have a near-term low in place for the time being. The Bonds at present are approximately 2 points off the recent low. As suggested here there may not be a raise in the next Fed report. TECHNICAL OUTLOOK- The market is below the 14, 21, 140-day moving average. The lows will need to hold.

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Metals: The Metals are lower with the 10 year at 4.26%. In addition, the Dollar is extending the recent rally off the Lows. The Silver and Gold are in a volatile period. There are new concerns over the Chinese economy and long-term demand. The Metals remain a safe harbor given the Global uncertainty. The recent break should be supported. The next Fed move will be watched closely. TECHNICAL OUTLOOK - the Metals are at the 14, 21-day moving average.

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Energy: The Crude is up today in the highs 80's. the market is supported by the recent Saudi and Russian cuts. The concern is that China is slowing. It is important to remember that the Chinese energy demand has not faltered. It is actually higher than a year ago. It is also important to remember that China is buying Crude at a discount from Russia. Given the geopolitical scenario this dynamic should not change. TECHNICAL OUTLOOK - The Crude is well above the 14, 21, 140-day moving average, making new 14-day highs. As suggested here the Crude will be supported and move towards the 90-dollar mark potentially. It may take a new development to move much higher.

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