Yazar: Geoffrey Smith
Investing.com – The dollar fell to its lowest in nearly three months as Fed officials calmed inflation concerns. Commodity prices rose again. Elon Musk has a new rival to settle accounts. Walmart, Home Depot and Macy’s will report, and the International Energy Agency (IEA) has issued a serious warning about what is needed to mitigate Climate Change.
Here’s what you need to know in financial markets on Tuesday, May 18th.
1.The dollar hits three-month low as commodities glow again
The dollar fell to a nearly three-month low after comments from Fed officials restored confidence in ultra-expansionary monetary policy.
It fell 0.4% to 89,775 and suffered the biggest loss against currencies that yielded high returns such as the New Zealand dollar and pound sterling.
The downward movement started with Fed Vice President Richard Clarida. Clarida said on Thursday that April’s higher-than-expected inflation figures offer no reason for the Fed to start reducing asset purchases.
As always, the weak dollar supported commodity prices. Agricultural products increased the most: coffee futures in London gained over 3%, while US corn, soybeans and wheat grew more than 1%.
2.Michael Burry faces Elon Musk
Elon Musk has a new rival with his own cult.
Famous for his mortgage-backed securities short-selling over a decade ago, Michael Burry opened a short position at Tesla (NASDAQ :), according to an application by hedge fund Scion Asset Management.
Analysts estimate that the bet against Tesla is around $ 530 million. Since no details are given on when the position will open, it is impossible for me to know whether the bet will be in money or otherwise. However, Tesla’s shares were down nearly 7% in the first quarter and are currently 35% lower than their peak. Although it lost more than 2% on Monday, it remained calm before the market.
Other 13-F applications to the SEC last night showed that Berkshire Hathaway (NYSE 🙂 reduced or sold all of the risks with US banks except Bank of America (NYSE :).
3. The stock market will open higher; Walmart and Home Depot earnings are expected
The US stock market is preparing to open higher.
It rose by 91 points, up 0.3% and 0.8%. It has become more sensitive to changes in optimism about the trajectory of interest rates in recent weeks, due to the superiority of young companies that have a long way to stable profitability.
Among the stocks that may be of interest are Home Depot, Walmart and Macy’s, which will report ahead of the opening. The housing start-ups and building permits report will be released, and the housing market is expected to continue operating at fairly high levels.
4.European stock markets saw new highs on return to value shares
With the cyclical weighted national indices taking advantage of the gradual change in global investor preferences towards value shares instead of growth, European stocks are preparing the ground for new rises after the epidemic.
Germany’s Constitutional Court blocked efforts to stop the European Central Bank’s (ECB) bond purchases and saw an all-time high.
The Italian reached the highest level it had seen since the beginning of the epidemic. While Generali (MI 🙂 shared good results, banks in the region also rose as bond yields continued to move towards zero. The euro area GDP reading confirmed that it shrank 0.6% in the first quarter.
5.IEA issues warning on climate targets
The International Energy Agency (IEA) said that if the goals of the Paris Climate Agreement are to be achieved, the world should stop new investments in oil, gas and coal.
Less of these efforts would mean that average global temperatures would rise by more than 1.5 degrees Celsius, the Paris-based think tank established to guarantee the energy security of developed economies.
The IEA’s warnings, if adopted by Western governments, point to higher taxes on carbon emissions and greater incentives to generate cleaner energy. However, the warnings come close to saying that the goal is impossible, and may also encourage climate skeptics to push for lower long-term targets to reduce emissions.
The closest development on energy will be the American Petroleum Institute (API) weekly report on refined product stocks.