A record-breaking IPO deluge could be coming this autumn

The latest reports suggest that autumn 2021 will be the busiest period for IPO launches to date.

IPO launches

Potentially hundreds of new public offerings are on their way

2021 has already seen the highest number of initial public offerings since the 2000 dot-com boom. It could be about to see more as we transition into autumn.

CNBC reports that up to 110 companies will go public across the next 3-4 months. That would bring the total number of deals up to 375 – valued at a cool $125bn in fundraising.

In the pipeline, we see a mixture of companies but a significant number of FMCG and food firms are on the radar.

Grocery business Fresh Market, deliver service Instacart, and Greek yoghurt producers Chobani are in the process of making their initial filings. Adding to the list of food-related businesses prepping their IPOs are casual salad restaurant chain Sweetgreen and Impossible Foods, a manufacturer of plant-based meat alternatives.

A number of fashion firms are involved too. Warby Parker, the prescription eyewear business, will likely be going live with a direct listing in the coming months. Authentic Brands, which owns the Nautica and Eddie-Bauer brands, has been eyeballed as about to go public, alongside Indian e-commerce retailer Flipkart and sustainable footwear brand Allbirds.

Digital payment processor Toast and mobile payments processor Stripe represent some of the tech stocks possibly launching IPOs.

They may be joined by several cryptocurrency filings. We’ve already seen Coinbase, the US largest crypto exchange, go public, and there are indicators other digital currency businesses will join them. Sustainable crypto mining firm Stronghold Digital Mining is one such company.

Others to watch include EV builder Rivian Automotive, global asset manager TPG and Republic Airways.

In terms of direct listings, the only one mentioned so far is Warby Parker.

What about SPACs?

It’s thought that SPACs – special-purpose acquisition companies – may have a tougher time raising capital for initial offers in the second half of 2021. Greater scrutiny from regulators like the SEC and a drop off in investor returns from SPACs may contribute to this.

The first half of the year, however, was a SPAC bonanza. 310 such offerings were launched then, generating $70bn in funds. A further 410-blank cheque companies smashed records too when they raised $109bn in the same period.

Will investors make returns?

It’s hard to say at this stage. After market performance has generally been negative across 2021 so far. Some much-anticipated tech stocks, like Coinbase or Robinhood, underperformed after going public for a myriad of reasons. In the case of Robinhood, its links to the volatile cryptocurrency market has caused several fluctuations in the share price.

Pricing IPOs towards the lower end may help sustain growth going forward. Some IPO-tracking ETFs, such as the Renaissance Capital IPO ETF, were flat towards the end of H1 2021, but have subsequently gained traction in July and August. Public offerings since then have been had lower pricings, which may have fed into heightened investor interest.

With the rumoured number of new IPOs, however, it may be worth prepping your trading calendar now. Be sure to stay tuned to Markets.com for further initial public offering updates.

Cryptocurrency update: BTC rally pushes crypto market above $2 trillion

Key tokens start the day with greens across the board, with Bitcoin and Ethereum leading the charge.

Cryptocurrency update

Global cryptocurrency market hits $2 trillion

With BTC and ETH reaching highs not seen for months, the total value of the global crypto market has exceeded $2 trillion for the first time since May.

Bitcoin crept above $48,000 on Monday morning, although it fell back towards $47,175 as the day progressed. Ether, which has strengthened on a successful network upgrade, is on a seven-day high after gaining 11% throughout the week. Cardano is up 53% across the last seven days.

It’s a good sign of market confidence in digital tokens. Bitcoin in particular had been experiencing a torrid couple of months recently. A strong sell-off in July, precipitated by falling token prices influenced heavily by China’s crypto crackdown, caused prices to dip below $30,000. Now, they’re rallying strongly and eyeing up the next resistance level.

During the BTC sell-off with prices at their lowest in July, the overall crypto market cap was around $1.12 trillion. Its peak, recorded in May when Bitcoin was trading at all-time highs, totalled $2.5 trillion.

There is still ground to recover. Volatility, however, is never far away from the world’s cryptocurrency markets.

While the bulls are feeling pretty good, there is still time for prices to go south again. Analysts predict the current BTC surge could top out at around $55,000. After that, the token may begin to fall away below $30,000 again.

The impact of the upcoming US Infrastructure Bill’s crypto tax provisions has yet to be truly felt.

That said, some are still optimistic. Others are predicting BTC hold its place above $40,000 and possibly over $50,000, going forward.

Singaporeans prefer Ether

A joint survey by digital token exchange Gemini, crypto market data analysts CoinMarketCap, and finance platform Seedly has revealed Singapore’s favourite coin: Ether.

78% of those surveyed by the group stated they hold onto Ether, compared to 69% that hold Bitcoin. Cardano was the third most popular token with 40% of respondents saying they had invested in it.

4,000 adults were surveyed as part of this study. 67% of respondents said they included digital tokens in their portfolios, and two-thirds of that group said they had increased their crypto holdings during the pandemic.

A fifth of those surveyed said that half or more of their investments are in cryptocurrencies.

Ether has been tipped to overtake Bitcoin as the world’s most popular digital token in the future. Many decentralised finance (DeFi) apps run off the Ethereum blockchain network, for instance, and users wishing to use said blockchain must pay a small fee in ETH to do so.

The network’s recent London Fork upgrade has introduced more user-friendly features, which may explain why ETH is rallying right now.

Still, with Bitcoin accounting for up to 68% of the total worldwide crypto market, Ether has some way to go before it can challenge for the top spot. It does appear, however, to be moving in the right direction – particularly if one nation’s traders and investors are seeing high potential in Ether.

The top five crypto-investing banks revealed

Institutional support for cryptocurrencies has been steadily building throughout the year, even with Bitcoin’s erratic price behaviour. Banks have stepped up their digital finance services and offers and been keen to grab their slice of the $2 trillion market.

A report from Blockdata has put together the 13 banks investing the most capital into blockchain networks and cryptocurrency wallets. Together, they represented over $3bn in investments. This includes token purchases and acquisition, as well as investment into tech companies and others in the digital finance ecosystem.

Blockdata said it reviewed banks in terms of size of funding rounds as a proxy of investment into the crypto space, saying it used that measure as banks participated in funding rounds with multiple or many other investors.

The top five crypto-investing banks as identified by Blockdata are:

  • Standard & Chartered – $380m in 6 investments
  • BNY Mellon – $321m in 5 investments
  • Citibank – $279m in 14 investments
  • UBS – $266m in 5 investments
  • BNP Paribas – $236m in 9 investments

While the above banks represent those betting the most on the crypto sector, it’s starting to pick up steam amongst other financial institutions.

55% of the world’s 100 biggest banks by assets under management are investing directly or indirectly in companies and projects related to digital currencies and blockchain, according to Blockdata research.

 

Stocks start the week softer

Risk-off: Equities are showing softness in early trade Monday with the major European bourses lower after a weak session in Asia. We can look to Covid-related slowdowns, particularly the spread of delta in Asia, softer-than-expected Chinese data, and the fallout from a very poor University of Michigan consumer sentiment report on Friday. I’d even speculate that the tragedy in Afghanistan is a factor in the downbeat mood. This foreign policy disaster will have repercussions – President Biden will never recover from it. The scenes of chaos as the US evacuates Kabul is too reminiscent of Saigon.  

 

Nevertheless, after a decent run-up – record highs on Wall St, a new all-time high for the DAX and a post-pandemic peak for the FTSE 100, some giveback can always be expected. US futures were softer and the VIXX has jumped to 20 this morning with 10yr Treasury yields down to 1.26%. Meanwhile, oil is weaker and gold and Bitcoin firmer. 

 

Stagflation index: We had the weakest Michigan consumer confidence number since 2011, as the consumer sentiment index slumped to 70.2 from 81.2 last month. This was the third-worst reading in 50 years. Meanwhile, 5-yr inflation expectations rose to 3% from 2.8% as consumers worry that the permanent erosion of $ purchasing power will be a problem. 

 

UoM: “There is little doubt that the pandemic’s resurgence due to the Delta variant has been met with a mixture of reason and emotion. Consumers have correctly reasoned that the economy’s performance will be diminished over the next several months, but the extraordinary surge in negative economic assessments also reflects an emotional response, mainly from dashed hopes that the pandemic would soon end. In the months ahead, it is likely that consumers will again voice more reasonable expectations, and with control of the Delta variant, shift toward outright optimism. Consumers’ reaction to Delta’s modestly higher precautionary measures indicates the difficulty of producing optimal policy responses.” 

 

Meanwhile, the Delta variant is spreading, and China’s economy is slowing –  industrial production rose 6.4% vs 7.8% expected. Japanese GDP was more robust as it avoided a double-dip recession, but the major Asian economies are not a source of enormous confidence right now. 

 

Taper talk: Minneapolis Fed president and arch-dove Neel Kashkari said he would “feel comfortable” with tapering asset purchases “If we see a few more jobs reports like the one we just got”. He also stressed the Fed needs to “pay attention to… the inflation side of our dual mandate”. Yes, that would be a good idea… 

الأسبوع المقبل: الفيدرالي يجتمع مع نهش التضخم

يجتمع الفيدرالي مع بدء التضخم في نهش الاقتصاد الأمريكي. هل سنرى أي تغيرات كبيرة من بويل وشركاه؟ الناتج المحلي الإجمالي الأمريكي أيضًا في بؤرة الاهتمام، مع دعوة التوقعات إلى مزيد من النمو الفصلي القياسي. في الوقت ذاته، تضغط Tesla على دواسة الوقود في أسبوع موسم الأرباح الأمريكي الأكثر ازدحامًا حتى الآن لهذا الفصل.

بطرح تقارير الأرباح جانبًا، فإن الحدث الأكبر لهذا الأسبوع هو اجتماع اللجنة الفيدرالية للسوق المفتوحة.

سيصبح التضخم والاقتصاد العامل دون قيود محط الأنظار على الأرجح خلال محادثات يوليو. لقد شهدنا مؤخرًا الرئيس بويل يتعهد «بدعم قوي» للاقتصاد الأمريكي بعد الجائحة، على خلفية تضخم متزايد.

بحسب بويل، فإن أسعار المستهلك المتزايدة الحالية ترجع إلى إعادة فتح البلد وسوف تخفت. التزم بويل بسيناريو الوظائف، في شهادة أمام مجلس النواب الأمريكي، حيث أشار إلى أنه ما زال هناك 7.5 مليون وظيفة فقدت من اقتصاد الولايات المتحدة فيما قبل الجائحة.

ما زال خفض التحفيز بعيدًا بعض الشيء بحسب بويل. لن يتغير على الأرجح برنامج الفيدرالي لشراء سندات بقيمة 120 مليار دولار شهريًا. كما ذكر فيما سبق، فإن هذا مربوط بأسواق العمل. سيبقى على الأرجح شراء السندات ودعم الفيدرالي حتى تُملأ فجوات الوظائف تلك.

ليس متوقعًا رفع الأسعار حتى 2023 في أقرب تقدير.

لكن فيما يتعلق بحديث الفيدرالي عن التضخم وكونه ذو قاعدة عريضة، وناتج عن نشاط اقتصادي مرتفع، يبقى الكثيرون غير مقتنعين بخطة ترك الاقتصاد يعمل دون قيد.

كانت قراءة يونيو الأساسية لمؤشر سعر المستهلك البالغة 5.4% أعلى قراءة خلال 13 عامًا تقريبًا. ويأمل المراقبون من الجانبين الديمقراطي والجهوري أن هذا يمكن ترويض هذه الزيادة في وقت قريب نسبيًا.

لقد وعد بويل بأن التضخم إذا استشرى، «سنستخدم أدواتنا لتوجيه التضخم إلى أسفل مرة أخرى».

لكن «التصرف المبكر سيكون خطأً».

ونبقى مع الاقتصاد الأمريكي، حيث يحين موعد القراءة الأولى للناتج المحلي الإجمالي للربع الثاني للأمة يوم الخميس.

التوقعات جيدة حتى الآن. تذكر Deloitte أن التقدم التكنولوجي قد يساعد في تقوية الولايات المتحدة نحو ربع وافر آخر – يتجاوز مستويات نمو ما قبل الجائحة.

توقع مجلس المؤتمر نمو الاقتصاد الأمريكي بنسبة سنوية تبلغ 9% في الربع الثاني من 2021.

قالت TCB، «مع إعادة فتح الاقتصاد بصورة كاملة واستمرار ثقة المستهلك في النمو، نتوقع أن يساعد إنفاق المستهلك على دفع التعافي إلى الأمام، خاصة الإنفاق على الخدمات الشخصية». «سيدعم هذا الإنفاق سوق العمل الذي تزداد قوته، ومُجمَّع ضخم من المدخرات الناتجة عن ثلاث دورات من شيكات التحفيز المالي الموزعة خلال العام الماضي».

لقد شهدنا أيضًا في إصدارات مؤشرات مديري المشتريات السابقة أن قطاعي التصنيع والخدمات قد واصلا العمل على وضع متنام في يونيو، بعد أداء قوي في أبريل ومايو. ينبغي أن تدعم ثلاثة أشهر من الأداء القوي لمؤشر مديري المشتريات نمو الناتج المحلي الإجمالي الأمريكي في هذا الفصل.

لكن مرة أخرى، يؤدي إطلاق كل هذا الطلب المكبوت إلى أسعار البضائع الاستهلاكية الأساسية الأعلى الذي تختبره الولايات المتحدة في الوقت الراهن. لقد وردت إلينا أيضًا تقارير عن أسعار مدخلات مرتفعة بدأت تؤثر في الناتج التصنيعي. كانت قراءة مؤشر مديري المشتريات التصنيعي لشهر يونيو أدنى قليلًا من قراءة مايو، على سبيل المثال.

لكن، إذا صدقت التوقعات، فإن الولايات المتحدة توشك على اختبار فترة من أفضل فترات نموها الفصلي منذ الحرب العالمية الثانية.

بترك البيانات، فإن هذا الأسبوع هو أكثر أسابيع موسم الأرباح ازدحامًا هذا الفصل حتى الآن.

تشارك 40 شركة تقريبًا من الشركات الأمريكية ذات رأس المال الضخم أرباح ربعها الثاني هذا الأسبوع. يشمل هذا مجموعة أسهم FAANG. أصدرت Netflix تقريرها في الأسبوع الماضي، لكن عمالقة التكنولوجيا الباقين التاليين: Alphabet (Goolge) وAmazon وFacebook وApple يصدرون تقاريرهم.

إلا أن Tesla، تبدأ الإجراءات بموجز أرباحها يوم الإثنين بعد إغلاق السوق الأمريكي.

هذا الأمر مثير للاهتمام، لأن Tesla قفزت 330% من جهة سعر السهم بين مايو 2020 ومايو 2021، وتميل أسعار الأسهم في المعتاد إلى الارتفاع قبل إصدارات Tesla. لقد حدث ذلك بمتوسط 1.6% قبل كل الإصدارات الفصلية في الأعوام الثلاثة الماضية.

لدى مصنع سيارات إلون ماسك الكثير للاحتفال به هذا الفصل. فقد سلَّم 200،000 في فصل واحد لأول مرة. أطلقت Tesla أيضًا مجموعة من خدمات الأتمتة الجديدة، المعتمدة على خدمة اشتراك شهري بقيمة 199 دولار في الشهر.

توقعات الأسعار قوية، لكننا سنعرف المزيد يوم الإثنين.

لمزيد من المعلومات عن أي الشركات ذات رأس المال الكبير تصدر تقاريرها، تأكد من تفقد تقويمنا للأرباح الأمريكية.

أهم البيانات الاقتصادية لهذا الأسبوع

Date Time (GMT+1) Asset Event
Mon 26-Jul 9.00am EUR German ifo Business Climate
 
Tue 27-Jul 3.00pm USD US Consumer Confidence
 
Wed 28-Jul 2.30am AUD CPI q/q
  2.30am AUD Trimmed Mean CPI q/q
  1.30pm CAD CPI m/m
  3.30pm OIL US Crude Oil Inventories
  7.00pm USD FOMC Statement
  7.00pm USD Federal Funds Rate
  7.30pm USD FOMC Press Conference
 
Thu 29-Jul 1.30pm USD Advanced GDP q/q
  3.30pm GAS US Natural Gas Inventories
 
Fr 30-Jul 9.00am EUR Germany Preliminary GDP q/q
  1.30pm CAD GDP m/m
  1.30pm USD Core PCE Price Index m/m

 

أهم تقارير الأرباح لهذا الأسبوع

 

Mon 26 Jul Tue 27 Jul Wed 28 Jul Thu 29 Jul Fri 30 Jul
Tesla 3M Automatic Data Processing CME AbbVie
General Electric Boeing Keurig Dr Pepper Aon
Advanced Micro Devices McDonald’s Mastercard Caterpillar
Alphabet (Google) Pfizer Merck Chevron
Apple Shopify Amazon Exxon Mobil
Microsoft Spotify Gilead Procter & Gamble
Mondelez Facebook Liberty Global Takeda Pharmaceutical
Starbucks Ford Pinterest Berkshire Hathaway
Teladoc Health PayPal Twilio
Visa Qualcomm

 

European stocks in broad decline, oil weaker after OPEC deal

Risk is firmly off this morning with European stock markets slipping in early trade, led lower by the travel and energy sectors. US futures are weaker after Friday saw the first down week on Wall Street in four. Bank earnings were strong, but markets have already discounted an exceptionally strong reporting season. Meanwhile concerns about variants, rising cases and declining vaccine efficacy are all conspiring to knock confidence. The FTSE 100 slumped to a 2-month low in early trade as it retreated well south of 7,000. US 10yr Treasury yields hover around 1.28% but are off the low hit earlier close to the 200-day SMA. I think we are already in a high summer lull for stock markets. 

 

Inflation was the big story last week and remains the big question mark hanging over markets. Consumer expectations have shot higher – the University of Michigan released its report on Friday showing consumers think prices will rise 4.8% over the next year. Earlier in the week the CPI print hit 5.4%. As expressed in these columns on many occasions, the risk was always that expressing a tolerance for inflation to run hot via average inflation targeting, the Federal Reserve was letting inflation expectations become unanchored, leading to a period of sustained high inflation. 

 

Ocado shares slipped 3% in early trade as investors assessed the impact that a fire at one its fulfilment centres will have. There is the immediate operational impact at Erith with orders being cancelled following the blaze, which was caused by a three-robot crash. There is reputational risk from cancelling swathes of orders – small I’d say – but nonetheless to be considered. But the main thing investors are concerned about is the safety of the technology – will this be repeated? It is only two years since the Andover facility burned down. Will this impact on future deals with international partners?

 

Oil prices slipped to their weakest level in a month as OPEC+ finally reached accord over production increases. With Saudi Arabia and the United Arab Emirates making up, it removes the kind of pump-at-will tail risk for the market, but it’s a fragile peace. OPEC+ will now start incrementally raising production by an additional 400k bpd each month through to December, adding 2m bpd to output by the year end. Production will continue to rise next year at a rate of an extra 400k bpd each month through to the end of 2022. Baseline changes make it a bit it bit of a muddy picture in the latter part of next year, but front month pricing chiefly reflect the apparent success for OPEC in showing it will continue to work hard to manage oil markets. The broad risk off tone in the market amid concerns of variants, rising cases and declining vaccine efficacy is also contributing to the soft price action this morning for oil. WTI (Sep) is flirting with the Jun lows around the $70 level, where the 50-day SMA is offering support for now.

 

Looking ahead to this week we are interested in some speeches from Bank of England rate setters. Inflation in Britain spiked to 2.5% recently, raising the prospect that the Monetary Policy Committee will be forced into an earlier tightening of conditions than it has guided so far. Last week both Ramsden and Saunders sounded the hawkish alarm over inflation – so look to comments today from Haskel and Broadbent on Thursday for more of a steer. Central banks like to communicate policy direction ahead of time, so we would consider these statements likely to signal the MPC is about to tighten. 

 

There is a light economic calendar today – Haskel tops the bill along with the German Buba report, whilst later in the US session we await the NAHB housing market index. 

 

Bitcoin futures: Price action is frankly horrid – expecting another leg lower soon.

Bitcoin price action chart for July 19th.

UK growth cools and is there still more downside to this market pullback?

Reopening can’t come soon enough: UK GDP expanded by a meagre 0.8% in May, led by indoor hospitality, but held back by a global chip shortage hitting car production. The monthly growth rate was below the 1.5% forecast and leaves the economy 3.1% below its February 2020 pre-pandemic size.

Stocks sold off on Thursday. The kind of worries that have seen narrowing breadth and overbought conditions for the major indices broke over the broader market. Concern about China regulatory pressure on big tech, and concerns about antitrust stuff in the US have gnawed away at the margins. Worries about the rise of the Delta variant globally are also a factor – Tokyo’s decision to ban spectators was taken as a warning that Covid the pandemic is far from over. The biggest worry it seems it this sense that we have hit peak growth – and hit peak expectations a couple months back as evidenced by the top in the commodity market. The last one-two months has seen mega cap growth do all the lifting as the reflation trade unwinds but even with lower rates we saw the market come off yesterday, so there is just this broad sense of being overblown after a 5% rally for the S&P 500 in the last fortnight, while the Treasury market is not making much sense at all and the recent plunge in yields is apparently without any justification and being explained away as a technical thing. This is true but it is not entirely the whole story, and we now face the risk of the 10yr being at 1% at year end and not 2%. Or at least that is what the market seems to be saying – in fact I’d expect once this flushing out of the market (painfully), normal service will resume with the Fed beginning to signal the taper in Aug/Sep.

The US 10yr note yield rallied off a low at 1.25% to reach 1.33% this morning. US equity indices finished Thursday down but well off the lows. The S&P 500 fell 0.86% to 4,320 after hitting a session low of 4,289. The Dow Jones declined 260pts but was about that much off the low of the day by the close. The S&P 500 could still drop another 100 pts to the 4215 area to perform the tap on the 50-day SMA that has been a feature of recent pullbacks. After running up 5% in just two weeks it was ripe for a pause, if not a deeper pullback – the 50day line looks appealing. Current trailing PE of 30 for the S&P 500 suggests it’s heavily overbought – earnings season kicks off next week and with high expectations and the broad market +15% YTD it could be a sell the news affair.

Still a bull market: corrections like these are seen as ‘healthy’, rotation is about positioning for growth not running for cover. Bank of America’s closely followed Flow Show notes that ‘poor level of yields and Wall St dependent Fed remain key reasons why stocks and credit investors still believe in TINA’. Futures this morning indicate a higher open on Wall Street.

The Dow transports index slipped 3% with Biden taking aim at rail and sea shipping with an executive order addressing competition in the US economy. Pain for meme stocks continued with AMC, GME falling sharply in early trade before ending the day higher in an impressive turnaround. Meanwhile, the US is to place more Chinese companies on its blacklist. San Francisco Fed president Mary Daly warned on prematurely declaring victory over the pandemic.

Signs of inflation cooling? China’s factory gate price growth cooled in June, as the rollover in the commodity market following the May peak eased cost pressures. China’s producer price index still rose 8.8% in June, but this was down from the 9% growth in May.

The FTSE 100 is higher in early trade Friday to recover some of the ground lost on Thursday when it declined 1.7%. Continues to tread a 3-month range as the 78.6% Fib level at 7.155 continues to prove a tough nut to crack.

FTSE 100 performance as indicated on multi-symbol chart.

S&P 500: Looking for the 50-day tap on the S&P 500 before the weakest hands are flushed out?

S&P 500 performance indicated on a chart.

EURUSD: looking for a breakout of the trendline, potential bullish crossover on the daily MACD coming?

EURUSD chart showing currency pairing performance.

European stocks slide in wake of Fed minutes

European stock markets continue to trip the ranges – sliding sharply this morning following yesterday’s jump. The FTSE 100 dropped 1.3% in early trade to the 7,050 level, whilst the Euro Stoxx 50 declined 1.7% to test 4,000. Asian shares were broadly weaker overnight, with a steep fall in South Korea registered as daily Covid cases there surged. Bonds are still bid as weaker hands get washed out with the 10yr Treasury note yielding 1.28%, a new 5-month low in the wake of the Fed meeting minutes – it’s either sending a warning signal or it’s just a flush before the move higher. US stock markets were mildly higher yesterday, with futures pointing to a drop at the open. Apple shares hit a fresh record, whilst meme stock favourites such as GME, WISH and AMC fell sharply. In London, money transfer app Wise got off to a solid start as shares rallied on the first day of trade. Shares in troubled Chinese ride hailing app Didi fell another 5% as it faces a lawsuit from US shareholders.

Minutes from the FOMC’s meeting in June showed pretty much what we knew; policymakers are moving but with a degree of caution. “Various participants mentioned that they expected the conditions for beginning to reduce the pace of asset purchases to be met somewhat earlier than they had anticipated” but it is “their intention to provide notice in advance of an announcement to reduce the pace”. Meanwhile China is back in the game – the State Council issued a statement saying it would seek “to increase financial support to the real economy” by using “monetary policy tools such as RRR cuts”.

Deliveroo reported a better-than-expected rise in revenues in the second quarter but cautioned it would not lead to better profits. Gross transaction value (GTV) rose 76% year-on-year to £1.7bn. For the full year, the company raised its GTV growth estimate to 50-60% from 30-40%. However, gross margins are seen in the lower range of what was previously communicated, with management citing investment and lower average order spend. Looks to me like it should be making more money if GTV growth is a full 20 percentage points higher than expected. Poses serious questions about the model if it cannot at least deliver margins in the upper range of expectations on such impressive sales growth.

Oil prices slipped as the gulf between OPEC and the UAE showed no signs of closing. The UAE signalled it could open the spigots to pump at will. The fear is the supply deal could unravel, heaping more crude on the market. WTI (Aug) held at $73 the first time but cracked on the second attempt and quickly declined and found support at $71. Another test at this level can be expected.

Oil chart showing prices of crude on 08.07.2021.

Finally, it was great to see Wembley almost full last night with tens of thousands of fans. No masks, plenty of singing, social distancing forgotten. So why can’t my kids have a school sports day? The inequities of opening up are legion, almost as much as the inequality of lockdown. We can only pray the mask-wearing Covid Stasi are silenced for good and we can get on with our lives.

Afternoon rap: Rates, USD bid, stocks slip

Post-July 4th blues: Rates were bid and yields slipped, with the US 10yr back to post-Fed lows around 1.35%. It could be that there is a fair amount of fixed income flow to greet the start of the new quarter after a solid run for equities in H1. It could also be that the market is betting the Fed won’t let the economy run all that hot, and that infrastructure spending will be a disappointment. It could also be a factor of holiday-week illiquidity in US bond markets and a bit of Independence Day hangover. Personally, I think this is the kind of fake out you need before you see a good run up in yields later this year towards 1.7% on 10s. But if you really simplify it suggests the market doesn’t think growth will be as strong though the surveys say otherwise. The move lower came as the US ISM June services PMI hit 60.1, short of the 53.5 expected and down from 64 last month. As bonds rallied the dollar caught some bid with DXY back above 92.50, while stocks have slipped. Remember this moves also comes ahead of the minutes for the FOMC’s last meeting at which it signalled a renewed concern around inflation – the hawkish pivot.

Reflation winners faded and the FTSE 100, which is exposed to the pace of global reopening, is down around 1% as it took a sharp tumble as US cash markets opened at 14:30. The UK market was also dragged lower by a sharp pullback in oil prices, which seemed to follow the short-term-bullish, longer-term-bearish OPEC talks breakdown playbook, though in a much tighter timeframe than most of us thought. Utilities were higher by around 0.35%, whilst Basic materials and energy led the fallers. Financials were also hit by the decline in nominal rates.

The S&P 500 is down around half of one percent with big tech doing a lot of lifting to offset some sharp falls in other sectors with about 6:1 declining to advancing stocks. Energy and financials declined 2%, while tech advanced 0.5%. SPX currently sits around 4,330 with the Thursday close at 4,319 the key near-term support. The Nasdaq remained flat as lower rates = good for growth/mega cap/momentum names. Conversely, DJIA slipped almost 0.9%.

Oil has retreated sharply in the wake of the post-OPEC spike. It looks like the market is more worried about a potential crisis at the cartel than it likes the lack of fresh supply coming on in H2. WTI tests the 200-hour SMA at $74 where it finding a little support. A break could see $72. Traders seem concerned that the speculative positioning could be unwound in the coming days if the OPEC+ deal were to start to unravel, ultimately leading to more crude and a less stable oil market.

Crude oil futures price action in the afternoon of July 6th 2021.

Gold: easing off the highs but remains well supported with bulls in ascendancy above $1,800 and bullish MACD crossover still valid.

Performance of gold as of July 6th 2021.

Oil hits highest since Nov 2014, possible gold breakout

Oil advanced to its highest since Nov 2014 as OPEC+ abandoned its July meeting, after the United Arab Emirates stood its ground over production increases. The failure to agree to increasing production in August and beyond leaves the market even more in deficit than before, so front month WTI spiked to a near 7-year peak this morning close to $77. Saudi Arabia and Russia had agreed to increase production by 400k bpd monthly from August to December, adding an additional 2m bpd from current levels of supply by the year end. However the UAE wanted to recalculate the baseline for its production quota as it has significantly increased capacity in the last 2-3 years. This is an interesting moment for the path of oil prices – does the breakdown signal a push to $100 is on, or will it lead to more uncertainty and more oil on the market longer term? The short-term effect is less oil on the market (bullish), but it exposes the OPEC+ production deal to a risk of breaking down, which could see producers pumping much more (bearish). There is a risk that compliance with current production quotas will lessen, whilst the UAE could yet threaten to leave OPEC and pump what it chooses. Sec gen Barkindo said a new meeting would be called in due course.

Stock markets in Europe edged a tad lower this morning after finishing higher on Monday despite a weak start to the session. Indices continue to tread well-worn ranges. US futures are steady as Wall Street returns to life following the long weekend. The FTSE 250 hit a new record high in early trade as England heads towards the lifting of all Covid restrictions on July 19th. Clearly reopening is good for domestic growth, so it’s been seen as a positive for UK-focused stocks.

Shares in Chinese ride hailing app Didi slumped as much as 28% in pre-mkt trading after the app was removed from the country’s app stores. It’s a complicated picture – there are reports Didi knew of a regulatory crackdown and was even asked to delay its IPO. Didi says it had no knowledge of the actions by the cybersecurity regulator. The stock only started trading on Wednesday and the ban announced Sunday. China is cracking down on big tech, but the decision to remove the app from domestic platforms appears to be timed for maximum impact and embarrassment. China’s Communist Party is bristling at the number of Chinese companies listing in the US this year, but there is a genuine concern at the heart of this – regulators are not impressed at the way Didi and other Chinese tech companies handle data. The SEC will not be impressed either way.

Sainsbury’s reports like-for-like sales rose 1.6% in Q1, with sales across the board higher than expected in the quarter as it benefitted from continued pandemic-related restrictions. On a two-year basis, total retail sales are up more than 10%. Management raised the profit outlook for the year to £660m against £630m anticipated. Sainsbury’s says it will use some additional profit to invest in the customer offer – yesterday it announced £50m on targeted price reductions on ‘everyday essentials’. Supermarkets have done well out of the pandemic, but it’s unclear the extent to which reopening will negatively impact sales against some very tough comparisons. Inflation is also risk in this ultra-competitive sector. If you’re a shareholder, the last thing you want is a supermarket price war right now.

It’s been a tough year for Ocado shareholders as the reopening trade went against them, leaving the stock down ~14% YTD. But shares are up 2% this morning after another solid half-year report. Group revenues rose 21.4% to £1.3bn, with its retail business growing to £1.2bn, up 19.8%. The waiting game continues abroad: International Solutions revenues of £26.6m but management affirmed that Ocado Smart Platform (OSP) fees are building as expected. Group EBITDA more than tripled to £61m, but still the group reported a loss before tax of £23.6m, though this was down from £40m last year. Meanwhile Morrisons is steady at 266p as investors bank on another offer or two before this bidding war ceases.

Australia’s central bank said it will begin tapering asset purchases to maintain the target on the country’s three-year yield. The Reserve Bank of Australia will pare weekly bong buying from A$5bn to A$4bn as it continues to target a yield of 0.1% on its three-year paper, while leaving the benchmark interest rate unchanged at 0.1%. Overall, the message was a little more hawkish than expected, with the tapering and change in language around the forward guidance. AUDUSD advanced to its highest in a week, with 0.76 offering near-term resistance.

Elsewhere, the dollar fell as the European session got underway. GBPUSD continues to break out of the downtrend.

Chart showing GBPUSD performance on 6th July 2021.

Gold is firmer with a bullish MACD crossover confirmed on the daily chart and push clear of $1,800 now possible.

Gold price action indicated on a multi symbol chart.

Stocks slip, Morrisons up as bidding war intensifies, OPEC still stuck

European stocks slid early on Monday as they continue to run up and down well-worn ranges. On Friday, the S&P 500 rose for a 7th straight session and notched another all-time high after a strong jobs report. The nonfarm payrolls report indicated US employers added 850,000 jobs last month, the strongest number in 10 months and a sign that hiring is accelerating as pandemic-era support is scaled back. However, the unemployment rate rose to 5.9%, against expectations it would fall to 5.6%. In all this was a positive report for stocks, indicating solid-but-not-too-hot economic recovery and keeping the Fed on the course the market sees it on. Yields fell, with the 10-year back to its lowest since March, and the dollar eased back after being bid up all week. The soft finish last week for the dollar has continued into Monday but we should caution that the Independence Day holiday today, held over from yesterday, will keep US markets closed, and maybe keep equities from making any serious moves. Overnight Asian shares were steady as the Caixin services PMI fell to a14-month low. 

 

Bidding war intensifies: Morrisons shares leapt again after management said over the weekend they have accepted a £9.5bn offer from Fortress. The deal values the stock at 252p, a 42% premium to the undisturbed price, plus a 2p special dividend. Apollo Global Management said in a statement this morning that it is now considering an offer.  Shares this morning trade up 11% at 267p, reflecting a premium to the agreed bid that indicates investors believe there could be more juice to be squeezed from this particular bidding war. I think there could well be another offer or two and 280p might be seen before it’s a knockout. We’ve talked fairly regularly about the amount of private equity money there is waiting for UK companies, which are cheap vs peers. Given our interventionist chancellor wants to open up the listing process to make it more appealing to list in London, he may also want to consider ways to shore up the defences of public companies. When you look at UK valuations vs US and even European peers it’s still too cheap.

 

Talks among OPEC members and allies continue today after the cartel failed to reach agreement on a planned increase in production last week. The UAE remains the obstacle to the OPEC+ group raising output by an extra 400k bpd each month from August through to December, slowing turning on an extra 2m bpd by the end of the year. It would also extend the production agreement through to the end of 2022. The UAE, which threatened to leave OPEC last year, says it unconditionally supports a deal but is seeking better terms. Essentially it wants more share, saying that the original output deal no longer reflects the country’s production capacity. WTI for August trades above $75, with the market fundamentals apparently bullish whether there is a deal or not. An unusually sedate oil market around a drawn-out, disputed OPEC meeting tells you the market is tight and 400k bpd is not enough to right it. 

 

Solid run up in gold as yields came off but $1,800 remains obdurate defence. Watching potential bullish MACD crossover. TIPS are supportive with the 30yr inflation protected yield negative and at its lowest since February.

 

Chart showing gold performance with MACD crossovers highlighted.

Bitcoin futures holding under the 200-day SMA:

Bitcoin chart showing 200 day SMA.

CySEC (أوروبا)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • تعويضات صندوق تعويضات المستثمر FSCS تصل إلى 20000 جنيه إسترليني
  • تغطية تأمينية بقيمة 1000000 يورو**
  • حماية الرصيد السلبي

المنتجات

  • CFD
  • تعاملات الأسهم
  • Quantranks

Markets.com، التي تتولى تشغيلها شركة Safecap للاستثمارات المحدودة ("Safecap”) مرخصة من قبل مفوضية قبرص للسندات والتداول (CySec) بموجب الترخيص رقم 092/08 ومن قبل هيئة سلوكيات القطاع المالي ("FSCA") بموجب الترخيص رقم 43906.

FSC (العالمية)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • التحقق الإلكتروني
  • حماية الرصيد السلبي
  • تغطية تأمينية بقيمة 1000000 $**

المنتجات

  • CFD

Markets.com، التي تتولى تشغيلها Finalto (جزر العذراء البريطانية) ذ.م.م. المحدودة ("Finalto BVI”) مرخصة من قبل لجنة الخدمات المالية في جزر العذراء البريطانية ("FSC") بموجب الترخيص رقم SIBA/L/14/1067.

FCA (المملكة المتحدة)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • تعويضات صندوق تعويضات الخدمات المالية تصل إلى 85000 جنيه إسترليني *بحسب المعايير والأهلية
  • تغطية تأمينية بقيمة 1000000 £**
  • حماية الرصيد السلبي

المنتجات

  • CFD
  • المراهنة على الهامش

Markets.com، التي تتولى تشغيلها Finalto Trading Limited مرخصة من قبل هيئة السلوك المالي ("FCA") بموجب الترخيص رقم 607305.

ASIC (أستراليا)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • التحقق الإلكتروني
  • حماية الرصيد السلبي
  • تغطية تأمينية بقيمة 1000000$**

المنتجات

  • CFD

Markets.com، التي تتولى تشغيلها Finalto (Australia) Pty Limited تحمل ترخيص هيئة الخدمات المالية الأسترالية رقم 424008، وهي مرخصة لتقديم الخدمات المالية من قبل هيئة الأوراق المالية والاستثمار الأسترالية ("ASIC”).

سيؤدي تحديد إحدى هذه الجهات التنظيمية إلى عرض المعلومات المتوافقة على نطاق الموقع الإلكتروني بأكمله. إذا أردت عرض معلومات عن جهة تنظيمية أخرى، الرجاء تحديدها. لمزيد من المعلومات، انقر هنا.

**تنطبق الأحكام والشروط. شاهد السياسة الكاملة لمزيد من المعلومات.

هل أنت تائه؟

لقد لاحظنا أنك على موقع في. وبما أنك تتواصل من موقع في الاتحاد الأوروبي، ينبغي عليك بالتالي النظر بإعادة الدخول إلى ، وهذا يخضع لإجراءات التدخل بالمنتجات للسلطة الأوروبية للسندات والأوراق. بينما يحق لك التصفح هنا بمبادرة حصرية منك، فإن عرض هذا الموقع لبلادك سيعرض المعلومات التشريعية المتوافقة وإجراءات الحماية المعنية للشركة التي تختارها. هل تود إعادة توجيهك إلى