How to trade commodities

Commodities trading is a popular way to speculate on a wide number of different markets and assets. Here, we take a look at what it entails and how you can get started.

Commodities trading

What are commodities?

The term Commoditiesis a broad umbrella that covers many products that are pretty much essential to everyday living. In this case, it’s raw, naturally occurring materials that are then processed in thousands of different ways, before turning into products everyone uses in their daily lives.

Crude oil, metals, gold, crops, sugar and so on are all part of the commodities family. These raw ingredients are taken away and turned into food, energy, and clothing.

One thing that sets commodities apart from other tradeable products is pricing. There is a higher degree of standardisation on prices worldwide. It doesn’t matter who is producing the asset or material in question.

For instance, gold produced in a Russian gold mine or Brazilian gold mine would have the same price.

This does change from asset to asset, however. It’s not a hard or fast rule. For example, certain crude oil blends are priced differently using different benchmarks, such as Brent Crude or West Texas Intermediate (WTI).

Why do traders like commodities?

There are a number of reasons why traders like commodities.

  • Variety – With plenty of markets to choose from, traders can select to trade across a wide variety of markets.
  • Safe havens – Some commodities, like precious metals, are strong value stores. They retain their physical value – even in times of global economic turbulence.
  • Speculation potential – Prices of some commodities can be quite volatile. Just look at how oil has changed over 2020-2021 for instance. That means there is a lot of potential for high profits if you speculate correctly. However, this does mean you could lose more money too.
  • Hedging against inflation – Commodities’ value is not pegged to currencies. If a currency’s value falls due to inflation, then a commodity may hold its value in contrast. As such, many traders and investors use them to hedge against inflation.

Adding commodities to an investment or trading portfolio is also a great way to increase diversification. A diverse portfolio, in theory, is more insulated against the risks inherent to financial trading. If one instrument or asset, say equities, falls, then the commodities could help cover those losses.

What commodities can you trade?

We briefly touched on this earlier, but there are lots of different options available to would-be commodity traders.

Generally, commodities can be split into four categories:

  • Metals – This incorporates precious metals like gold and silver, as well as more common, industrial ores like iron, copper, nickel, and lithium.
  • Agricultural products – This category includes both edible and non-edible products. Wheat, grain, cocoa, and sugar are edible commodities. Cotton, palm oil, and rubber are examples non-edible commodities.
  • Energy – The energy market covers crude oil, gasoline, natural gas, coal, and heating oil. It also include renewable energy like wind power and solar.
  • Livestock – Cattle, hogs and other live animals fall under the livestock category.

What drives commodity markets?

Price action in commodities markets is defined by supply and demand. Generally, the higher the demand the higher the price and so on. Low supplies coupled with high demand can lead to high prices too.

We’ve seen this recently with oil markets. Crude oil output had been negatively affected by the COVID-19 pandemic. Demand was low and output was minimal. As of October 2021, demand is high, but output is being kept relatively scarce by producers such as the OPEC+ nations to protect prices.

However, commodities prices can be more versatile than other assets. This is because there are lots of factors at play relating to their production. For example, livestock levels may be impacted by health issues, such as foot and mouth disease. A bad harvest will impact wheat prices. Weather can affect production of commodities, such as a hurricane shutting down natural gas infrastructure in the Gulf of Mexico.

Global economic trends can affect prices too. China and India’s emergence as industrial powerhouses has caused the availability of metals like steel to drop off in other nations.

The above trends make commodities prices hard to predict. Prices can show high levels of volatility. As such, it can be seen as riskier than trading or investing in other assets. Remember: you should only invest or trade if you can afford to take any losses.

How are commodities traded?

Commodities are typically sold on exchanges, in the same way stocks are traded on exchanges. In fact, many would say the birth of trading as we know it started with 18th and 19th century merchants trading crops.

At Markets.com, we offer commodities trading through contracts for difference (CFDs). These allow you to speculate on commodity price movements without owning the underlying asset. These are leveraged products, which means you can take a position with only a fraction of the trade’s value. This means your profits can be amplified – but so can your losses.

There are also commodity exchange traded funds (ETFs). These group together a number of assets into a single basket. Some ETFs will hold the physical assets they’re cover, for example a gold ETF might hold a certain amount of bullion or coins. Some are more complicated and synthetically mimic their underlying market.

A Markets.com account will give you access to a wide range of commodity markets, as well as thousands other assets. Open yours today and start trading your way.

Mixed start for European equities ahead of NFP

Mixed start in Europe after another positive session on Wall Street as the US Senate approved raising the debt ceiling until December. Treasury yields are higher, with the 10yr hitting 1.6%, which may cool megacap tech’s recovery. All eyes today on the nonfarm payrolls report and what this means for the Fed and tapering. 

 

Whilst European bourses are mainly in the red the FTSE 100 is trying to break above 7,100, but as noted yesterday there is moving average congestion to clear out the way just underneath this and it’s still firmly within the range of the last 6 months. The S&P 500 was up 0.83% on Thursday and has now recovered a chunk of the Monday gap and is now just 3% or so off its all-time high. Momentum just flipping in favour of bulls (we note bullish MACD crossover for futures) – has the supply chain-stagflation worry peaked? Maybe, but rising rates could undermine the big weighted tech sector in the near-term and it is unclear whether there is enough appetite among investors to go more overweight cyclicals when the macro outlook still seems somewhat cloudy in terms of growth, policy and inflation. Next week is earnings season so we either get more bullish conference calls for the coming quarters or a bit of sandbagging re supply chain issues, inflation – for the index a lot will depend on whether the C-suite is confident or cautious about their outlooks.

 

Inflation nation: We can keep banging on about inflation, but it’s well understood now. Even the Bank of England has woken up – BoE chief economist Pill warned that inflation looks to be more persistent than originally anticipated. UK inflation expectations have hit 4% for the first time since 2008 – soaring gas and fuel bills not helping. “The rise in wholesale gas prices threatens to raise retail energy costs next year, sustaining CPI inflation rates above 4 per cent into 2022 second quarter.” said Pill. Tax hikes and labour shortages also featuring in the inflationary mix. There was a rumour doing the round yesterday that BoE’s Broadbent has «taken Nov off the table». However, with inflation racing higher it’s clear the Bank should be acting to hike in Nov to get ahead. Markets currently pricing a first 25bps rate hike fully by Feb 2022, another 70bps by the end of that year. 

 

Nonfarm payrolls watch: US employers are expected to have added 490k jobs in September, up from 235k in August, which was a big miss on the forecast. NFPs are important and could be market moving later since the Fed has explicitly tied tapering + subsequent rates lift-off to the labour market. A weak number could just dissuade the Fed from announcing its taper in Nov, but I see this as a low-risk outcome. More likely is steady progress on jobs (ADP was strong on Wed) and the November taper announcement to follow. The persistence of inflation and rising fuel costs in particular has changed the equation for the Fed entirely. Benign inflation that we were used to is no longer to be counted on to provide cover for trying to juice the labour market. The problem is not demand side, it’s supply side. Central banks are seeing rising inflationary pressures that are proving more persistent than thought. Slowing economic growth and risks to the outlook stem from the supply side not the demand side – so pumping the demand side even further into a supply side crisis is not helping matters much. 

Soaring energy prices driving stagflation fears, yields up, stocks down

Inflation/stagflation, supply chain problems, the US debt ceiling, an energy crisis as natural gas prices soar to new records in Europe and the UK, tighter monetary policy from central banks, worries about the Chinese property sector – all swirling around equity markets this week and not going away any time soon. Chiefly this morning we might say that rising Treasury yields and soaring energy prices are conspiring to knock risk appetite.  

 

European stock markets declined by around 1-2% in early trade on Wednesday despite something of a Tuesday turnaround for the US. The DAX tumbled 2% and under its 200-day moving average as German factory orders declined 7.7% in August amid supply chain problems, a sharp decline from the 4.9% increase in July. Although some of the decline could be a reaction to big jump in July, it’s nevertheless pointing to a slowdown in activity. Motor vehicles and parts were –12%. Meanwhile the British Chambers of Commerce released a survey showing UK companies are deeply worried about inflation and supply chain problems, and it warned that a period of stagflation may be coming. Boris Johnson is due to speak later but I cannot believe he will instil much confidence. The ‘everything is fine’ meme springs to mind… The FTSE 100 fell by more than 1% to under 7,000, though still within its 6-month range.

 

Wall Street rallied on Tuesday, reversing some of the Monday slip. Mega cap tech rose, whilst energy also rallied again on higher oil prices with WTI approaching $80. Henry Hub natural gas rose to just about its highest level in 13 years, with yesterday’s 9% gain seeing the US contract on the Nymex close at its highest since Dec 2008. Treasury yields are higher again, with 10s at 1.570%, the highest since mid-June.  Soaring energy prices are pushing up inflation expectations, pushing up yields and weighing on stocks. The dollar is bit stronger this morning with EURUSD taking a 15 handle again and cable under 1.36. US futures are weaker to the tune of 1%, indicating another rocky session on Wall Street with the S&P 500 ready to test the 4,300 area again.

 

Tesco shares rose over 4% in early trade after raising its full-year outlook on a profit beat and initiated a £500m share buyback programme. The company said it expects full-year adjusted operating profit of £2.5bn-£2.6bn, about a £100m ahead of analyst expectations, after H1 adjusted retail operating profit rose 16.6%. The strong retail showing reflected UK market outperformance and sharp recovery of Booker catering, management said. Shares in Sainsbury’s also climbed more than 1% despite a soft session for the FTSE 100. 

 

The Reserve Bank of New Zealand raised rates for the first time in seven years, hiking the main cash rate by 25bps to 0.5%. The central bank warned that cost pressures are becoming more persistent and that headline inflation would rise above 4% in the near term. But it was confident that current covid-19-related restrictions ‘have not materially changed the medium-term outlook for inflation and employment’ and that the ‘further removal of monetary policy stimulus is expected over time’. 

 

Oil prices keep on rising with front month WTI approaching $80. APi figures showed inventories increased by 950k barrels for the week ended Oct 1st, vs expectations for a draw of 300,000 barrels. There were also builds for stocks at Cushing, distillates and gasoline. EIA figs today expected to show a build of 0.8m barrels. Small inventory builds in the US won’t really change the narrative.

 

Finally, Deutsche Bank has a note out today warning about the impact of the shortages in the UK economy, which are beginning to ‘bite’ in the manufacturing sector – important for exports and therefore the currency. “In the medium-term, shortages in sectors like manufacturing should mean that UK suffer from a (relative) fall in output and have to be replaced by imports from abroad, weakening the current account and the pound,” they say. GBPUSD trades noticeably weaker today but it’s more a dollar move after a decent recovery over the last 4 sessions and with EURUSD also moving to its weakest since last July.

GBP USD Chart 06.10.2021

 

EURUSD Chart 06.10.2021

Manipulation continues to stoke the market

Yesterday I talked at length about the stock trading of Robert Kaplan, the head of the Dallas Fed, which obviously posed some questions about conflicts of interest. Now the quiet uproar this caused has forced Kaplan and his pal Eric Rosengren, the Boston Fed president, to do something. Both will sell all individual stock holdings by Sep 30th and reinvest in passive funds. “While my personal saving and investment transactions have complied with the Federal Reserve’s ethics rules, I have decided to address even the appearance of any conflict of interest by taking the following steps,” Rosengren said. Ok sure, but it just has a bad smell to it.

 

Stocks are nursing a slight bounce after a tough week, but the downside is open. The FTSE 100 found support at the 7,000 marker, testing its lowest in almost a month but holding the recent range for the time being. US markets were lower for a 4th straight day, the Dow Jones losing more than 150 points, the S&P 500 off by half of one percent and now a little over 1% below the all-time highs. A dovish European Central Bank has eased some concerns. 

 

The ECB did little to rock the boat, announcing a modest taper, but this was not exactly hawkish. PEPP will be conducted at a slightly slower pace, but this is all just tinkering at the edges.  Stocks found some bid, the euro also rose a touch but turned around – just a hint of noise, no new direction or anything to change the mind of any investors out there. Lagarde stressed it’s not a taper but ‘recalibration’ of PEPP.  

 

Message on rates clearly dovish and signalling they are going to look through ‘transitory’ spikes in inflation: “The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it sees inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realised progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at two per cent over the medium term. This may also imply a transitory period in which inflation is moderately above target.” 

 

Although inflation forecasts were revised higher, inflation in 2023 is still seen back down to 1.5% – so no signs of a rate hike in my lifetime…I reckon I could get round a table 8 times a year with my mates and say ‘shall we buy more bonds?’ and they would say ‘yeah, let’s buy more bonds’. It’s not monetary policy, it’s just outright repression, manipulation and ultimately a form of theft. 

 

And if you want to see what mega central bank action does – BofA reports today in their Flow Show that the annualized inflow to global stocks in 2021 of $1tn is greater than the cumulative inflow of prior 20 years ($0.8tn). 

 

Stagflation: UK economic growth slowed sharply in July – the reopening burst bust. Output rose by just 0.1% in July, missing expectations for +0.6% expansion.  

 

US initial jobless claims hit their lowest since the pandemic at 310k, whilst continuing claims also fell slightly. 

 

Oil weakened but then recovered some ground after China said it would auction off some state crude reserves to help refiners. WTI remains in a tight range as the market looks for fresh catalysts from the demand unknowns. Near-term downtrend remains in force.

Spot Oil Chart 10.09.2021

Adelanto semanal: los bancos centrales, los protagonistas

La semana que viene, el panorama estará dominado por las declaraciones de tres bancos centrales, empezando por el Banco Central Europeo (BCE). Su perspectiva moderada choca con la del Banco de la Reserva de Australia (RBA) y el Banco de Canadá (BOC), los cuales han adoptado un tono más conservador recientemente. No prevemos importantes cambios en las políticas, pero avistamos sorpresas en el horizonte económico.

La última vez que pudimos conocer el parecer del BCE fue con motivo de las actas de su reunión de julio. En un mundo en el que los bancos centrales empiezan a adoptar sesgos más conservadores, el BCE aún se mantiene relativamente moderado.

El BCE anunció su primera gran política financiera estratégica en julio. Los objetivos de inflación se revisaron para procurar no mantenerlos por debajo del 2 %. Para ello, adoptaron un objetivo de inflación general específico del 2 %. Desde entonces, la inflación en la zona euro ha aumentado a un máximo de 10 años del 3 %, lo que probablemente avive a los conservadores del Consejo de Gobierno del BCE.

Hasta aquí, todo bien, pero, ¿qué ha sido de la covid-19? La pandemia aún sigue coleando, pero algunos importantes miembros del consejo del BCE confían en que ni siquiera el efecto de la variante delta propiciará una recaída en Europa.

Se esperan pocos obstáculos en el camino; el sentimiento es positivo.

«Diría que, en general, nos encontramos cerca del punto que esperábamos alcanzar en junio para todo el año», declaró Philip Lane, economista jefe del BCE, a Reuters este miércoles. «Es un panorama razonablemente bien equilibrado».

Cabe señalar que el BCE ha afirmado que mantendrá un sesgo «persistentemente acomodaticio» en adelante. Los tipos de interés probablemente se mantengan en sus actuales e insólitos mínimos. No prevemos asistir a un cambio hacia una postura más conservadora a corto plazo.

Viajamos a Australia, donde el RBA se ha mostrado bastante optimista en sus últimos comunicados. El RBA anunciará su nueva declaración de tipos el martes por la mañana y no prevemos que el banco se vaya a desviar de su rumbo actual.

Dicho esto, la reducción de su programa de compra de bonos continuará para disminuirlo a partir de septiembre. Los tipos probablemente también se encuentren en mínimos. No esperamos que suban, como pronto, hasta finales de 2022.

Casi todo depende de cuán firme sea el rumbo que tome la economía australiana al avista del aumento de los casos de coronavirus y los confinamientos de zonas aisladas.

«El consejo esta preparado para responder si aumentan las malas noticias en el frente sanitario, en caso de que eso dé lugar a un revés aún mayor para la recuperación económica», declaró el RBA en su acta de la reunión de agosto. «A día de hoy, la experiencia dicta que, cuando se contienen los rebrotes del virus, la economía se recupera rápidamente».

El gobernador Lowe y compañía han afirmado que no es probable que se produzca una rescisión, aunque las perspectivas de crecimiento se han revisado para este año: el RBA prevé que el crecimiento anual en 2021 ronde el 4 % —una previsión inferior al 4,75 % pronosticado en un primer momento—, pero aumentará al 4,25 % a finales de 2022.

El broche final al festival de declaraciones de bancos centrales lo pondrá el BOC, uno de los bancos centrales más conservadores del mundo, que no ha tardado en reducir su programa de compra de bonos, aunque mantiene su tipo a un día en el 0,25 %.

El BOC sí que señaló que una nueva ola de casos y confinamientos en el 2T inhibiría el crecimiento, pero se mostró seguro de que el crecimiento retornaría rápidamente a finales de año.

El banco central afirmó que, actualmente, el crecimiento previsto para la economía canadiense es del 6,0 % en 2021, una previsión menor que la de abril del 6,5 %. No obstante, revisó al alza su previsión de crecimiento para 2022 del 3,7 % al 4,6 %.

El crecimiento de la inflación sigue descontrolado: se espera que alcance o incluso supere el 3 % hasta 2022. La inflación no tiene freno y se sitúa en la parte alta del rango del BOC de entre un 1 % y un 3 %. No obstante, el banco considera que todo esto es transitorio, por lo que es probable que provoque un cambio de perspectiva en su política.

Principales datos económicos

Date  Time (GMT+1)  Asset  Event 
Tue 7-Sep  5.30am  AUD  RBA Rate Statement 
  5.30am  AUD  Cash Rate 
  10.00am  EUR  ZEW Economic Sentiment 
  10.00am  EUR  German ZEW Economic Sentiment 
       
Wed 8-Sep  3.00pm  CAD  BOC Rate Statement 
  3.00pm  CAD  Ivey PMI 
  3.00pm  CAD  Overnight Rate 
  Tentative  CAD  BOC Press Conference 
       
Thu 9-Sep  12.45pm  EUR  Monetary Policy Statement 
  12.45pm  EUR  Main Referencing Rate 
  1.30pm  EUR  ECB Press Conference 
  1.30pm  USD  Unemployment Claims 
  3.30pm  GAS  US Natural Gas Inventories 
  4.00pm  OIL  US Crude Oil Inventories 
       
Fri 10-Sep  1.30pm  CAD  Employment Change 
  1.30pm  CAD  Unemployment Rate 
  1.30pm  USD  PPI m/m 
  1.30pm  USD  Core PPI m/m 
  Tentative  GBP  Monetary Policy Hearings 

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.

 

Adelanto semanal: todas las miradas pendientes del informe laboral de EE. UU.

La semana entrante no será ociosa para los mercados: marcado en rojo en la agenda están las nóminas no agrícolas de EE. UU., así como las declaraciones de dos importantes bancos centrales.

Empecemos con la última publicación de las nóminas no agrícolas estadounidenses.

En junio, estos datos superaron por mucho las expectativas, por lo que los mercados estarán más atentos que nunca cuando salgan a la luz el viernes.

El mes pasado, se crearon 850 000 puestos de trabajo en la economía estadounidense, un dato muy superior a los 720 000 previstos. Asimismo, junio fue el sexto mes consecutivo de creación de puestos de trabajo.

Sin embargo, la tasa de desempleo ascendió del 5,8 % al 5,9 %, cuando las previsiones apuntaban a una caída hasta el 5,6%. La tasa de actividad, el parámetro de cabecera para medir la escasez de mano de obra en todo el país, se mantuvo en el 61,6 %.

En general, parece que las contrataciones han caído ligeramente durante la primavera y se debe a varios motivos: los temores por el virus, los costes derivados del cuidado de niños, mejores seguros por desempleo, y los planes de estímulo y de regulación de empleo temporal. Sin embargo, se ha constatado que algunas empresas han aumentado los salarios de sus empleados para incentivarlos a que ocupen nuevos puestos.

La tasa de empleo también constituye un parámetro importante para el Presidente de la Fed, Jerome Powell, a la hora de evaluar los niveles de estímulo y soporte a la economía del país.

Ya sabemos que Powell y compañía se muestran relativamente cómodos con dejar que la economía siga creciendo a este ritmo, aun a pesar de la creciente inflación. Como apuntó Powell en la última reunión de la Fed, aún se deben crear otros 7,5 millones de puestos de trabajo en EE. UU., aunque algunos informes sugieren que esta cifra es de 6,8 millones. Hasta que no se alcance este hito, se espera más estímulo y soporte económico de la Fed.

En el ámbito de los índices, el S&P 500 y el Nasdaq respondieron con nuevos máximos históricos a los buenos datos del informe laboral del mes pasado. Los operadores de índices albergarán esperanzas a que ocurra algo similar con los datos de julio.

Seguimos con los datos relativos a EE. UU.: el ISM, uno de los principales emisores de informes del índice de gestores de compras (PMI) en EE. UU., dará a conocer sus perspectivas sobre el sector servicios y el manufacturero esta semana.

Según el informe sobre el PMI del ISM, el sector manufacturero de EE. UU. se mantuvo firme el mes pasado, aunque los problemas en la cadena de suministro siguen reprimiendo el crecimiento. El PMI manufacturero fue de 60,6 puntos, inferior a los 61,2 puntos de mayo.

El impulso sigue siendo fuerte: cuatro de los cinco subíndices calculados por el ISM mostraron un crecimiento elevado. A pesar del aumento de precios, el interés de los consumidores por nuevos productos sigue siendo alto. Sin embargo, la falta de mano de obra, junto con el aumento de los precios en materias primas y materiales, se ha traducido en estancamientos y escasez mientras los fabricantes tienen dificultades para satisfacer la demanda.

«Tiempos de entrega de materias primas prolongados nunca vistos, escasez a gran escala de materiales básicos esenciales, aumento en los precios de materias primas y dificultades en el transporte de productos son factores que continúan afectando a todos los segmentos de la economía manufacturera», sentenció Timothy Fiore, presidente del Comité de estudios de empresas manufactureras del ISM.

Lo mismo se aplica al sector servicios: creció en junio, pero a un ritmo mucho menor que en mayo, cuando alcanzó cotas nunca vistas. En este caso, el índice cayó de 63,5 a 60,1 puntos.

«La tasa de crecimiento en el sector servicios se mantiene sólida, a pesar de su moderada contracción con respecto al máximo histórico del mes anterior», explicó Anthony Nieves, presidente del Comité de estudios de empresas de servicios, quien concluye: «Los problemas con la escasez de materiales, la inflación, la logística, y los recursos laborales siguen obstaculizando las condiciones comerciales».

Mantener ese impulso es la máxima prioridad para garantizar la salud económica de EE. UU., sobre todo porque se espera que el país sea el motor que impulse la recuperación económica mundial a partir de este año.

Dejamos atrás los datos para abordar las declaraciones que ofrecerán dos bancos centrales la próxima semana.

Empezamos con el Banco de Inglaterra (BoE), cuyo principal tema de interés es el aumento de la inflación.

En junio, la inflación alcanzó el 2,5 %, debido al aumento generalizado en los precios de los bienes de consumo. Esto podría justificarse por que la demanda contenida en la economía británica por fin se desató. Sin embargo, actualmente, la inflación se encuentra en su nivel más alto en tres años, algo que inquieta a los economistas.

El gobernador Bailey ya ha dejado claro cuál es su postura: los aumentos de precio son temporales y podrían alcanzar el 3 % para finales de año. A partir de entonces, deberían retroceder a niveles razonables. Actualmente, la misión del BoE es dirigir la inflación al 2 % y mantenerla a ese nivel.

Sin embargo, Bailey ha afirmado que subiría los tipos si la inflación se descontrola.

El Banco de la Reserva de Australia (RBA) también dará a conocer su última valoración de la política y su rumbo de acción esta semana.

Todo apunta a que no se anunciarán cambios importantes. El gobernador Philip Lowe lo ha dejado muy claro: no se subirán los tipos hasta, por lo menos, 2024, a pesar de los sólidos indicadores económicos fundamentales del país.

El mínimo histórico del 0,1 % del tipo de efectivo se mantendrá en ese nivel. Sin embargo, en la reunión de julio se abordaron algunos ajustes en el programa de compra de bonos de Australia. La escala de las compras se ha reducido: a partir de septiembre, incluido, el ritmo de compra de bonos del RBA pasará de 5000 millones a 4000 millones de AUD a la semana.

Lowe ha sentado las bases para más cambios en esta política. Veremos qué más cambios a pequeña escala deparará la reunión de esta semana.

Por último, pero no por ello menos importante, repasaremos las novedades de la temporada de ganancias en EE. UU.

La tercera semana de informes de resultados del 2T de 2021 de empresas de gran capitalización dará comienzo el lunes. En comparación con la vorágine de informes de la semana pasada, esta será una semana con un ritmo más pausado en la que saldrán a luz los resultados de algunas empresas importantes, como Alibaba o Uber.

A continuación, encontrará más información sobre las grandes empresas que publicarán sus resultados esta semana, aunque también puede consultar nuestro calendario de resultados en EE. UU.

Principales datos económicos

Date Time (GMT+1) Asset Event
Mon 2-Aug 8.55am EUR German Final Manufacturing PMI
  3.00pm USD US ISM Manufacturing PMI
 
Tue 3-Aug 5.30am AUD RBA Rate Statement
  5.30am AUD Cash Statement
  11.45pm NZD Employment Change q/q
  11.45pm NZD Unemployment Rate
 
Wed 4-Aug 2.30am AUD Retail Sales m/m
  1.15pm USD ADP Nonfarm Employment Change
  3.00pm USD US ISM Services PMI
  3.30pm OIL US Crude Oil Inventories
 
Thu 5-Aug 12.00pm GBP Asset Purchase Facility
  12.00pm GBP BOE Monetary Policy Report
  12.00pm GBP MPC Asset Purchase Facility Votes
  12.00pm GBP Monetary Policy Summary
  12.00pm GBP MPC Official Bank Rate Votes
  12.00pm GBP Official Bank Rate
  3.30pm GAS US Natural Gas Inventories
 
Fri 6-Aug 2.30am AUD RBA Monetary Policy Statement
  1.30pm CAD Employment Change
  1.30pm CAD Unemployment Rate
  1.30pm USD Average Hourly Earnings q/q
  1.30pm USD Nonfarm Employment Change
  1.30pm USD Unemployment Rate

 

Principales informes de resultados

Mon 2 Aug Tue 3 Aug Wed 4 Aug Thu 5 Aug
Arista Networks Alibaba General Motors Ball Corp
Activision Blizzard The Kraft Heinz Co Beyond Meat
Roku Inc Illumina
Uber Technologies Square Inc
The Trade Desk
Virgin Galactic Holdings

Earnings season: Another record-breaking quarter for Apple

Apple smashes yet another quarterly earnings season – but the stock price takes a hit.

Apple earnings

Apple’s headline stats

Apple beats Wall Street expectations once again. This was its strongest June quarter report on record, with sales of all major Apple product lines up 12% across the board.

Overall revenues were up 36% year-on-year for a total of $81.41 billion. When broken into key categories, Apple’s latest quarterly revenues look something like this:

  • Total Revenue – $81.41 billion – 36% y-o-y growth
  • iPhone revenue – $39.57 billion – 49.78% y-o-y growth
  • Services revenue – $17.48 billion – 33% y-o-y growth
  • Other Products revenue – $8.76 billion – 40% y-o-y growth
  • Mac revenue – $8.24 billion – 16% y-o-y growth
  • iPad revenue – $7.37 billion – 12% y-o-y growth
  • Gross margin – 43.3% y-o-y growth

It’s of course iPhones that represent the largest chunk of Apple’s quarterly revenues. The California brand launched its latest iteration in October last year. Since then, it’s place as the centrepiece in the Apple crown has gone undisputed.

As we can see from the above, other Apple products, including Macs and iPads, also remain extremely popular with consumers.

“Our record June quarter operating performance included new revenue records in each of our geographic segments, double-digit growth in each of our product categories, and a new all-time high for our installed base of active devices,” said Luca Maestri, Apple’s CFO, in a statement released on Tuesday.

“We generated $21 billion of operating cash flow, returned nearly $29 billion to our shareholders during the quarter, and continued to make significant investments across our business to support our long-term growth plans.”

In terms of guidance, Maestri said the company is forecasting double-digit year-on-year growth into the next quarter, although this is expected to slow in September.

Apple stock still takes a knock

Despite these huge gains, Apple shares reacted poorly to Maestri’s September forecasts. The stock fell 2% after the announcement and is currently trading down roughly 0.7%.

This comes even after earnings per share rose from the estimated $1.01 to $1.30.

So, why the dip? It’s the same thing that affected Tesla this year, and indeed most tech companies involved in physical hardware: supply side issues.

There is currently a global chip shortage. A shortage of silicon used to manufacturer chipsets necessary for building Apple products has caused supply and manufacturing issues. The most affect products were Macs and iPads, which use “legacy nodes”, i.e., older chip models, unlike the iPhone which runs on more current chipsets.

“We had predicted the shortages to total $3 to $4 billion,” Apple CEO Tim Cook told CNBC. “But we were actually able to mitigate some of that, and we came in at the lower than the low end part of that range.”

The drop in Apple share price may then have been caused by consternation around the coming quarters’ performance until the end of 2021. Will supply shortages stymie growth? Likely so, but Apple has proven it can mitigate these and still come out on top. However, it’s how much growth slows across the rest of the year, if it does, that may have caused concern for investors.

Apple analyst sentiment

Even with stock down, sentiment appears to be fairly strong. According to the Analyst consensus tool on the Marketsx platform, Apple holds a buy rating according to 25 market observers’ opinions:

Analyst consensus for Apple on 28.07.2021.

Sentiment is also veering towards the bullish:

Apple news sentiment for 28.07.2021.

So, another massive quarter for the world’s foremost tech brand. Now, it’s up to Cook, Maestri and the rest of the team to navigate Apple through a world where commodities and raw materials are in short supply. Can it deliver? Watch this space.

To see which large caps are still due to report on Wall Street this season, make sure you check out our earnings calendar.

What do analysts say are the best investment bank stocks?

Banks have enjoyed a rollicking recovery since the depths of the pandemic in March 2020. The XLF financials ETF has more than doubled since it struck a multi-year low over a year ago. A strong monetary and fiscal response from governments and central banks and a strong trading performance sparked the first phase of the recovery, whilst powerful economic growth and rising bond yields has helped the sector continue to gain.  

 

But among the major financial stocks, there are some top picks in the investment banking arena from JPMorgan that are worth a look. “The Investment Banking (IB) industry, in our view, is in a much better shape today compared to where it has ever been,” analysts from the bank said in a note. IBs operate a lower risk model as they become less capital-intensive,  revenue streams are more sustainable, barriers to entry remain high and they have an increasing share of so-called ‘captive’ wealth management. 

 

Here are JPM’s top investment bank picks and what other analysts say

 

In the global investment banking space, Goldman Sachs takes the top spot. “We see GS as a contender given its agile culture, which allows it to move as a Fintech, and its strong IT platform to retain its strong market share growth momentum from Tier II players,” the JPM team says.

Goldman also gets a buy rating on our Analyst Recommendations tool.

Goldman Sachs investment analysis rating.

In Europe, Barclays is the number one pick, with the analysts describing the UK-listed stock as “a relative winner with its transaction bank providing an advantage along with its diversified IB revenue mix”. UBS comes in second and Deutsche Bank also gets a nod. The German bank also received an upgrade from Kepler Capital.

Barclays investment analysis.

Cryptocurrency update: Bitcoin breaks $61,000, Tesla & BTC, and NFTs, NFTs, NFTs

Another week, another BTC high, which looks like good news for Elon Musk and Tesla. Elsewhere, NFT fever sweeps across cryptos, but will that affect prices?

Cryptocurrency update

Bitcoin new record high

Bitcoin spiked on Saturday 13th March, crossing the $60,000 barrier for the first time, and reaching above $61,500 before pulling back.

At the time of writing, Bitcoin futures were trading back around $55,000.

So, what was behind this fresh Bitcoin rocket ride? It’s our old friend institutional support. Chinese software firm Meitu is the latest in a long line of companies snapping up digital tokens for their treasuries and putting support on BTC prices.

Meitu has picked up $17.9m in Bitcoin but also bought $22m of Ether in the same transaction, which is fairly interesting – most probably because Ether is cheaper per-unit than Bitcoin, but still has a lot of institutional interest.

JPMorgan has also stated it’s launching a structured investment product featuring indirect exposure to cryptocurrency markets for its clients by the end of March. The investment bank’s structured debt product will maintain stock holdings in companies that have their own exposure to BTC. Retail and institutional investors would then have the opportunity to buy into the debt issuance with a minimum investment of $1,000 without direct BTC exposure.

There’s a long, long list of supporters of BTC has it continues to shift from outsider alternative currency to mainstream token. JPMorgan and Meitu are the latest names to join it, while Deutsche Bank and others have been there for a couple of months now.

Another factor that could be playing into a new BTC rally is Joe Biden’s mega stimulus package. $1.9 trillion in extra stimulus is coming to the US economy with $1,400 going to US citizens. Could some of that be pumped into retail cryptocurrency investment?

At its highest, Bitcoin’s market cap reached $1.14 trillion – more than the entire GDP of Indonesia or Mexico. Volatility is the fundamental characteristic of Bitcoin, however. After its most recent rally, when it smashed through the $50,000 barrier, BTC retracted down to $33,000 before rising again. It’s a heady rollercoaster ride, but one that encourages shorting. Some sort of stability would be nice.

While institutions are jumping aboard the Bitcoin/crypto train, regulatory reform is in the break car, desperately trying to put a slowdown on the market before investors go off the tracks. India, for instance, is proposing a strict cryptocurrency ban, wanting to prohibit “possession, issuance, mining, trading and transferring crypto-assets”, according to Reuters.

This regulatory tug of war will be ongoing, but it doesn’t really seem like it’s going to slow BTC volatility in the short-term.

Tesla makes big BTC profit

The shadow of Elon Musk looms large over the cryptocurrency world. The man with the itchy Twitter finger’s influence on price movements and crypto legitimacy has been seemingly all pervasive in recent months. When news came his carmaker Tesla had sunk $1.5bn in BTC in its last financial update at the start of February, it caused a stir. Is that a smart move for a EV manufacturer to be exploring? Apparently so.

With BTC breaking over $61,000, Tesla’s move to fill its coffers with digital coinage looked like a good one.  At that high, Tesla was up $1.2bn on its BTC trade.

Companies storing spare cash in securities like Treasury bills is nothing new. But Treasury bills are usually nowhere near as volatile as cryptocurrencies. It’s hard to argue with the results, but there are some lingering questions.

The $1.2bn crypto profit is more than Tesla has made from selling cars across the last decade, nominally the core mission of Tesla as a company. Of course, launching a new car marque into a congest marketplace takes massive overheads. You’ve got spend money to make money (and cars), but the ratio of investment to profit from digital tokens Tesla just showed versus its central business function is an interesting one.

Will Tesla move more of its capital into digital currencies? How will this affect its core business? What will the market think?

Tesla’s shares dropped by 20% after its BTC play was revealed, falling from $863 per share to around $694 at current levels, suggesting it doesn’t think too kindly on Tesla doing this. Musk has essentially tied Tesla and BTC together at the hip with such a move, which may have caused investors to question Tesla’s ongoing growth strategy.

In the short-term, it has paid off, but is it really sustainable for Tesla to pour money into BTC – especially with rivals like Lucid Motors gaining traction, and legacy car manufacturers making in roads into the EV segment. It’s one to watch for the future.

Could NFT upswing lead to higher crypto prices?

NFTs are getting more headlines recently, following a $69m purchase of a digital graphic from Designer Mike Winkleman, aka Beeple, by the pseudonymous founder of NFT-fund MetaPurse MetaKovan.

An NFT is a non-fungible token, a not-so-sexy name for assets sold on blockchains. This includes artwork, music, digital collectibles, virtual items for video games like weapons or skins, and even tokenised real-world assets like designer trainers, cars and property.

Everyone is getting in the act with Kings of Leon releasing their latest album via NFTs and Elon Musk’s (who else?) Wife Grimes selling $6m worth of artworks on blockchains via NFTs.

Non-fungible tokens are bought with cryptocurrency. For instance, MetaKovan picked up Beeple’s “Everdays” with $69m worth of ETH.

NFTs are valuable because they prove an artwork’s scarcity. “Everdays” is a one-off, thus its value was huge – although that is partly tied into a broader discussion on the value of art, which we won’t dive into here.

Depending on the type of NFT sold, the purchaser would become the sole owner. So, using “Everdays” as an example, MetaKovan is that artwork’s sole owner.

In the case of the Kings of Leon release, buying it as an NFT would mean you own a digital copy of the album, like you would if you were to buy it off iTunes or pick up a physical copy.

CySEC (UE)

  • Los fondos de los clientes se conservan en cuentas bancarias separadas
  • Programa de Indemnización (FSCS) de hasta 20.000 EUR
  • Cobertura del seguro de 1.000.000€**
  • Protección de saldo negativo

Productos

  • Las operaciones con pares de divisas y CFD conllevan un gran riesgo de sufrir pérdidas
  • Gestión de acciones
  • Quantranks

Markets.com está administrada por Safecap Investments Limited. Autorizada por la CySEC con número de licencia 092/08 y por la FSCA con número de licencia 43906.

FSC (RESTO DEL MUNDO)

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  • Verificación electrónica
  • Protección de saldo negativo
  • Cobertura del seguro de 1.000.000$**

Productos

  • Las operaciones con pares de divisas y CFD conllevan un gran riesgo de sufrir pérdidas
  • Creador de estrategias

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FCA (Reino Unido)

  • Los fondos de los clientes se conservan en cuentas bancarias separadas
  • Programa de Indemnización para los Inversores (ICF) de hasta 85.000 GBP
    * en función e los criterios y la idoneidad
  • Cobertura del seguro de 1.000.000£**
  • Protección de saldo negativo

Productos

  • Las operaciones con pares de divisas y CFD conllevan un gran riesgo de sufrir pérdidas
  • Cotizaciones de spread
  • Creador de estrategias

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Productos

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Markets.com, administrada por Finalto (Australia) Pty Limited. Tiene el número de Licencia de Servicios Financieros Australianos 424008 y está autorizada para prestar servicios financieros por la comisión del Mercado de Valores de Australia («ASIC”).

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