The worst US stock selloff in half a century may not be over, some investors say, including Michael Wilson at Morgan Stanley. Most MLIV Pulse survey respondents think earnings forecasts will be slashed. Treasury holders are starting to bet a worsening economy will deliver some relief. Any recession may be long but modest, economists say, albeit not as bad as the GFC or the '80s. EMs are now ready for a US recession, and may even be able to lure investors.

Major banks are ratcheting up funds for the global commodities trade as Russia’s war in Ukraine drives up prices for everything from crude oil to corn.

Asian equities face another road block to a sustained rebound, with new orders on a downward track. The latest JPMorgan global PMI data shows the new orders component has dropped past the level seen in January 2020, just before Covid collapsed the index.

Germany’s foreign trade balance just came in at -1 billion euro. Which is the first negative print for that number since 1991.

The European Central Bank will “tilt” its corporate bond holdings toward issuers that demonstrate a “better climate performance,” marking its most significant shift yet to weave environmental considerations into monetary policy. 

China’s virus cases continued to climb over the weekend with hundreds of infections detected in Anhui province, where two counties were already in lockdown. The country reported 380 cases on Sunday, following 385 on Saturday. Infections have surged in recent days after holding below 50 for most of the previous two weeks.

The RBA is set to hike for a third month in July, adding 50 bps to bring the key rate to 1.35% and signaling more in coming months.

Joe Biden may announce a rollback of some US tariffs on Chinese consumer goods this week, along with a new probe into industrial subsidies that may lead to more duties in strategic areas like technology. Biden hasn't made a final decision and the timing may slip, people familiar said.

The base-case expectation isn’t for a recession in the US, a Goldman Sachs Group Inc. strategist said Monday.  Monetary tightening is likely to continue and there may be a “technical” recession, Gurpreet Gill, a macro strategist of global fixed income at Goldman Sachs Asset Management, told Bloomberg Television. That happens when there are two consecutive quarters of negative growth in real gross domestic product. 

Most Asian stocks rose Tuesday along with US equity futures amid speculation the Biden administration could scrap some Trump-era tariffs on Chinese consumer goods. Treasuries fell after reopening from a holiday.

Among the narratives that accompanied Bitcoin’s serial spikes to eye-watering heights the past decade was the idea that it and other crypto currencies offered an excellent hedge against inflation. That theme initially played out just fine as CPI rates soared earlier in 2021, but things changed as the year drew to a close. That was when the Fed dropped “transitory” from the lexicon and moved toward hiking interest rates.

China has largely escaped the crippling consumer inflation afflicting other major economies, but that may be starting to change as pork prices surge. The government has embarked on a campaign to rein in the market for pork, just as higher costs of its staple meat threaten to breach inflation targets and complicate efforts to stimulate growth. Hog futures in Dalian have risen to their strongest in a year, while wholesale meat prices are at a six-month high.

China is concerned about US economic sanctions and tariffs, Chinese Vice Premier Liu He told Treasury Secretary Janet Yellen Tuesday. The Chinese side expressed its interest in issues including the lifting of additional tariffs on China, sanctions by the US and fair treatment of Chinese enterprises, Liu said in the video call, according to a statement from China’s Ministry of Commerce. 

The US 2s10s curve has inverted again, highlighting the burgeoning concerns that too-high inflation and too-low growth will be the themes for the rest of 2022. There’s an air of caution across a number of Asian markets Tuesday, even as the risk-on narrative gets a bump from US-China talks and the Caixin PMI report.

The spike in US yields and related curve inversion is ruining the good mood in markets from earlier in the Asia session. The CSI 300 Index is down about 0.9%, having been up as much as 0.8% earlier. The Hang Seng Index has erased a 1.7% gain to trade close to flat.

RBA Raises Interest Rates in Quickest Tightening on Record. Australia’s central bank delivered its first ever consecutive half-percentage point interest-rate hike and committed to keep tightening monetary policy to quell accelerating inflation.

London’s property market is in flux with house prices continuing to rise and apartments declining in value. Apartments are down more than 11% from their peak in August 2020, with the median sale now less than 400,000 pounds.

A potential rollback of US tariffs on Chinese goods has been received with little applause by Chinese stocks, which have edged lower. Any lifting of tariffs isn’t viewed as a fork in the road. Granted, they won’t be read as bad news -- it is bringing a bit of a bounce to some textile stocks. But these old growth drivers are now so insignificant in a market obsessed with EVs, green stocks, biotech and consumption, that it’s barely making a blip on the radar.

함의: 관세장벽이 되돌려지는 업종이 흔히 생각하는 최근 성장동력을 가진 곳이 아님.

In a worrying sign for global equity bulls, semiconductor stocks are once more leading the market lower.
The MSCI AC World Semiconductor Index has fallen to its lowest since 2020 relative to the broader gauge, down close to 40% this year. Often seen as a leading indicator for the stock market, chipmakers were already under pressure to increase prices to counteract the rising costs of materials and logistics. But Micron Technology’s profit warning last week -- the largest US maker of memory semiconductors -- flagged demand is now cooling for chips used in computers and smartphones.

함의: 경기를 선행하는 반도체 업종에서 반전의 여지는 아직 없음.

In a recession scenario, oil may fall to $65/bbl by year-end, and potentially to $45/bbl by end-2023, Citi analysts including Francesco Martoccia and Ed Morse say in a July 5 note.

함의: 물가가 경기침체로 낮아지는 시나리오임.

I find it laughable that many people think yields have already peaked for this cycle. Yes, yes, I know policy operates with a lag, and a growth slowdown is coming, and that supply-side issues aren’t solved by higher rates. But, in response, inflation doesn’t come down through hope and optimism alone, the growth slowdown won’t be severe without radical tightening, and supply-side price pressures still lead to higher inflation expectations and hence a stickier long-term problem. So, what’s the risk that I’m wrong? It’s that there’s a deep global recession coming very soon that is far more horrible than I can envision. Either way, it’s going to get much worse for US stocks in the second half.

함의: 금리는 물가 대비 여전히 낮고, 기대만큼 물가가 빠르게 안정되긴 어려움. 한 가지, 급격한 경기침체를 제외하면, 두 가지 경우에서 주가는 공히 부정적임.