IMF Cuts World GDP Outlook a Third Time as Inflation. The International Monetary Fund cut its global growth outlook for this year and next, warning that the world economy may soon be on the cusp of an outright recession. Global economic expansion will likely slow to 3.2% this year, less than the 3.6% forecast by the fund in April and the 4.4% seen in January, the IMF said in an update to its World Economic Outlook released Tuesday. 

함의: 경제성장률 하향을 여러 번 하게됨.

The Kremlin is likely to keep vital gas flows to Europe at minimal levels as long as the standoff over Ukraine continues, ratcheting up the pressure on the European Union over its tough stance on Russia’s invasion, according to people familiar with the leadership’s thinking. If the squeeze drags into the winter, it could leave the continent, traditionally Russia’s largest export market, desperately short of the fuel.

함의: 러시아는 우크라이나 침공에 맞서는 유럽을 에너지를 볼모로 계속 위협할 것임.

The major 10 am US data releases disappointed expectations, with consumer confidence printing 95.7 versus an expected 97.0. The labor differential edged a little lower, from 39.9 to 37.8, but remains very high by the standards of history. Clearly inflation is impacting consumers’ sense of well-being, which doesn’t exactly argue for the Fed standing down, does it? New home sales, meanwhile, were just 590k on an annualized basis, well below the 655k forecast and the lowest since April 2020. Moreover, the prior month’s data was revised sharply lower, from 696k to 642k. New home supply actually didn’t rise that much -- from 447k to 457k, and interestingly the median price dropped from 444k to 402k, though the figures are not seasonally-adjusted.

함의: 모든 지표가 쇼크를 기록함.

Reports from consumer-facing companies so far show a gulf between the spending patterns of the affluent and those with less income. The former have been remarkably resilient, signaling there’s support for the US economy, which may ultimately boost equities. The big news came from Walmart -- which leads S&P 500 decliners with an ~8% plunge in early trading -- with a warning that will make retailers nervous, as my colleague Heather Burke writes. But we’ve known for months that both Walmart and Target have been saddled with bloated inventories. Meanwhile, a host of other companies are showing consumers have been willing and able to swallow higher prices, from Unilever to Coca-Cola (with an “absolute blockbuster” quarter) to McDonald’s. Appliance maker Whirlpool said long-term demand fundamentals remained strong. While homebuilders say there’s been a slowdown in demand, home prices continued to climb in May.

함의: 소비재 기업들의 실적을 통해 부유한 소비자와 빈곤한 소비자 간의 격차가 커지고 있다는 것과, 부유한 소비자의 지불용의가격은 충분히 높은 수준에 있다는 것을 알 수 있음.

We had noted in our Q2 earnings preview last week that the season was likely to deliver weak earnings but that this was widely expected, and that low equity positioning going in could see a stronger than usual earnings season rally. The early phase of the earnings season so far has followed this noscript closely. Our measure of aggregate equity positioning has over the last one month edged up from the bottom of its post-GFC band, with positioning for both discretionary and systematic strategies rising modestly. The move up in equities and positioning over the last five weeks has been accompanied by a sharp rally in heavily shorted stocks. Since their very unusual surge in 2020 into early-2021 fizzled out, heavily shorted stocks have over the last 18 months underperformed in a clear down channel, catching back down to the longer-run trend of underperformance, but punctuated by sharp short-lived rallies. The recent rally has again taken shorted stocks from the bottom to the top of the down channel.

보고서: 실적 시즌이 시작되며 예상되었던 부진에 되려 공매도가 가득 쌓였던 주식 위주로 상승하면서 이들의 가격이 하락 추세의 밴드 상단에 위치하게 됨. (Deutsche Bank - Another Short Story)

Macro hedge fund EDL Capital is betting that the euro will plunge to levels not seen since the early days of its inception over 20 years ago, as rampant inflation feeds instability in politics and bond markets that could test the region’s cohesion. That could cause the start of a “euro bear market” in a shift from the current bout of dollar strength that’s weakened the common currency, said Edouard de Langlade, the founder of EDL. He argues Russian gas supply risks will drive up record inflation, forcing aggressive rate hikes at a time of recession and causing Germany to potentially baulk at the costs of keeping the euro zone together. “Europe is on the brink of disaster, which could potentially lead to its breakup,” de Langlade told clients in a letter this month seen by Bloomberg. “We could move to a place where the dollar is not strong against everything but the euro gets weak against everything,” he said, targeting the euro at 80 US cents. The money manager, who runs $751 million at his macro hedge fund, is known for his big and bold bets.

함의: 기록적인 인플레이션과 경기침체가 유럽의 분열을 만들면서 유로화가 모든 통화 대비 약세를 보일 것, 이 때문에 1유로가 80센트의 가치까지 하락하는데 베팅함.

LVMH sales jumped in the second quarter as the owner of Louis Vuitton bags and Dom Perignon Champagne continued to thrive despite lockdowns in China and soaring inflation. Organic revenue in the French company’s key fashion and leather goods unit soared 19%, compared with estimates of a 17% rise, according to analysts surveyed by Bloomberg. In addition to Louis Vuitton, brands such as Fendi, Dior and Celine helped drive the uplift, the company said in a statement Tuesday. The world’s largest seller of luxury goods followed Richemont and Burberry Group Plc in posting results that show the appetite for luxury goods remains even as prices increase, the global economic outlook deteriorates, and China continues to pursue its Covid-zero policy.

함의: 사치재를 소비하는 층은 현재의 거시경제나 정책 변수에 영향받지 않으며, 가격 비탄력적인 강한 수요가 이어짐.

Alphabet beat, with Google's ad revenue — which outperformed — nowhere near as battered as Snap's last week. Microsoft's quarterly revenue missed, held back by the stronger dollar and weaker corporate demand for cloud services and software.

President Joe Biden will speak with Chinese leader Xi Jinping on Thursday amid fresh tensions over Taiwan, according to people familiar with the matter. The first conversation between the two presidents since March will take place at a particularly difficult juncture for US-China ties: House Speaker Nancy Pelosi’s staff and security officials aren’t ruling out plans for her to visit Taiwan in early August. Chinese Foreign Ministry spokesman Zhao Lijian said Monday that Beijing was getting “seriously prepared” for the possibility that Pelosi could visit the the self-governing island, which China considers part of its territory. US Ambassador to China Nicholas Burns said in June that relations with China have deteriorated to probably “the lowest moment” since diplomatic relations resumed in 1972. Biden, who is recovering from the coronavirus at the White House, also is considering whether to lift some tariffs on Chinese imports in a bid to stem rampant inflation.

함의: 하원의장의 대만 방문 계획으로 갈등은 더 깊어지며 1972년 수교 이후 최악의 관계로 치닫은 상황에서 두 지도자의 회담이 열릴 것으로 예상됨.

There is so much cash sloshing around inside China’s banking system and so little demand for loans that banks are lending each other record amounts of money even as returns shrink, suggesting it will be hard for more monetary stimulus to boost an economy facing a lack of demand, not a lack of cash. The amount of money being lent in the overnight repo market hit a record 6.1 trillion yuan ($902 billion) last Friday and continued near that level this week, while the cost to borrow in that market has fallen 91 basis points this month to just above 1%, the lowest since January 2021. The willingness of banks to lend more and more to each other even as their returns fall signals that they can’t find any more profitable ways to use their money. “Excess cash is piling up in the financial system instead of being funneled to the real economy,” said Ming Ming, chief economist at Citic Securities. The risk of a liquidity trap -- a situation where monetary easing is unable to boost demand -- is rising, he said, adding that the demand for loans likely slowed in July from June amid scattered Covid outbreaks. 

함의: 중국이 부양을 위해 유동성을 풀어도 그것이 실물경제가 아닌 금융 시스템 안에 고이는 유동성 함정에 빠질 위험에 있다고 경고함.

Asia liquefied natural gas prices surged to the highest level since the war in Ukraine began as Russia’s move to curb supply to Europe boosts global competition for fuel. The Japan-Korea Marker, the spot LNG benchmark for North Asia, surged above $45 per million British thermal units on Tuesday, the highest since early March, according to S&P Global. Buyers in Japan and South Korea are rushing to secure shipments of the power plant and heating fuel to refill inventories for winter. Russia will tighten its grip on pipeline gas flows to Europe this week, deepening a supply crunch that is reverberating around the world. Europe is buying more LNG to replace Russian gas, putting the continent in direct competition with Asia for a shrinking pool of available shipments of the super-chilled fuel.

함의: 한국과 일본 바이어가 겨울을 대비하여 재고 확보를 시작함에 따라 아시아 가스 가격이 상승하기 시작함.

A district on the outskirts of Wuhan has been locked down, the first time the Chinese city that saw the world’s first Covid-19 lockdown has imposed such a measure since 2020, underscoring how far the country is from post-pandemic normalcy. More than two years since the city was sealed off to contain what was then a mysterious pneumonia, almost 1 million residents of Wuhan’s Jiangxia district have been told to stay in their homes and not go out unless necessary. All public transport has been stopped and entertainment venues shut for three days after four asymptomatic cases were found in the district on Tuesday. While so far the restrictions are contained to just the one district, the move is likely to spark concerns about a widening of curbs. Life in the pandemic-scarred city of 11 million people had largely returned to normal since its initial lockdown in 2020 -- which set a precedent for how Chinese authorities would handle flare ups in other parts of the country -- with a small outbreak in April and a handful of cases in the past month. 

함의: 우한에서 4명의 무증상 바이러스 감염환자 발견 뒤 110만명 인구의 강하(江夏) 지역은 대중교통과 오락시설을 포함한 제한조치가 발표되었고, 추가 지역 제한 확대의 우려도 존재함.

South Korean chipmaker SK Hynix Inc. warned of waning memory growth and rising inventories, becoming the latest tech giant to sound the alarm over global economic uncertainty. The downbeat sentiment came after the Apple Inc. supplier logged a 56% jump in second-quarter profit on resilient demand and a weak Korean won on Wednesday. But executives said they see a slowdown in demand from its main growth engines of PCs, smartphones and servers. Recession concerns are prompting businesses to tighten costs, Chief Marketing Officer Kevin Noh said at a post-earnings news conference, adding that chip shipment growth forecasts for the current quarter have to be revised down. 

함의: SK하이닉스는 성장은 둔화되고 재고는 증가하는 불확실성을 이전 대형 기술 기업과 동일하게 언급했고, PC, 스마트폰, 서버와 같은 핵심 성장 엔진부터 식어가고 있다고 함.

Mercedes-Benz AG increased its outlook on the back of strong vehicle prices and model mix even as the luxury carmaker warned of economic turbulence due to Europe’s worsening energy crisis, high inflation and protracted supply-chain problems. The world’s biggest luxury-car maker now expects group profit to be slightly higher than last year, rather than unchanged, while returns from carmaking are seen at between 12% to 14%, slightly higher than before, the company said Wednesday. Mercedes also reported second-quarter results that beat expectations. “We are enhancing our vigilance and resilience to manage increasingly complex macroeconomic and geopolitical challenges,” Chief Executive Officer Ola Kallenius said in a statement. “At the same time, we have good reasons to remain confident, with ongoing strong demand, a fresh vehicle portfolio and further key product launches this year.”

함의: 벤츠는 강한 소비 수요, 훌륭한 세그먼트별 포트폴리오, 신규 모델 출시가 높은 매출과 이익률과 유지하게 할 것이라며 자신감을 표명함.

The FOMC is set to hike interest rates by 75 basis points for a second straight month in July. Fed Chair Jerome Powell likely will acknowledge that downside risks to growth have increased since the June meeting, but will reiterate the Fed’s commitment to controlling inflation. Even as forward-looking measures indicate a retreat in inflation, Powell isn’t likely to offer support for an imminent “Fed put” to backstop markets. 

함의: 그는 시장이 원하는 것을 순순히 내어주지 않을 수도 있음.