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.

The good news for anyone eager to avoid an inversion in this curve is that the current three-month rate has tended to rise into Fed meetings and fall afterwards. The bad news is that it hasn’t done much climbing this week. The forwards may stay stable too, especially as there are no DOTS to go off this time. There’s also a chance both measures are little moved by the Fed so then Thursday’s GDP release will become key. A negative GDP print could well manage to spook investors enough to bring the forwards down toward or even under current rates.

함의: 파월 의장의 핵심지표가 가파르게 하락하면서 침체 경계를 키운 가운데, 긍정적인 면은 3개월물 금리가 통화정책 전 상승했다 다시 하락하는 경향이 있단 것, 반면에 이번 주 3개월물 움직임은 적었을 뿐 아니라 점도표가 없어 3개월물 포워드도 움직임이 덜할 수 있단 것임. 어쩌면 경제성장률 발표가 더 핵심일 수도 있음.

An increasingly popular sales pitch on Wall Street goes like this: If you’ve insured your home against some disaster, or even a total loss, shouldn’t you do the same for your investment portfolio? In the case of a house or apartment, the danger would be fire, flooding, or perhaps a devastating storm. In the financial markets, it might be a sudden spike in volatility and a rapid decline in prices that wipes out months if not years of gains. For investors of all stripes, from the most august institution to the scrappiest day trader, the current maelstrom of sustained inflation, never-ending pandemic, war, rapidly rising interest rates, swooning tech stocks, and crypto collapse—what economic historian Adam Tooze calls a polycrisis—feels like the equivalent of a Category 5 hurricane. So it’s no surprise the pitch is working. Everyone, it seems, is looking for a way to ride out the storm in one piece. Cambria Tail Risk ETF shows the kind of endurance such investments can require. Over the past three tumultuous months, it’s gained about 1%, compared with a 6% loss for the S&P 500. In the first quarter of 2020, when Covid rocked the markets, it returned 24%. Over the stretch of the past five years, however, it’s lost a cumulative 24%, compared with a 72% total return for U.S. stocks. “It’s an insurance-style fund,” says Meb Faber, chief executive officer of Cambria Investment Management. “We see a lot of people using it tactically—they are trading it based on whatever is going on in the world.”

함의: 최근 월가에서 호응을 얻는 피칭은 재난보험을 가입하듯 포트폴리오에 대한 보험은 왜 하지 않냐는 것, 인플레이션, 전염병, 전쟁, 급격한 금리상승 등이 허리케인 재난과 다를 바 없기 때문임. TAIL ETF는 지난 5년간 -24% 하락하며 +74% 상승한 지수와 반대였으나 2020년 1분기 +24%, 최근 3개월 +1% 상승하며 지수 -6% 대비 보험이 됐고, 이를 전술적으로 활용하는 이가 많음.

Doubling down. The Fed raised rates by 75 bps for the second straight month, and while Jerome Powell suggested a similar move was possible in September, he said the paces of increases will slow at some point. The chair also signaled there'll be less forward guidance, saying officials will go back to a meeting-by-meeting basis for its decision. While the statement noted that spending and production have softened, "I do not think the US is currently in a recession," Powell added.

함의: Fed Rally.

The Senate on Wednesday passed legislation that includes $52 billion in grants and incentives for US semiconductor manufacturing, an industry that has steadily lost ground to foreign competitors in recent years. The 64 to 33 vote comes after more than a year of debate and marks a major legislative victory for President Joe Biden, whose agenda has largely stalled in the Senate, where 60 votes are required to pass most legislation. The bill is expected to pass the House later this week and then move to Biden’s desk for his signature. Wall Street is likely to welcome the help. The Philadelphia Stock Exchange Semiconductor Index fell 30% this year through Tuesday, positioning the gauge for its worst annual performance since 2008.

함의: 60표 이상을 득표해야 통과 가능한 상원에 바이든 정부의 대기 중인 법안이 많은 가운데, 오랜 기간 끌어 온 반도체 기업에 대한 보조금이 64대 33으로 통과했다는데 주목함.

Meta Platforms Inc., which runs Facebook and Instagram, reported its first ever quarterly sales decline, citing advertisers’ shrinking budgets. Meta revenue slipped to $28.8 billion in the second quarter, missing the $28.9 billion average analyst estimate. The company’s forecast for the current quarter also fell short. Shares dropped in late trading. The company’s advertising sales efforts are hitting a number of snags. Marketers are spending less due to various economic pressures, leaving Meta and its peers to compete for the smaller budgets. Apple Inc.’s privacy rules have made ads on Facebook and Instagram less effective. 

함의: 심리가 위축 된 광고주들의 집행 감소와 애플의 개인정보 보호정책으로 인한 광고 효율 악화로 첫 매출 역성장을 기록함.

Apple Inc. has enlisted one of Lamborghini’s top car-development managers in a sign that it’s stepping up work on a self-driving electric vehicle, according to people with knowledge of the situation. The company hired Luigi Taraborrelli, a 20-year veteran of the Italian carmaker, to help lead the design of Apple’s future vehicle, said the people, who asked not to be identified because the matter isn’t public. Taraborrelli was most recently Lamborghini’s head of chassis and vehicle dynamics. The move is another signal that Apple is committed to producing a car following years of setbacks and upheaval. With his experience, Taraborrelli becomes one of the most senior managers on Apple’s EV team and brings some exotic-car panache to the effort. 

함의: 애플은 람보르기니에서 차량역학과 섀시를 담당하던 'Luigi Taraborrelli'를 전기차 부문 고위 관리자로 채용하면서 자동차 산업 진출에 명확한 의지를 보여줌.

Two bond market giants are diverging on whether the Federal Reserve is doing enough to tame inflation in the aftermath of the central bank’s interest-rate increase on Wednesday. In one corner, there’s Scott Minerd, the chief investment officer of Guggenheim Partners, which oversees more than $325 billion. He said the Fed’s guidance that it will likely move more slowly through the rest of the year won’t help bring down price growth. He sees inflation ending at still-hot levels this year at between 5% and 6% -- well above the central bank’s target. DoubleLine Capital CIO Jeffrey Gundlach, by contrast, said this week’s unanimous decision to raise its benchmark lending rate by another 75 basis points means the Fed is no longer “behind the curve.” It all speaks to big market divisions stoking volatility in US Treasuries and across Wall Street.

함의: 채권계의 두 거장은 인플레이션을 중앙은행이 통제할 수 있는가에 대해 극명하게 갈리는데, 스캇 미너드의 경우 연말까지 중앙은행의 목표치보다 높은 5%~6% 물가를 보게 될 것, 제프리 건들락의 경우 이번 금리인상으로 인플레이션에 뒤쳐지지 않는 수준이라 평가함.

Dudley Says Fed Will Hike Much Further Than What Markets Expect. Financial markets are underestimating just how far the Federal Reserve will go to tame a decades-high inflation rate, according to former New York Fed President Bill Dudley. “That’s quite a bit more than what’s priced into the markets today,” Dudley said in an interview on Bloomberg Television. “The fact that he came back to the June SEP projections three to four times in his remarks suggests to me that the Fed thinks they’re going to do quite a bit more than what’s priced into the markets today.”. Dudley disagreed with Powell’s assessment that the Fed has already hiked rates to a neutral range. Given the level of uncertainty, “I’d be a bit more skeptical,” Dudley said, adding that the terminal rate is probably closer to 4%.

함의: 뉴욕 연준 총재였던 윌리엄 더들리는 시장이 인플레이션을 통제하기 위한 중앙은행의 행보를 과소평가하고 있다며 최종 정책금리가 4% 수준까지 도달 할 수 있다고 함.