As health authorities all over the globe search for ways to stop the monkeypox outbreak, investors are snapping up shares of companies that could benefit from the race to quell the disease. Shares of vaccine producers, antiviral drug makers and protective equipment manufacturers are in demand as investors tap a strategy that delivered gains during the coronavirus pandemic. Biotechnological company Bavarian Nordic A/S and pharmaceutical firm Siga Technologies Inc. are among the stocks in focus as well as medical tools supplier Precision System Science Co. While nowhere as severe as the Covid-19 outbreak, the spread of monkeypox infections across more than 70 countries in just a few months has prompted the World Health Organization to declare it as a global emergency. This pronouncement may give the trade an extra tailwind.

함의: 학습효과.

China’s factory activity unexpectedly contracted in July, reversing earlier economic momentum as sporadic Covid outbreaks weigh on the recovery. The official manufacturing purchasing managers index fell to 49 from 50.2 in June, the National Bureau of Statistics said Sunday. Economists had expected a reading of 50.3, according to the median estimate in a Bloomberg survey of economists. A reading above 50 indicates expansion from the previous month, while anything below indicates contraction. The non-manufacturing gauge, which measures activity in the construction and services sectors, decreased to 53.8 from 54.7 the previous month. That was below the consensus forecast of 53.9. 

함의: 중국 제조업이 예상과 달리 수축 국면에 진입함.

The Bank of England is expected to step up its fight against inflation in the coming week, joining some 70 other institutions around the world in delivering a half-point increase in borrowing costs. The move anticipated by most analysts and investors would mark the UK’s biggest increase in interest rates in 27 years and accelerate a historic pivot away from the era of cheap money. Governor Andrew Bailey has suggested the hike won’t be the last, saying policy makers are prepared to act “forcefully,” if necessary, to rein in inflation.

함의: 영국 중앙은행 또한 27년만에 한 번에 50bp의 금리인상을 단행할 것으로 예상됨.

Big investors like BlackRock Inc. and KKR & Co. Inc. think junk bond and leveraged loan prices look cheap, and are slowly buying even if there’s a good chance that markets will oscillate wildly in the coming months. High-yield companies still have relatively strong balance sheets, and defaults probably won’t surge even in a recession, said Mitchell Garfin, co-head of leveraged finance at BlackRock. Even after rallying in July, US junk bonds have weakened about 10% this year, accounting for both interest payments and price movements, according to Bloomberg index data. Leveraged loans have fallen too: The average price was 93.6 cents on the dollar on Thursday, compared with 98.6 cents at the end of 2021.

함의: 고수익 채권을 발행한 회사의 재무건전성은 여전하며 향후 경기침체 위기에도 도산위험은 적다고 판단하며 대형 기관 중심으로 향후 변동성을 감내하겠단 의지로 저가 매수가 이어지고 있음.

There have been 34 recessions since 1857, ranging in length from more than five years to the pandemic-driven contraction of 2020 that lasted two months. The NBER’s definition of a recession isn’t cut-and-dried and leaves room for interpretation. The group loosely defines it as a “significant decline in economic activity that is spread across the economy and lasts more than a few months,” a phrase that can be shortened to three single-word criteria: “depth, diffusion and duration.”. We often don’t know when a recession begins or ends until months later, when the committee makes the call.

함의: 경기침체의 정의는 해석의 여지가 많고, 일반적으로 이를 선언하기 전에 그것이 정확히 언제 시작되어 언제 끝나는지 인지하기 쉽지 않음.

The euro, already beaten down this year to the lowest in two decades, remains an unloved currency stuck under relentless pressure as its economy stumbles toward a recession. It’s hanging on just above parity with the dollar, after a brief dip below that level earlier this month for the first time in more than two decades. The currency has become a lightning rod for the mounting pessimism about the euro area’s economy. It’s fallen more than 10% versus the dollar this year, and many analysts say the likely direction from here is further down. Much of the economic gloom is centered on the disruption of Russian energy supplies to Europe, which particularly threatens German industry. Credit Suisse sees a 50% chance of the euro region falling into a recession in the next six months. Goldman Sachs says it may already be in one.

함의: 에너지 위기로 제조업에 큰 타격을 받은 독일을 중심으로 경기침체에 대한 확신 내지 높은 확률의 전망이 나오는 동안 유로화는 한 때 달러와 동등한 수준까지 하락했고, 침체의 바로미터가 되어 향후 더 가파른 약세를 보일 수도 있음.

Deutsche Lufthansa AG may face further disruption after its pilots voted for strikes if they’re considered necessary to force a wage deal, a move that could unleash another wave of cancellations unless the airline’s negotiators and labor representatives can settle their differences. The VC pilots union voted overwhelmingly on Sunday in favor of walkouts, meaning Lufthansa could be hit with stoppages as soon as next month. Strikes would trigger additional cancellations on top of the 7,000 flights the company has scratched this summer due to staffing shortages. “This positive ballot does not yet necessarily lead to strike action,” the union said in an emailed statement. “But it is an unmistakable signal to Lufthansa to take the needs of cockpit staff seriously.”. Pilot strikes at Europe’s biggest airline would add to a summer of chaos across the continent, where airports and airlines have struggled to accommodate a surge in bookings compared with the pandemic-induced slowdown.

함의: 인플레이션이 가처분소득을 비틀면 임금인상을 위한 파업이 이어지는 것임.

Vladimir Putin said Russia’s fleet would soon be fitted with powerful “Zircon” hypersonic cruise missiles, which can fly at five times the speed of sound. He signed a new naval doctrine and vowed to respond “with lightning speed to anyone who decides to encroach on our sovereignty and freedom.”. Ukrainian President Volodymyr Zelenskiy urged civilians in the Donetsk region to evacuate to protect themselves from Russian attacks in what’s become a lengthy ground battle. A Ukrainian grain magnate was killed by Russian shelling in Mykolaiv. Russia’s defense ministry said it had invited experts from the United Nations and the Red Cross to investigate the deaths of Ukrainian POWs in the Olenivka detention center in occupied Donetsk.

함의: 러시아의 포격에 우크라이나 곡물 거부가 사망한데 이어 마하5의 초음속 크루즈 미사일을 해군이 장착하도록 서명하며 전쟁의 규모를 키우려고 함.

US shale drillers are expected to post record second-quarter profits in coming days, reversing nearly a decade of debt-fueled losses. The top 28 publicly traded US independent oil producers generated $25.5 billion in free cash flow in the three months to June 30, according to estimates compiled by Bloomberg. In that space of time they’ll have made enough cash to erase one-fourth of what they lost over the previous decade. Fracking revolutionized global energy markets by enabling American drillers to harvest shale resources that had previously been untouchable. In the space of just over 10 years, the US went from a declining crude producer to the world’s dominant oil and gas source, but at an astronomical cost: the 28 companies lost about $115 billion in the decade leading up to the Covid-19 pandemic.

함의: 수평시추와 수압파쇄를 통한 셰일혁명은 미국을 원유 및 가스 생산자로 만들었지만 천문학적 비용을 감당케 했는데, 최근 이 업체들은 2분기에만 지난 10년 손실의 25% 규모에 해당하는 현금흐름을 창출한 것으로 추정됨.

The last time inflation burned hot, consumers could put money in the bank and watch it grow like the prices on store shelves, easing much of the pain. Not this time -- and that’s stoking profits for US lenders. The gap between what banks pay depositors and what they earn from lending money to borrowers hasn’t been so wide in the past half-century, with the average savings account paying a skimpy 0.06%. Many banks are telling shareholders that so-called deposit betas — measuring how quickly deposit rates rise in the wake of Fed hikes — will remain advantageous for banks in the months ahead, as they’re not yet feeling much pressure to pay savers more. Betas are now the buzziest bit of jargon across the financial industry. The phrase was invoked more times during Bank of America Corp.’s analyst briefings in the past two months than in the prior two years combined. This month, the lender’s executives predicted interest income may climb by as much as $1 billion in the third quarter from the second as they stay “disciplined” in what they pay customers. “Our consumer-banking segment continues to see good momentum,” Chief Executive Officer Brian Moynihan told analysts July 18. “We grew loans at the fastest quarterly pace in nearly three years.”

함의: 과거 인플레이션 시기에 예금을 통해 소비자는 적당한 만족을 얻을 수 있었지만, 최근 대출금리와 예금금리 간 차이가 크게 벌어지며 인플레이션은 은행에게만 커다란 이익을 줄 것으로 예상됨.

We do not see lower US rates on any incremental Fed dovishness as a threat to the dollar amid rising recession risks. USD has historically always risen in recessions even as the Fed cuts aggressively and is principally rooted in economic weakness outside the US that is largely Fed invariant, and shows few signs of abating. Business surveys are sliding in Europe, and are coupled with another sharp rise in natural gas prices. In China, the Politburo meeting disappointed hopes of big bang policy stimulus. Stay defensive.

보고서: 중앙은행의 금리인상에 대한 기대가 낮아지면서 달러의 강세가 완화될 것으로 기대하는 쪽이 있지만, 경기가 침체에 도달할 수록, 그리고 비미국 국가의 경제가 미국 대비 더 약할 때라면, 중앙은행이 금리를 인하해도 달러는 강세를 보였다는 것을 알아야 함. (J.P.Morgan - Tactics vs. strategy around the dollar)

"Roots are not in landscape or a country, or a people, they are inside you."

- Isabel Allende

Will she or won't she? Nancy Pelosi departed for Asia with no official sign that Taiwan is on her itinerary. China, which has warned of consequences including the possible use of military force if the House speaker visits the island, held live-fire drills in the Taiwan Strait on Saturday. Pelosi's office said her delegation will visit Japan, South Korea, Singapore and Malaysia, with a focus on security, economic partnership and democratic governance.

힘의: 갈 것인가, 안 갈 것인가?