The new month has started a little less auspiciously than the old one ended, with US financial assets trading moderately lower overnight. Mind you, the magnitude is hardly Earth-shattering, and European and Asian equities are on the green side of the ledger, for the most part. Friday’s close helped cement the current rally as the largest since the S&P 500 fell from its all-time high. The key question is obviously what comes next? The equity surge in March ended fairly abruptly, with a small dip on the last day of the month and then a sharp drop at the start of April. Indeed, it is amazing how often a simple change of the calendar month can bring about a change in the tone of market trading.

함의: 3월 반등 이후 4월 하락을 기억하는가? 때때로 월이 바뀌었다는 이유로 시장 심리가 급변하는 것은 놀랍다.

Portfolio managers are the only group of investors that appreciate tech stocks as much as value assets, according to the MLIV Pulse survey. The majority of 1,562 respondents in the survey said that value stocks will offer better performance over the next six months. Still, they expect big tech shares to gain, and point to Microsoft and Amazon as the ones with the most potential. After a 13% decline in the S&P 500 so far this year, most of the respondents said, the index is a better place to invest than Treasuries in the near term.

함의: 설문 응답에 따르면 가치주만큼 기술주를 선호하는 유일한 집단은 포트폴리오 매니저였음. 응답자 대부분은 큰 폭 하락한 지수가 당분간 국채보다 나은 투자가 될 것이라 답했음.

Stock futures and the Chinese yuan don’t like the report that US House Speaker Nancy Pelosi is headed for Taiwan on Tuesday. S&P futures are down around 0.7%. The move threatens to derail last week’s rally. The speculators who keep adding to their shorts may now get some satisfaction. The offshore yuan dropped 0.4% in a sign of the potential turbulence that the visit may cause. China’s military won’t sit idly by if Pelosi visits Taiwan, a Foreign Ministry spokesman said.

함의: 하원의장의 화요일 대만 방문 일정이 발표된 뒤 미국 선물과 위안화는 부정적 반응을 보이며 해당 일정이 지난 랠리에 제동을 걸 수 있음을 암시함.

US manufacturing activity continued to cool in July as factories dialed back production in the face of shrinking orders and rising inventories. The Institute for Supply Management’s gauge of factory activity eased to 52.8, the lowest level since June 2020, from 53 a month earlier, according to data released Monday. Readings above 50 indicate expansion, and the latest figure compared with a median projection of 52 in a Bloomberg survey of economists. The group’s measure of production also fell to a more than two-year low, and its gauge of new orders remained in contraction territory for a second month. The figures highlight softer demand for merchandise as the economy struggles for momentum.

함의: 공급관리협회 제조업 지수가 신규주문 및 생산 감소로 2020년 6월 이후 최저치를 기록함.

Yup, Prices Paid Look Like a Commodity Story. The prices paid component of the ISM certainly grabs the eye, but I am not sure if it tells us anything new. My quick reaction posited that it was a function of lower commodity prices, and a cursory study appears to confirm the view. The chart below shows the manufacturing prices paid overlaid with the (arbitrarily-chosen) 6-month change in the headline Bloomberg Commodity index -- as you can see, there is a lot of correlation.

함의: 공급관리협회 제조업 지수 내 지급 항목은 원자재 가격 6개월 변동분과 밀접한 상관관계를 가지며, 지급가격은 지속 하락하고 있음.

Large speculators in the futures market, mostly hedge funds, turned net short on S&P 500 futures contracts in mid-June as the 500-member index plunged to 3,666.77. They’ve been net-short the futures for six consecutive weeks since then, and last week boosted the net bearish positions to nearly 238,000 contracts, the most since June 2020, data compiled by the Commodity Futures Trading Commission released on Friday show. The strategy hasn’t paid off, at least so far: the S&P 500 just clocked its best month in 20 with a 9.1% bounce, while the Nasdaq 100 Index posted its second-best month since 2010. “Last week’s rally was a huge ‘pain trade’,” said Dave Lutz, managing director at JonesTrading Institutional Services. “The S&P holding the 100-day moving average is going to be very painful for those short.”

함의: 지난 6월 중순 이후 많은 헤지펀드가 지수에 대한 매도 포지션으로 돌아선 뒤 월간 큰 폭 반등을 보인 시기를 포함 6주간 고통 속에서도 매도 물량을 확대했고, 현재 2020년 6월 이후 최대 규모의 순매도 포지션이 구축됨.

"Life is the art of drawing without an eraser."

- John W Gardner

The gap between short-term pricing expectations of diesel and gasoline is widening, indicating industrial demand is more resilient to high prices than consumers being squeezed at the pump. That suggests diesel may go higher due to very tight global supply as winter approaches. Global diesel inventories are still low, and supplies from China -- the world’s largest exporter of distillates -- remain muted. To offset a drop in flows, Europe boosted imports from Americas. And despite environmental concerns, looming natural-gas shortages are forcing European power plants to switch to alternative fuels.

함의: 경유와 휘발유 간 가격 차이가 지속 확대되고 있는데, 산업용도와 난방용도로 공히 사용되는 경유는 수요 대비 공급부족이 심화되고 있기 때문이며, 유럽의 경우 환경오염 우려에도 불구 다시 발전소를 가동해야 함.

The White House sought to dial back rising tensions with China over House Speaker Nancy Pelosi’s expected visit to Taiwan, insisting the trip doesn’t signal a change in US posture toward the island and urging Beijing to refrain from an aggressive response. Pelosi may land in Taipei as soon as Tuesday, according to people familiar with the matter, a landmark visit that would make her the highest-ranking US official to set foot on the island in 25 years. China regards Taiwan as part of its territory and has promised “grave consequences” for Pelosi’s visit. A meeting with Taiwan’s president, Tsai Ing-Wen, is on Pelosi’s schedule for Wednesday, according to one of the people. “Put simply, there is no reason for Beijing to turn a potential visit consistent with long-standing US policy into some sort of crisis or conflict or use it as a pretext to increase aggressive military activity,” National Security Council spokesman John Kirby said at a Monday press briefing. 

함의: 하원의장의 대만 방문이 미국을 대변하지 않으며 중국의 정책에 대한 입장 변화는 없다며 갈등이 고조되지 않길 바란다고 함.

Asia Defense Firms Rise Ahead of Expected Pelosi Visit to Taiwan. Some Asian defense firms gain after a report saying US House Speaker Nancy Pelosi will be arriving in Taiwan later on Tuesday renewed concerns that US-China tensions may escalate. South Korea: Hanwha Aerospace gains as much as 6.4%, Firstec +4%, Japan: Ishikawa Seisakusho +3.3%, Hosoya Pyro-Engineering +4.5%, China: AVIC Shenyang Aircraft, AviChina Industry & Technology, AVIC Electromechanical, China Harzone Industry, China Zhenhua Group, AVIC Jonhon, AECC Aviation Power, China Aerospace Times, China Spacesat, Jiangxi Hongdu Aviation Industry, Anhui Great Wall Military, China Shipbuilding Industry.

As the US Congress passed an historic $52 billion federal program to boost domestic chipmaking capabilities, it included one significant caveat: Companies that receive the funding have to promise not to increase their production of advanced chips in China. It’s a condition that will certainly add to escalating tensions between Washington and Beijing. The curbs will hit companies like Intel Corp. and Taiwan Semiconductor Manufacturing Co., leading chipmakers that have tried to build their businesses in China. TSMC won’t be able substantially upgrade or expand its existing facilities, effectively losing some growth opportunities in the world’s biggest semiconductor market. Specifically, the Chips and Science Act bars companies that get federal funding from materially expanding production of chips more advanced than 28-nanometer in China -- or a country of concern like Russia -- for ten years. While 28-nanometer chips are several generations behind the most cutting-edge semiconductors available now, they are still used in a wide range of products including cars and smartphones. The ban covers both logic and memory chips.

함의: 반도체 보조금 법안에 눈여겨 보아야 할 점은 지원을 받는 기업은 중국 내 설비및 첨단 기술 투자를 제한한다는 것으로 인텔이나 TSMC처럼 중국 확장을 통해 성장을 계획했던 것을 막을 뿐 아니라, 지난 기술이지만 여전히 자동차나 핸드폰에 사용되는 28nm 칩을 중국이나 러시아와 같은 우범지역서 10년간 생산치 못하게 하는 것도 포함되어있음.

Are We There Yet?

Company executives are getting much more worried about economic growth, judging by their earnings conference calls, even as stocks staged a furious rebound in July. Executives and analysts are on track to use phrases related to an economic slowdown three times more on second-quarter calls than they did during first-quarter results, according to a Bloomberg analysis of trannoscripts for companies in the S&P 500, the Nasdaq 100 and the Stoxx Europe 600 indexes. A Bank of America Corp. tracker also showed corporate sentiment during earnings calls has plummeted even as analysts are still expecting earnings growth to accelerate into next year.

함의: 애널리스트 추정치는 여전히 내년도 성장을 이어갈 것으로 전망되는 가운데, 2분기 실적 컨퍼런스콜에서 경기둔화를 지난 1분기보다 3배 많이 언급함.

China’s top leaders told government officials last week that this year’s economic growth target of “around 5.5%” should serve as guidance rather than a hard target that must be hit, according to people familiar with the matter. Leaders held meetings with ministerial and provincial-level officials last week, during which they were told the target won’t be used to evaluate their performance and there won’t be penalties for failing to achieve it, according to the people, who asked not to be identified because they were not authorized to discuss the matter publicly. The leaders also acknowledged that the chances of meeting the target were slim, the people said.

함의: 경제성장률 5.5% 달성이 쉽지 않음을 알고, 이를 달성하지 못한다해서 불이익은 없으며 가이던스 정도라고 함.