It’s back to business on Monday, but there’s a bit of nervousness after the near coup/rebellion/cage fight in one of the world’s biggest nuclear powers over the weekend.
Questions remain over a possible power struggle in Russia, as it continues to wage war on Ukraine. But barring bigger developments, investors are returning their focus on whether aggressive central banks will spark a recession and market fallout.Wall Street has been growing more bullish after entering 2023 in a fearful state, following the S&P 500’s SPX worst year since 2008. One analyst who led bullish views headed into 2023 was Deutsche Bank’s chief U.S.
The strategist also weighed in on narrow market leadership, where S&P 500 gains are led by just a handful of names. “Keep in mind that the selloff of last year was also narrow,” he said, when energy stocks soared on higher prices. As for cyclical consumer stocks, the risk/reward is asymmetrical because so much is priced in for the downside. “Everybody in the market has been waiting so long for the recession and some things are priced for even more than an average recession,” he said.
The markets Stock futures ES00 YM00 are marginally lower, with Treasury yields TMUBMUSD10Y and oil prices CL.1 dipping, and silver SI00 making some strides. Lots of weakness across Asia, led by the Shanghai Composite SHCOMP , while Europe stocks SXXP are lower after a newsy Russia weekend, and natural gas futures NG00 are higher both in the U.S. and Europe. The ruble USDRUB is down 1.7% against the dollar DXY , which is a little softer overall.
The Fed’s preferred inflation gauge — the personal consumption expenditures price index — is a big economic highlight, due Friday. Durable goods and some housing market data is coming Tuesday, with appearances by Fed Chairman Jerome Powell on Wednesday and Thursday.Best of the web Second-quarter corporate profits are set for their biggest drop since the start of the pandemic. But then the worst could be over.