From Marc to Market:
While there is much consternation from the American pundits and think tanks about China’s shock as it dominates auto manufacturing and value-added manufacturing, the two shocks from the US are more pressing for investors. First, The IEA says this is the biggest disruption in the oil market in history. The war in Middle East is escalating and the disruption has lifted September WTI to its highest level since mid-June and encourages investors and policymakers to look through energy-led decline in inflation measures, like we saw in the US last week and the UK earlier today. The disruption of helium, a byproduct of natural gas and essential for semiconductor fabrication, is also being felt. Second, the US is threatening to replace expiring tariffs (implemented on due “balance of payments” issues) with a new set later this week (claiming violation of “forced labor” standards) and this is after threatening Brazil with 25% tariff earlier this month and a 50% tariff on some Canadian goods threatened this week.
The US dollar is narrowly mixed against the G10 currencies, and excluding the oil sensitive Norwegian krone, the other currencies for the most part are +/- 0.1%. Benchmark 10-year yields are mostly firmer, while equities are mixed. The economic calendar for North America is light today and the Fed is in the middle of the “quiet period” ahead of next week’s FOMC meeting. Corporate earnings today include Alphabet and Tesla....
....MUCH MORE
