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Global Market Weekly Recap: Top 10 Market Graphs (week ended: 24/9)

Monday, September 20th 

Graphic 1: Evergrande and Iron Ore moving downwards in synchrony



Is Evergrande a signal that Chinese credit growth is worse than we thought ? There is also a clear investor shift away from China and Hong Kong with average exposure dropping 5.1% in January to 3.8% in September.

                                                                                                                                                             @ TME

 

Graphic 2: Operating profit margin for the S&P at an all-time high of 13.5%

Operating profit margin for the S&P at an all-time high of 13.5%

The operating profit margin (the net income divided by sales), tells us how much a company makes on a dollar of sales. The ratio reached an all-time high for the global S&P 500, peaking at 13.5% in the second quarter. 

                                                                                                                                                     @Compound

Tuesday, September 21st

Graphic 3: Bank of America saw a large equity inflow last week not seen since early H1


Investors are however increasingly less hedged with the net percentage of investors saying they have taken out protection falling below December 2020 levels.

                                                                                                                                                          @TME

 

Graphic 4: Mega cap tech sell off hitting $500 billion since Nasdaq peak
Mega cap tech sell off hitting $500 billion since Nasdaq peak

Mega cap stocks took a big hit on Monday, adding to the recent slump this month which is not without reminding September 2020, when the index declined 13%. The five biggest U.S. technology companies (Apple Inc., Amazon.com Inc., Facebook Inc., Google-parent Alphabet Inc. and Microsoft Corp.) shed more than $500 billion since the Nasdaq 100 peaked on Sept. 7.     

                                                                                                                                                             @Bloomberg                                                                                                                                          

Wednesday, September 22nd

Graphic 5: FedEx ground hit by rising labor costs; raises rates

 

Ground margins were below estimates, offset by better-than-expected Express and Freight results. FedEx incurred $800 million in cost headwinds versus a year ago, with $450 mil. due to labor market issues ($200 million for higher wages and purchased transportation expense and $250 million due to network inefficiency costs). FedEx is working to alleviate these pressures into 2H with targeted wage increases and other initiatives, but it expects the roughly $800 million headwind to continue into F2Q22. It is hopeful that a more supportive labor market, rate increases, and freight selectivity will alleviate the overhang in F2H, and help reverse margin declines. Forward P/E lowering, with sentiment caution, reflecting a depressed 12.6x P/E multiple, and signs of seasonal hiring and rate gain success could assuage labor shortage concerns.                                                                                                  @BoA

 

Graphic 6: Goldman Sachs: "Wait for the 10% dip"

Goldman Sachs:

 

Goldman Sachs analyst Peter Oppenheimer advises investors to wait for a 10% market correction before buying back in stocks. He believes that it is not a bad moment to get back in, as fundamentals remain strong and we're still early in the economic cycle. The correction will be a minor setback to regard as a buying opportunity for many.                                                                    @Bloomberg


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Thursday, September 23rd

Graphic 7: US coal demand is rising, but supply remains tight

 

Long-term contracts with power generators remain elusive in the sector, leaving many miners reluctant to invest in coal that may not have a buyer in the future. While the forward prices for natural gas remain high for the winter, buyers do not want to get caught with too much coal if gas prices decline.                                                                                                                                                                                   @S&Pglobal

Graphic 8: Chinese non-financial debt sector is massive


Debt owed by China’s non-financial corporates amount to 158% of GDP, dwarfing the average EM corporate debt ratio of 63.5% of GDP. @TME

Friday, September 24th

Graphic 9: Buyers continue to enjoy puts at local market lows



Hedge frustration seems to continue with the crowd continuously loading up on puts at local market lows.                                                                                                                                                         @TME

 

Graphic 10: Surging electricity prices put pressure on metals producers

Zinc producer Nyrstar NV said Thursday that it’s curtailing output at a major Dutch plant during peak times of day, highlighting how the spike in power prices is jeopardizing metal supply. For regional aluminum producers, electricity costs could equate to as much as 2,000 euros ($2,345) a ton, about 80% of the commodity’s overall price, Eurometaux said.                                                         @Bloomberg

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