NetEase earnings, jobless claims & debt auctions

Looking at the day ahead I’m watching earnings from NetEase and TUI - as well as US jobless claims and the third big day of US debt auctions.


I’ll start back to front with the debt auctions. In hindsight I should have mentioned these in the past two days - but honestly, I’m used to ignoring them. But I think it’s clear that they played a big part in gold and silver prices crashing like they did on Tuesday.


Clearly this is simplifying but as I see it - the Treasury is adding supply into bond markets - that naturally reduces price - and prices trade inverse to yields - so yields spiked and brought gold tumbling lower, which has been trading in lockstep with falling real yields in recent weeks.


For those who like the details -- The treasury auctioned $48 billion in 3-year notes on Monday, $38 billion in 10-year notes on Tuesday and today will sell $26 billion in 30-year bonds.


OK elsewhere - markets continue to watch the high frequency data closely - so jobless claims will be important - especially after Friday’s positive NFP surprise. Initial jobless claims are forecast to come down to 1.12 million from 1.19 million - and continuous claims are expected to come down a tad to 15.9 million from 16.1.


NetEase has been one of the COVID darling trades - like we mentioned with Tencent this week and Nintendo and Electronic Arts last week - it’s a good time to be in computer games when people are stuck at home and increasingly reliant on technology for work. Subscriber growth should have popped but let’s see what has happened to the top line given the weaker advertising environment in China. The shares are up an enviable 53% this year.


Finally, we can probably expect a pretty rough quarter for German travel company TUI, where even lately things haven’t brightened much with flights from the UK to Spain getting cancelled because of government travel advisories. The shares are down 62% this year.


Have a great day ahead!


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