Marketmind: One coin to rule them all

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A Look at the Day Coming from Julian Ponthus

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While the practicality of minting the US trillion-dollar coin is indeed being debated, it says a lot about this final day of Q3 2021 enthusiasts.

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Yes, #MintTheCoin is a thing and while Treasury Secretary Janet Yellen’s idea of ​​raising $1,000,000,000,000 via a coin to avoid a default sounds like a fantasy, the idea of ​​Tolkien’s Mordor-minted creation in Lord of the Rings Equally, a US default is likely filtering into some asset prices.

Truth be told, the policy response to the COVID-19 market crash has so far been unconventional and central banks still hold tens of billions of securities monthly even amid rising energy prices, supply chain bottlenecks, job losses and upward trend economic growth. are buying.

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And speaking of fairy tales, this week’s equity and bond selloff marks the end of Goldilocks, the sweet spot when markets are in an environment of not too hot, not too cold economic growth and inflation.

Yields are now rising sharply around the world, with MSCI’s gauge of stocks worldwide (.MIWD00000PUS) losing nearly 1% in the quarter and portfolio managers increasingly shifting portfolios from growth stocks and tech to financial and energy stocks. which usually flourish. with inflation.

Meanwhile, the reality of China’s lethargy is sinking.

China’s factory activity unexpectedly slowed down in September due to restrictions on electricity access and increased input prices, data showed.

Still, equity markets outside Japan are moving higher, with Asian shares rising about 0.5%. The dollar is just off one-year high and oil prices have cooled slightly.

Futures for European markets and Wall Street are pointing higher.

Key developments that should provide further direction to the markets on Thursday:

– China’s manufacturing shrinks unexpectedly, services provide support

— China Evergrande shares swing as bondholders await word on payment

– Japan’s factory output declines on car production cuts

– The UK economy improved more than expected in the second quarter before the recession

— Cost inflation to dent Boohoo’s full year margins

Diageo’s margins see an uptick on opening of bars, restaurants

— UK second quarter GDP/current account

— US Q2 Final GDP/Weekly Unemployed/Final Core PCE

Businesshala Graphics
Reporting by Julian Ponthus

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