Resume af teksten:
Den globale risikoappetit er påvirket af flere faktorer. Investorer har øgede tvivl omkring AI-selskabers høje værdiansættelser og investeringsplaner. Andre faktorer inkluderer høje realrenter, Hormuz-krisen, og en intensiv rapporteringsperiode. De amerikanske aktiemarkeder gik lidt tilbage, med S&P 500 faldende 1,0% og Nasdaq 1,4%. I Mellemøsten eskalerer en konflikt, hvor to amerikanske soldater er blevet dræbt i et iransk angreb. USA har slået tilbage mod Revolutionsgarden. Brent-olien steg til 90,4 dollars pr. tønde efter weekendens uroligheder. De høje realrenter giver udfordringer for både aktiemarkeder og gældstyngede regeringer. I Storbritannien har Andy Burnham overtaget som premierminister og skal håndtere økonomisk pres med stor offentlig gæld. EU’s forslag om mildere klimakrav møder modstand fra Sverige og Finland, som frygter for industrien og langsigtede investeringer.
Fra SEB:
Global key stories
Global risk appetite is on its toes for several reasons – conclusions. Friday’s markets were characterized by black headlines about investors’ increased doubts about the AI companies’ high valuations and extensive investment plans . But other factors also come into play: (1) high real interest rates , more below, (2) the Hormuz crisis and inflation risks, and (3) an intense reporting period . Economists have so far been impressed by the interim reports and the companies’ handling of the great unpredictability. US stock markets recovered some of Friday’s fall but still closed clearly in the red: the S&P 500 -1.0% and the Nasdaq -1.4%. July is seasonally a strong month and the S&P 500 rises by an average of about 1.3%. So far in July, however, the result is -0.5%. Note that the seasonal factor will be weaker over the next 6-8 weeks. The Iran war (see below) has escalated further over the weekend, while the Russian missile attacks on Kyiv are described as the most extensive since February 2022. Oil rose $4 on Friday and Brent is trading early Monday at $90.4 per barrel. Stock markets in Asia are characterized by a risk appetite that is on its toes ; Japan is closed today. US and European stock market futures indicate a sideways opening.
The Iran war is going in the wrong direction – conclusions. The conflict in the Middle East has escalated further. Two U.S. soldiers were killed in an Iranian attack in Jordan , after which the U.S. struck back against the Revolutionary Guards. Iran, meanwhile, has continued to attack U.S. targets and allies in the region. Now infrastructure and desalination plants are also reported to be targets. Tehran announced this weekend that it is “temporarily” refraining from complying with the memorandum of understanding – an agreement that many have already declared dead. The risk of a broader war and disruptions in oil supplies via the Strait of Hormuz has thus increased. There are still some signs of restraint, but the room for misjudgement is shrinking rapidly. The countries have now targeted each other for nine nights in a row . The situation is undeniably serious, and Donald Trump seems to lack a plan
High real interest rates stress stock markets and politicians . A new model estimate by the Fed shows that the US 10-year real interest rate is back at 2.1% (see graph below). In the market, the real interest rate is trading at 2.3%, close to the highest levels since the financial crisis of 2008 – 2009. This provides an attractive risk-free return. However, higher interest rates pose challenges for both stock markets and highly indebted governments, as future profits are discounted more heavily while refinancing costs rise. Some of the driving forces behind the rise in interest rates: (1) a higher real maturity premium for owning long-term bonds, (2) strong capital demand from both governments and businesses, and (3) geo-financial fragmentation, which risks limiting global capital flows.
Larry gets his seventh owner at 10 Downing Street . Larry the cat took over as the official rat catcher at the Prime Minister’s address back in 2011. Now the British also have their seventh prime minister in ten years: Andy Burnham . His political agenda includes increased regional power, increased state control of, for example, water and energy, increased housing construction, increased income taxes and a rapprochement with the EU. Read more here . But his policies are surrounded by big question marks, while fiscal policy is tied behind his back. Public debt is close to 104% of GDP (IMF), an increase of a huge 70% points in 25 years. The ten-year government bond yield (r) is trading at just below 5%. At the same time, potential nominal GDP growth (g) is estimated to be 3.5% over time. The warning lights should always be on when the interest rate (r) is higher than the growth rate (g). Burnham is now walking a difficult balancing act where all steps must be carefully considered .
Deadline for Trump’s temporary tariffs – thoughts . When the U.S. Supreme Court in February rejected the tariffs imposed under the IEEPA Emergency Act, the White House decided instead to use a temporary import duty of 10% under Section 122 . The tariff may be valid for a maximum of 150 days and expires on 24 July unless Congress approves an extension. However, Trump is expected to use other legal avenues to push trade policy further. Noted : Trump threatens Canada with increased tariffs due to Canadian fire smoke .
And BIG CONGRATULATIONS Spain on the World Cup gold! The outcome feels extra good considering Trump’s unjustifiably harsh criticism of the country and its leadership 😊 !
Nordic key stories
Worrying compromise solution. The EU’s proposal for milder climate requirements for industry puts political short-termism ahead of long-term solutions to the climate crisis. Sweden and Finland have reacted strongly. The fact that the EU creates unpredictability around the industry’s rules of the game for the energy transition is worrying and puts Nordic companies, which have tried to be at the forefront of the transition, in a relatively worse competitive position and challenge long-term investment projects. The EU proposal will be discussed over the next year by the Council of Ministers and Parliament before a decision is made.
Kilde: SEB, https://research.sebgroup.com/macro-ficc/reports/78797
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