The war in Ukraine has tended to increase uncertainty regarding inflation and growth prospects. When and with what consequences this war will end is pure speculation, but capital markets are expected to build a certain immunity to the headline risks in the coming weeks. The medium- to long-term consequences, on the other hand, could be significant. It is possible that we are at the beginning of a new bloc formation or a new Cold War. This would put a significant damper on globalization and further fuel higher structural inflation.

The Dow rallied over 700 points on Tuesday, and the S&P 500 and Nasdaq added 2.8% and 3.3%, respectively, as investors welcomed a slew of upbeat earnings reports while reassessing the outlook for tightening monetary policy. European markets also closed higher yesterday, registering their third positive session in a row, with the benchmark Euro Stoxx 50 advancing another 2.1%, led by gains in auto shares. Bank shares also rallied strongly as government bond yields went up.


  • Shares in Asia followed the global advance, with the Hong Kong market rebounding and Chinese markets hitting more than a week high, as Beijing indicated a shift towards more targeted COVID-19 control measures. The Nikkei traded at near 6-week high on tech stocks, while the ASX was at near 1-month peak, with all sectors moving higher. 
  • Oil prices were slightly weaker this morning after rallying for three straight days, weighed down by industry data pointing to a rise in US crude inventories and looming risks of a demand-sapping global recession. 
  • European stocks are poised to rally at the open while US futures are also set to extend their positive trend. There’s a flurry of earnings today, with Tesla, ASML and Abbott among firms set to report.  
  • The annual inflation rate in the UK increased to a record high of 9.4% in June from 9.1% in May and slightly above market forecasts of 9.3%. The biggest price pressure came from cost of motor fuels and food while the largest partially offsetting downward contributions were from second-hand cars and audio-visual equipment. 
  • The People’s Bank of China held steady its key rates for corporate and household loans at July fixing, as the central bank is trying to support ongoing economic recovery in the wake of COVID-19 outbreaks. The one-year loan prime rate was left unchanged at 3.7%, while the five-year rate, a reference for mortgages, was maintained at 4.45%. 
  • Netflix lost 970,000 subscribers last quarter – which is actually good news, considering that the world’s largest streaming service shocked Wall Street in April when it said it expected to lose 2 million. The company not only avoided that worst-case-scenario, but on Tuesday also predicted it would return to customer growth this quarter. 
  • Twitter was reported to have secured an expedited trial date in the lawsuit against Tesla Chief Executive Elon Musk over the cancelled $44 billion buyout deal. A Delaware court ruled that the lawsuit will take place in October. 
  • Johnson & Johnson saw sales rise three per cent to $24bn in the past quarter, up from $23.3bn in the same period last year. However, the company’s net earnings collapsed nearly a quarter in the three-month period, tumbling from $6.2bn to $4.8bn in the second quarter. The company cut its sales and profit forecast as easing lockdowns restrictions has prompted a slowdown in investment in the sector. 
  • Halliburton reported Q2 net income of $0.49 per share, up from $0.26 per share during the same quarter last year and beating consensus by $0.04 per shares. Revenue increased 36.7% year-over-year to $5.07bn, also topping the mean analysts’ expectations of $4.71bn.