Credit Ágricole: FX Risk
The beginning of the earnings season has led to investors pulling back a little bit from risk-seeking behaviour. This pullback is despite the fact that, of the 165 five S&P 500 companies reporting so far, nearly 98% have beat earnings expectations. But investors are especially focused on technology companies given that the Al boom is the biggest driver of equity markets. When focusing on technology companies, the earnings beat ratio drops to a still-healthy 81%. About 60% of technology companies have reported so far. Later today, SAP, IBM, Texas Instruments, Meta & Telsa will report their earnings, and these reports will be critical for investment sentiment. Investors are also keeping an eye on oil prices. While there has been an increase in the number of attacks on ships in the Strait of Hormuz, oil flows out of the Gulf continue leaving investor concerns quelled for now. Investors are also awaiting the Israeli general election on 27 October as well as the US midterm elections on 3 November. Rising equity and FX market volatility as well as EM-Sovereign and private credit spreads were the main drivers of the push higher in our Risk Index over the past week. Capping the rise in the
The beginning of the earnings season has led to investors pulling back a little bit from risk-seeking behaviour. This pullback is despite the fact that, of the 165 five S&P 500 companies reporting so far, nearly 98% have beat earnings expectations. But investors are especially focused on technology companies given that the Al boom is the biggest driver of equity markets. When focusing on technology companies, the earnings beat ratio drops to a still-healthy 81%.
About 60% of technology companies have reported so far. Later today, SAP, IBM, Texas Instruments, Meta & Telsa will report their earnings, and these reports will be critical for investment sentiment. Investors are also keeping an eye on oil prices. While there has been an increase in the number of attacks on ships in the Strait of Hormuz, oil flows out of the Gulf continue leaving investor concerns quelled for now.
Investors are also awaiting the Israeli general election on 27 October as well as the US midterm elections on 3 November. Rising equity and FX market volatility as well as EM-Sovereign and private credit spreads were the main drivers of the push higher in our Risk Index over the past week. Capping the rise in the Index was the outperformance of defensive stocks by cyclical stocks. Among G10 currencies, only the CHF, CAD and SEK have significant positive correlations with our Risk Index.
The GBP, USD and NOK have significant negative correlations with the Index.