원문 보기
And that's of course the domestic picture, but I want to switch back to global and I want to quickly take take you through what's played out. One, you're seeing a Brent again above and firmly above the $100 a barrel mark. It's Brent is now firming up around the $105 a barrel mark. 3 3 and 1/2% uptick on Brent that we're seeing overnight.
We're also seeing US markets which notched all-time highs on Friday. In fact, I believe the S&P 500, the Nasdaq, both of those clocked their all-time highs, closed at their all-time highs. So, those two markets or rather those two indices in particular driving US markets higher in general. So, that's the other piece that's played out.
Bond yields, we're starting we're seeing a bit of a spike overnight on the US 10-year. We're seeing the US 10-year now at 4.3 39% around a two to three basis point spike on the US 10-year bond yield is what we're seeing overnight. And Asian markets are reacting to China's CPI numbers which have come through.
And what we're seeing on the numbers is a slight negative bias to the numbers in that are coming through. As a result of which you're seeing those reactions on the street. Let me bring on board Ed Yardeni as well, joining us. Ed, how do you [clears throat] reconcile these? Oil prices continue to be elevated.
You're continuing to see large amounts of uncertainty. You have the US president passing comments as well overnight, but US indices brushing all of that off. In fact, even the US futures not really indicating anything materially negative. Just a slight negative bias is what US futures is currently showing.
Yeah, yeah, you're right. I mean, it's been extraordinary to see the strength of the global stock market rally continuing here only with a kind of a brief sell-off during March, but ever since the end of March has been up up and away particularly in the United States, but also in many other areas of the world.
I I think part of the answer here is that this is not the 1970s all over again. The world is much less energy intensive than it was a few decades ago. That's part of the answer. I think the other is oil is leaking uh out of the Persian Gulf one way or the other. Maybe a good part of it's coming out of the pipelines out of Saudi Arabia, but probably the most more most important development is the United States I think is basically looking in the other way and allowing Russia to sell a lot of oil to China and India and I think that's making a big difference here in keeping the price of oil down.
Other than that, of course, inventories are being drawn down in in strategic petroleum reserves, but the market saw that and even the oil market has been it's it's been elevated, but it's it's right around $100 a barrel and I think the stock market's saying that the global economy can live with that.
Ed, I think the one market which is really catching everyone's attention has been South Korea. I mean record high after record high. That's what you know, some of these tech play earnings can do. I mean and I and I wonder why you're seeing so much of money actually gushing into markets like South Korea.
Well, look, I think we're in an AI led melt up in some of these global stock markets particularly in South Korea where uh there's a couple of companies that are very important in terms of producing memory required for AI infrastructure. Taiwan, of course, has Taiwan semi and other important companies for the AI approach.
In the United States, of course, we have a lot of companies. It's no longer just the magnificent seven. There's also all the semiconductor companies that are not in the magnificent seven that are doing extremely well. So, earnings have been remarkably strong during the first quarter earning season that is just about coming to an end in the US and earnings have been very, very powerful and analysts have just been I've never really seen anything like it where analysts are raising their earnings estimates so rapidly for each quarter of this year, for this year, and for next year.
And so again, I think we have what I would describe as an earnings led melt-up, which may be more sustainable, but it it also may be too much of a good thing. You know, how do you look at you know, fund flows in in the entire context and you know, do you see funds now foreign flows now going into these markets where you have the AI play and you know, avoiding other emerging markets where you don't have that AI?
Well, I have been recommending overweighting the rest of the world relative to the US since 2010. I've been recommending staying home in the US. In other words, overweighting the US. That worked out really quite well. Then last year, we saw a reversal where the global economies stock markets were doing much better and I think that will continue and I think emerging markets including in India should benefit from it.
But of course, what's really driving the emerging markets index is up right now as we just discussed is South Korea and Taiwan. Their stock markets, even little Israel, Israel's stock market has been very strong because it too has a presence in in technology. Brazil, Mexico, they've done well for various reasons.
Mexico has oil, Brazil has some key commodities. But with regards to India, I think the main issue is the price of oil. And it's it's too high right now and it needs to come down. So I think India doesn't necessarily participate in the emerging markets rally, which is not across the board. So India's not exactly all by itself, but it is an oil importer and I think oil importers are at a disadvantage here as long as the Strait of Hormuz is closed and oil prices remain at $100 and people fear it could go higher.
Indeed. And always good having you on the show. Thank you so much for your time today. My pleasure. Okay.
Comments 0