Quote:The market slump may be in its final innings. According to Evercore ISI’s Julian Emanuel, stocks should start grinding higher due to peaking inflation. He cites a positive trend going back to the last time stocks and bonds fell together: 1994. “The market just sort of digested it, and there was a lot of sideways chop,” the firm’s senior managing director told CNBC’s “Fast Money” on Monday. “There was a lot of bearishness.” It paved the way for an epic market breakout over the next four years. “At the end of the day, earnings carried the day,” noted Emanuel. “That’s what we see when we think about ’22 and ’23 because we don’t think there’s going to be a recession.”

Quote:Chinese real estate developer bond prices have ticked higher as investor confidence gets a boost from policy support for the battered industry. Since March, due to weakening market demand, banks in more than 100 cities in China have lowered mortgage rates by an average of 20 to 60 basis points, Zou Lan, director of the People’s Bank of China’s financial markets department, told reporters Thursday. But analysts point out Beijing’s emphasis that “houses are for living in, not speculation” means the property market won’t resume the high growth of the past.

Quote:Meanwhile, investors are worried about the Fed shrinking its roughly $9 trillion balance sheet under its quantitative tightening program, according to Violin. The central bank is aiming for a faster pace of reduction compared to its last effort at quantitative tightening, which roiled markets in 2018. The stock market plunged around Christmas that year.  “The current anxiety is that we’re headed to that same point,” said Violin. When it comes to reducing the balance sheet, “how much is too much?” Saglimbene said that he expects investors may largely “look past” quantitative tightening until the Fed’s monetary policy becomes restrictive and economic growth is slowing “more materially.”  The last time the Fed tried unwinding its balance sheet, inflation wasn’t a problem, said SEI’s Solloway. Now “they’re staring at” high inflation and “they know they have to tighten things up.”

Quote:Stock markets are turbulent and Morgan Stanley is warning clients the ride is about to get even bumpier. Investors have "very few places to hide" in markets right now, with even defensive stocks succumbing to the pressure in recent days, Morgan Stanley equity strategists led by Mike Wilson wrote on Monday. "The market has been so picked over at this point, it's not clear where the next rotation lies," Wilson wrote. "In our experience, when that happens, it usually means the overall index is about to fall sharply with almost all stocks falling in unison." Morgan Stanley says the backdrop "suggests" the S&P 500 will enter a bear market, signaling a 20% decline from previous highs. Recent selling may support the view that markets are moving into a "much broader sell-off phase," the bank said.

Quote:Siempelkamp Giesserei has seen its fair share of crises in its 99 years. But pandemic shutdowns, supply chain disruptions and soaring energy prices have thrown the Düsseldorf metals factory into uncharted territory. "There has never been anything like this before," Georg Geier, the company's managing director, told CNN Business. The major difference between past and present? Customer demand is high, but Siempelkamp either can't find, or can't afford, the supplies of the iron, nickel and energy it needs. It is a similar story at many of Germany's manufacturing businesses, which contribute almost a fifth of its GDP, according to the World Bank. Industry behemoths like Volkswagen (VLKAF) and Siemens (SIEGY) are grappling with supply chain bottlenecks too, but it is Germany's roughly 200,000 small and medium-sized manufacturers who are less able to withstand the shock.

Quote:U.S. consumer spending rose more than expected in March amid strong demand for services, while monthly inflation surged by the most in 16-1/2 years, giving the Federal Reserve ammunition to hike interest rates by a hefty 50 basis points next week.

Quote:When Tesla's Shanghai plant and other auto factories were shut over the last two months by emergency measures to control China’s biggest COVID-19 outbreak, the burning question was how quickly they could restart to meet surging demand. But with the Shanghai lockdown grinding into its fourth week, and similar measures imposed in dozens of smaller cities, the world’s largest boom market for electric cars has gone bust. Other companies from luxury goods makers to fast-food restaurants have also offered a first read on the lost sales and shaken confidence of recent weeks, even as Beijing rolls out measures to help COVID-hit industries and stimulate demand.

Quote:For some context, El Salvador's Chivo wallet quickly lost popularity after its rollout in September 2021. NBER's survey found that just 20% of respondents in the nation used Chivo after downloading it. 40% of all downloads occurred in September of last year and "virtually no downloads have taken place in 2022." It seems that people were incentivized to download Chivo given the $30 bonus offered by the government, hence the saturated influx of downloads at the onset of the Chivo launch, the NBER explained. “The most important reason not to download the app, conditional on knowing about it, is that users prefer to use cash, which was followed by trust issues -- respondents did not trust the system or bitcoin itself,” the study said. Note that in 2001, the greenback became the official currency in El Salvador.

Quote:The heat wave will also have an economic cost—one that will ripple beyond the subcontinent. As I’ve written about before, the world is suffering through a shortage of crucial commodities, including keystone cereal crops such as wheat. When Russia invaded Ukraine, it scrambled an already strained global wheat market—Russia is the world’s largest wheat exporter; Ukraine, the world’s sixth largest—and sent prices soaring. India, which has enjoyed five straight years of record wheat crops, jumped in and offered to export more than usual.

The heat wave has, for now, thrown those plans into doubt. Some Indian farmers have estimated that 10 to 15 percent of their crop has died, according to Monika Tothova, an economist at the Food and Agriculture Organization, a United Nations agency. But it’s too early to know exactly how the heat wave will shape the crop.