Quote:For a possible answer, we need look no further than BofA Global Research’s note on Tuesday entitled, “Ad recession concerns becoming a reality.” The thesis: the base of advertisers paying Snapchat for pre-roll ads or integrated content is the same base of advertisers paying Google. Or Pinterest (PINS). Or the company formerly known as Facebook. “[W]e expect a sentiment overhang on the Internet group until 2Q earnings in July,” the note reads. Analysts at Jefferies echoed this view, arguing in a note Tuesday that they believe it's "highly unlikely" ad market weakness is isolated to Snap.

In February, Meta reported poor revenue guidance and blamed privacy changes to Apple’s iOS mobile system. Snapchat shares lost 20%. What happened after the bell? Snap reported its own earnings, said it had achieved a net profit for the first time, and shares about doubled the next day. How about the quarter before that? The company missed on revenue expectations, teased the impact of the iOS changes, and then the stock sold off by 25%.

Quote:There were hopes that supply chain issues would start to abate in the first half of 2022 as the effects of the pandemic became contained in more countries. But other events, such as the war in Ukraine, have added new bottlenecks. And with lockdowns in Shanghai and other key cities across China, pandemic-driven snags are hurting supply chains again.

Across a wide spectrum of industries, companies have been trying to get a handle on when supply chain logjams will improve, but it’s been a moving target virtually everywhere.  “No one really knows,” says Morningstar senior equity analyst Michael Field, who covers shipping and logistics. “Nearly every company has supply chain issues. The number of companies doing anything about it is far fewer.” MORE ON THIS TOPIC Is an Economic Recession Likely? (And How Much Does It Matter?) 

Field points to a few bright spots. Labor availability has improved in key areas, such as ports, to help move goods across the world. Companies have been signing long-term contracts with shippers to secure transportation, which was normally a buy-it-as-you-need-it market prior to the pandemic, Field says. Some of the industries most significantly hit by global supply chain shortages include semiconductors, automobiles, industrials, retail, and restaurants. Below, we’ll highlight how issues have progressed for each of those industries.

Quote:The five pillars of global financial stability are faltering dangerously, according to quant research shop Gavekal-IS.
Currently, "the conditions for a global equity crash are met," Gavekal said in a note. "No prophecy here, simply the observation of risk states."
The five pillars are world dollar liquidity, energy costs, international trade, inflation and fear.
Looking at them separately:

1. World liquidity in U.S. dollars contracting fast. The MSCI World index (URTH) returned -2% cash per annum in liquidity contraction times vs. cash +135% in expansion, they said..
   
2. U.S. energy costs spiking at uncharted levels. Gavekal's U.S. Primary Energy Index rose by 150% in the last 12 months, the highest inflation in 120 years.
   
3. Global trade is severely damaged. The Dow Transportation Index (DJT) (IYT) is a good proxy for international trade and is at its lowest leve in seven months. When "it reaches new highs, US and global equity markets follow," they said.
   
4. Inflation has diffused globally. Gavekal's Inflation Index tracks 40 countries with a range of 0% (no countries with inflation) to 100% (all countries). It now stands at 100% for the second time in 50 years, the last being September 2008.
   
5. Fear Index similar to 'dangerous' periods. Gavekal's Fear Diffusion Index, a measure of equity tail risks exhibited in 40 different markets, is now 70% on a scale of 0% to 100% (see chart at bottom). "The Fear Index is a warning that equity markets are ready to amplify bad news if they occur, not that bad news will occur."
   

In deperate times, strong leaders have been able to turn situations around, but international leaders are weakened by domestic concerns, Gavekal added.
"The chances of a strong and coordinated international leadership to set things straight do not look promising."
See why JPMorgan strategist Marko Kolanovic argues for a second-half stock rebound.

Quote:Slumping stocks and surging bond yields are rapidly crimping global financial conditions, yet given their effect on dampening economic growth and eventually inflation, the moves might be welcomed by the Federal Reserve and other central banks. Financial conditions is the umbrella phrase for how metrics such as exchange rates, equity swings and borrowing costs affect the availability of funding for households and businesses. Tighter conditions are widely seen as heralding a growth slowdown and vice-versa.



The widely used Goldman Sachs U.S. financial conditions index (FCI) shows a 100 basis points (bps) tightening this month alone. The last time the U.S. FCI contracted as sharply was during the February-March 2020 COVID-linked sell-off, Goldman data shows. US conditions Goldman's rule of thumb is that a persistent 100 bps FCI tightening slows GDP by about one percentage point after a year, in turn slowing inflation by roughly 0.1 percentage point.