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Sunday, 24 January 2021

What the markets are doing on 24 January 2021

It’s earnings week in the US of A with Apple, Microsoft and Tesla all set to make announcements alongside more than a fifth of the S&P 500, the Wall Street Journal notes. Boeing and McDonald’s will also announce results, “shedding more light on how businesses performed at the end of 2020 as Covid-19 cases rose.”

Optimism that a “massive” global economic recovery is in the cards for 2H2021 is spurring on a surge in stock markets, says the Financial Times. The optimism comes as vaccines are being proven effective against the new covid variant, while the Biden administration promises to push out a USD 1.9 tn stimulus package and rejoin the World Health Organization.

THE BIG WORRY: The spread between market performance and the real economy is still too wide. The stimulus plans “make a credible attempt at addressing short- and longer term economic issues” but ultimately are not enough to narrow the gap between the economic fundamentals and market performance, which already “sprinted ahead,” market sage Mohamed El Erian told Bloomberg (watch, runtime: 2:21). The gap is a result of what El Erian calls an “unhealthy codependency” between markets and central banks, wherein policy reacts to markets and markets react to policy. “Markets have been conditioned to expect ample and predictable support from central banks,” he said, pointing to European Central Bank President Christine Lagarde stressing the ECB’s commitment to “very accommodative” monetary policy.

El Erian isn’t the only one sounding the bubble alarm: One of the world’s top value investors is worried that central bank policies and government stimulus have made it impossible to tell the true health of the economy — and with it, impaired our ability to gauge risk in the market. A data point on the journey, courtesy of dotcom bubble fixture Henry Blodget (who went on to build and run Business Insider): The “percentage of public companies that are losing money is now at an all-time high, exceeding even the dotcom boom…” And self-described bubble expert investor Jeremy Grantham said Thursday that the US stock market “is in a bubble with ‘very seldom seen levels of investor euphoria.’




+0.5% (YTD: +7.5%)



Buy 15.67

Sell 15.77



Buy 15.67

Sell 15.77


Interest rates CBE

8.25% deposit

9.25% lending




– (YTD: +2.2%)




-1.1% (YTD: +11.2%)




-2.0% (YTD: +9.8%)


S&P 500


-0.3% (YTD: +2.3%)


FTSE 100


-0.3% (YTD: +3.6%)


Brent crude

USD 55.41



Natural gas (Nymex)

USD 2.45




USD 1,859




USD 32,415

-2.9% (as of midnight)

The EGX30 rose 0.5% on Thursday on turnover of EGP 1.7 bn (20.4% above the 90-day average). Foreign investors were net buyers. The index is up 7.5% YTD.

In the green: Dice (+8.0%), TMG Holding (+3.6%) and Madinet Nasr Housing (+2.8%).

In the red: Egyptian Iron & Steel (-7.7%), Ibnsina Pharma (-1.7%) and CIRA (-1.6%).

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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