Wealth Management – Page 8 – Digital Finance Analytics (DFA) Blog

This Crypto Winter May Not Turn To Spring!

Well, those following my channel over recent years will know that I have been quite skeptical of Crypto wave, and while Crypto has gone through several major drops in its history, this time could be different. I was not impressed with so called celebrities starting spruiking them, including Kim Kardashian, but when financial mainstream started getting involved, my concerned grew. In the US, Fidelity’s plans to offer Bitcoin in 401(k)s – their equivalent of superannuation – could impact an entire generation.

Its worth recalling the sector spiked to around $3 trillion in total assets last November, before plunging to less than $1 trillion, with Bitcoin and a range of altcoins plunging from record highs.

What started this year in crypto markets as a “risk-off” bout of selling fueled by a Federal Reserve suddenly determined to rein in excesses has exposed a web of interconnectedness that looks a little like the tangle of derivatives that brought down the global financial system in 2008. The collapse of the Terra ecosystem — a much-hyped experiment in decentralized finance — began with its algorithmic stablecoin losing its peg to the US dollar, and ended with a bank run that made $40 billion of tokens virtually worthless. Crypto collateral that seemed valuable enough to support loans one day became deeply discounted or illiquid, putting the fates of a previously invincible hedge fund and several high-profile lenders in doubt.

The recent crypto plunge, with Bitcoin down about 70% from its peak, is fueling widespread financial troubles for companies involved in the space. Lenders like Celsius Network, Babel Finance and Vauld have suspended withdrawals, while firms such as Coinbase Global Inc. are cutting jobs. This is what is now being called a crypto winter – but will spring ever come?

Go to the Walk The World Universe at https://walktheworld.com.au/

No Escape! Recession Will Destroy Wealth. Period.

In today’s show, we review the weeks market action, starting in the US – by far the most influential market, followed by Europe, Asia and Australia. There is no place to hide. Wealth is being destroyed. And there is no end in sight. Data is flagging recession, as central banks continue to raise rates and given the astronomical debt burden out there this is a big deal.

Even conservative investment strategies are being hit. “This is a train wreck,” says Alex Dunnin, executive director of research house Rainmaker Group. “When a traditionally conservative strategy is getting the worst returns then all bets are off. It doesn’t matter where you go, almost everyone will be in pain.”

The S&P 500 notched its worst start since 1970, plunging 20.6% between January and June. The Dow had its largest first-half drop since 1962, and the Nasdaq Composite had its largest percentage decline ever. And US Stocks slipped over the five days, with the S&P 500 erasing part of its rally in the previous week. Down more than 2%, the index just endured its 11th drop in 13 weeks.

All three indexes posted losses for the week. Despite this Wall Street rallied to close higher on Friday in light trading, with investors heading into the long holiday weekend and embarking on the second half of year looking for the next market-moving catalyst. All major groups in the S&P 500 rose, while the tech-heavy Nasdaq 100 underperformed. Treasuries surged after an ugly first half as weak economic data added to recession fears.

The US economic data was frankly horrid this week. An influx of data showing softer consumer spending, sagging sentiment and subdued manufacturing suggest a US economy with a more fragile foundation, prompting several forecasters to lower their estimates for growth.

Strategists at Goldman Sachs told clients on Thursday that stocks could keep falling later this year since “equities are pricing only a mild recession” and more companies will likely begin reducing their earnings expectations. In the event of a recession, Goldman’s team sees the S&P 500 dropping to 3,600, or 4.9% below Thursday’s close.

[CONTENT]

0:00 Start
0:15 Introduction
2:23 US Weak Economic Data
8:22 GDP Forecast: Down
9:00 Bond Yields
11:00 Buying The Dip
13:50 US Markets
16:00 Oil, Gold and Silver
17:00 Euro-zone Inflation Up
19:18 European Markets
20:00 Asian Markets And China Bonds
22:25 Australian Markets
24:40 Crypto Down
25:47 Tough Times Ahead

Go to the Walk The World Universe at https://walktheworld.com.au/

FINAL REMINDER: DFA Live Q&A Damien Klassen 8pm Syndey – Investing Now

Join us for a live discussion about the current state of the markets with Damien Klassen Head of Investments At Nucleus Wealth And Walk The World Funds.

You can ask a question live via YouTube Chat!

Go to the Walk The World Universe at https://walktheworld.com.au/

The Bears Have It!

As expected, U.S. equities tumbled on Monday, with the S&P 500 confirming it is in a bear market, thanks to expected aggressive interest rate hikes by the Federal Reserve that would push the economy into a recession. Markets have been under pressure this year as climbing prices, including a jump in oil prices due in part to the war in Ukraine, have put the Fed on track to take strong actions to tighten its monetary policy, such as interest rate hikes. The Fed is scheduled to make its next policy announcement on Wednesday and investors will be highly focused on any clues for how aggressive the central bank intends to be in raising rates.

The latest pickups in consumer prices and inflation expectations will probably spur Federal Reserve officials to consider the biggest interest rate increase since 1994 when they meet this week, after chairman Jerome Powell previously signalled a smaller move was the likely outcome.

In fact The benchmark S&P index has fallen for four straight days, with the index now down more than 20% from its most recent record closing high to confirm a bear market began on Jan. 3, if you use the standard definition.

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

Warnings That Shook The Markets!

The S&P 500 and the Nasdaq finished in the red on Tuesday as worries that aggressive moves to curb decades-high inflation might tip the U.S. economy into recession dampened investors’ risk appetite.

All three major U.S. stock indexes pared their losses in afternoon trading, with the blue-chip Dow turning positive. Even so, the S&P 500 ended just 2.2 percentage points above confirming it has been in a bear market since reaching its all-time high on Jan. 3.

The Dow Jones Industrial Average rose 0.15%, to 31,928.62; the S&P 500 lost 0.81%, to 3,941.48; and the Nasdaq Composite dropped 2.35%, to 11,264.45. The volatility index rose 3.41% to 29.45.

Six of the 11 major sectors of the S&P 500 ended the session in negative territory, with communication services and consumer discretionary suffering the biggest percentage losses.

“As we step back and acknowledge the primary market catalysts, it’s really been about the Fed pivot and the change in interest rates, which have influenced prices across the capital markets,” said Bill Northey, senior investment director at U.S. Bank Wealth Management in Helena, Montana.
“In the last two weeks, we’ve seen some degree of macroeconomic deterioration starting to be manifested in corporate earnings and economic releases.”

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

The Bears Are In Charge…

The latest from the markets show the bears are running the show. It is not pretty.

The latest edition of our finance and property news digest with a distinctively Australian flavour.

Go to the Walk The World Universe at https://walktheworld.com.au/

The Whipsaw Market Weekly Update

The latest edition of our finance and property news digest with a distinctively Australian flavour.

In our weekly review, we reflect on a chaotic week in the markets, from stocks, to crypto, even as stocks rallied at the end of the week in financial markets thanks to Federal Reserve Chair Jerome Powell’s reassurance that bigger rate hikes would be off the table for now even after the hot inflation readings of the past few days. Separate comments from San Francisco Federal Reserve president Mary Daly also backed half-percentage point rate increases at each of the central bank’s next two meetings. There is a clue to why we are seeing so much craziness.

After sinking almost 20% from a record and flirting with a bear market, the S&P 500 saw a broad-based rally on Friday. It still posted a sixth straight week of declines — the longest losing streak since June 2011. The NASDAQ 100 outperformed amid a rally in giants like Apple Inc., Microsoft Corp. and Amazon.com Inc.

Meanwhile, Elon Musk caused chaos over his takeover offer for Twitter Inc., first claiming his bid was “temporarily on hold” and then maintaining he’s “still committed” to the deal — sending the social-media giant into a tailspin. Tesla Inc. jumped. Treasuries fell with the dollar.

Despite the strong gains on Friday, many traders aren’t yet convinced that equities have reached a bottom after a selloff that shaved $10 trillion from US stock values in 18 weeks. Instead, they say investors should still brace for volatility as the Fed’s ability to fight price pressures without causing a hard landing may depend on factors outside the central bank’s control. Frankly forecasting is a mess.

Back in January, stock strategists known for their enduring optimism expected the S&P 500 to add 5% in 2022.Bond strategists weren’t any more prescient. Interest rate strategists and economists were calling for 10-year Treasury rates to rise to 2% by June. Yields took out that level in early February and have touched 3.2% this month.

Go to the Walk The World Universe at https://walktheworld.com.au/

Pick Your Landing: Hard or Soft?

In today’s weekly review we look at the markets and muse on whether the inflation and rate adjustments driven by changes in Central Bank policy will precipitate a soft or hard landing. Some say the U.S. Federal Reserve’s effort to tame inflation with aggressive interest-rate hikes mean that a recession is inevitable, leading to a plunge in stock prices this year. Others, like Jeremy Zirin, senior portfolio manager and head of private client U.S. equities at UBS Asset Management says a soft landing is still possible. Possible yes, but is it plausible we ask?

What we do know is that the S&P 500 Index fell for a fifth consecutive week, which its longest losing streak in more than a decade, after April’s US jobs data bolstered the case for the Federal Reserve to continue to lift interest rates.

And the Dow posted its sixth-weekly loss Friday, as a better-than-expected monthly jobs report kept fears about an inflation-led slowdown in the economy front and center at a time when expectations of more aggressive Federal Reserve policy tightening continue to heat up.

Go to the Walk The World Universe at https://walktheworld.com.au/