The latest edition of our finance and property news digest with a distinctively Australian flavour.
Any incoming data requires interpretation to make sense. And the truth is, factors like recency bias, expectations, and hopium can all influence how news is interpreted, and decisions made. We saw this on Friday when US markets read the data as signs of a slowing economy, and immediately went to the FED easing rate rises, despite earlier news that they are keeping at the rate rising until inflation is crimped. Treasury yields fell sharply as investors continued to price in the step down in the pace of rate hikes at the Fed’s meeting next month.
But I think the central bank will need to see further slowing of price increases in the December inflation report, due out next week, before deciding whether to slow its next rate hike. It raised rates 50 basis points in December.And future earnings expectations are likely overdone for now, so perhaps markets were one sided in their interpretation of the data. In the minutes from the Fed’s December meeting [released] this week, it was unanimous among members of the FOMC group that they are going to keep interest rates high all year long. We will see.
CONTENTS
0:00 Start
0:15 Introduction
0:30 Data is not Neutral
1:30 US Jobs Report and Macro
3:40 US Markets
7:40 Oil Down
10:20 Gas Down
12:35 Europe
14:00 China and Asia
18:00 “N” Shaped Recovery
19:00 Australian Market
20:19 Gold too high?
21:40 Crypto Bearish
23:25 Summary and Close
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