Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
This is an edited version of a live discussion about the financial markets with Damien Klassen, Head of Investments at Nucleus Wealth and Walk The World Funds.
We discussed the recent rises in the markets, and whether they are sustainable, policy errors, China, property prices, crypto and investing strategy.
Go to the Walk The World Universe at https://walktheworld.com.au/
Join me for a live discussion about the financial markets with Damien Klassen, Head of Investments at Nucleus Wealth and Walk The World Funds.
You can ask a question live!
Go to the Walk The World Universe at https://walktheworld.com.au/
My latest chat with Journalist Tarric Brooker, as we answer questions relating to inflation, on the day after the latest data from the US was lower than expected. So, we examine why that is, and what the implications may be.
Sides available here: https://avidcom.substack.com/p/charts-that-matter-11th-november
Go to the Walk The World Universe at https://walktheworld.com.au/
In my coverage of Fintech, I caught up with the Founder and CEO of Tanggram.com. a wealth management start-up with an emphasis of Gamification.
Conceived in 2016, the venture has had multiple rounds of funding, and most recently went to a crowd sourcing equity funding, so we discussed this method of raising too.
Note: DFA has no commercial relationship with Tanggram
Go to the Walk The World Universe at https://walktheworld.com.au/
Adams and North caught up with Senator Bragg, who has launched the ASIC inquiry.
We discuss the purpose of the review, the process, and the nature of the submissions the review would like to see.
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/ASICinvestigation
Go to the Walk The World Universe at https://walktheworld.com.au/
The latest edition of our finance and property news digest with a distinctively Australian flavour.
Ricochet is defined as a glancing rebound (as of a projectile off a flat surface). And in the markets, we are seeing that in spades at the moment.
So, in this week’s market review we will as normal start in the US, cross to Europe and Asia and end in Australia. But I want to stress how volatile things are, in a situation where good news is bad news, expectations of a recession or slow down are growing, and Central Banks are still generally talking interest rates higher.
Plus, as I discussed yesterday, there is a growing divergence between the RBA’s approach compared with other Central Banks, to the point where we risk higher rates for longer in a slowingeconomy, which is exposed not only to exchange rate risks, but also a slowing China.
The Dow gained Friday as investors mulled a mixed jobs report and speculation about China easing Covid-19 lockdown measures, but that wasn’t enough to prevent the marketfrom snapping a three-week win streak following the Fed’s rate hike this week.In fact, global shares rose on Friday and the U.S. dollar fell, after jobs data came in stronger than expected but also hinted at some slack in the tight American labor market,triggering again that hope that the Federal Reserve might ease up on monetary tightening –despite what was said just a day earlier about higher rates.
Data from the U.S. Bureau of Labor Statistics showed the economy generated 261,000 jobs in October. That was higher than an estimate of 200,000expected but it also showed unemployment rising to 3.7% from 3.5% in September while wage inflation dropped to 4.7% from 5% in the prior month.Average hourly earnings increased 0.4% after rising 0.3% in September, but the rise in wages slowed to 4.7% year-on-year in October after advancing 5.0% in September.The participation rate eased back a little to 62.2%.The stronger jobs report comes just ahead of fresh inflation data next week, which if continues to show inflation running hot would lift the prospect of another 75 basis point hike next month.
In Australia. Afterpay-owner Block led the Australian sharemarket higher on Friday after reporting a stronger-than-expected third quarter profit, causing its share price to leap 10.9 per cent to $97.03.
The S&P/ASX 200 added 0.5 per cent, or 34.6 points, to 6892.5 on Friday, lifting its weekly gain to 1.6 per cent. The broader All Ordinaries index added 0.6 per cent to 7089.3 on Friday.
Go to the Walk The World Universe at https://walktheworld.com.au/
Following on the amazing news from last week that John Adams and In the Interests of the People, didn’t just get one inquiry into ASIC, but two – we have new news!
One inquiry will be held by the Senate Economics References Committee – this inquiry was established by a 43-20 vote of the Australian Senate.
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/ASICinvestigation
The other inquiry will be held to the Parliamentary Joint Committee on Corporations and Financial Services
Yesterday, 2 November 2022, the Senate Economics References Committee officially called for public submissions. The deadline submissions are 3 February 2023 – which is 3 months from now.
For all those people across Australia who have had significantly difficult experiences with ASIC, this is your opportunity to share your stories with the inquiry.
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/How_to_make_a_submission
Go to the Walk The World Universe at https://walktheworld.com.au/
On Friday there was a robust, broad-based rally across Wall Street as markets looked over more encouraging economic data and a sunnier earnings outlook. This despite the upcoming Federal Reserve policy meeting next week. The FOMC decision is widely expecting a unanimous vote for at least one last major rate increase, though with the Fed’s preferred price measure still showing inflation is running hot, that might make it harder for them to set up a possible downshift in its rate-hike pace for the December meeting.
That said, despite data on Thursday showed a strong rebound in U.S. gross domestic product (GDP) in the third quarter, demonstrating resilience in the world’s largest economy and oil consumer and an acceleration with inflation, strong consumer spending data, and a robust labor market, much of Wall Street is growing confident that the Fed will pause tightening once they take the funds rate to 4.50-4.75% next quarter to the point where Financial markets have now priced in an 84.5% likelihood of a fifth consecutive 75 basis point interest rate hike at the conclusion of the Fed’s Nov. 1-2 policy meeting, and a 51.4% chance the central bank will decelerate to 50 basis points in December.
In addition to the FOMC decision, traders will also closely monitor the nonfarm payroll report. The strong labor market is still expected to show job growth with 200,000 jobs created in October, down from the 263,000 created in the prior month. The unemployment rate is expected to tick higher and wage gains are expected to slow.
So all major U.S. indexes ended the session up about 2.5% or more, with the S&P and the NASDAQ notching their second straight weekly gains. The blue-chip Dow posted its fourth consecutive Friday-to-Friday advance and its biggest weekly percentage gain since May. As a result, the bulls were back, even if largely driven by hopium (remembering the bulk of economists are still seeing a US recession likely next year!)
“This has been one of the best months (so far) in the history of the Dow, suggesting the bear market likely ended,” said Ryan Detrick, chief market strategist at Carson Group. “Big monthly moves historically happen at the end of bear markets.” “This is the second Friday in a row we’ve seen aggressive buying suggesting investors are growing more comfortable holding over the weekend,” Detrick added.
Go to the Walk The World Universe at https://walktheworld.com.au/
The news continues to confuse, as Wall Street contended with another volatile session. Investors mulled the Federal Reserve’s path of interest-rate hikes while assessing mixed economic data and a slew of earnings reports, whilst the ECB doubled official deposit rate, and Credit Suisse revealed their plans to revamp their business.
At the end of the day, the Dow closed higher on Thursday, as a rally in Caterpillar and Boeing cushioned the rout in tech after META delivered disappointing quarterly results. The Dow Jones Industrial Average gained 0.61%, the NASDAQ was down 1.6% and the S&P 500 fell 0.55%. The S&P 500 closed lower, after swinging between gains and losses for most of the session.
The big news was Meta Platforms which fell nearly 25% after reporting third-quarter results that missed on the bottom line and were an “absolute train wreck,” according to Wedbush.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
My latest Friday afternoon chat with Journalist Tarric Brooker. We look at the latest charts, and discuss where things are going.
You can see the charts here: https://avidcom.substack.com/p/charts-that-matter-28th-october-2022
Tarric’s upcoming event is here: https://cloud.go.pepperstone.com/pepp-talks-melb-nov-2022
Go to the Walk The World Universe at https://walktheworld.com.au/