Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
In our latest show we review some of our predictions from earlier in the year, look at why the Chatterers are buying apartments in specific locations, and parse the latest numbers. Also, an important message for anyone considering renovating a bathroom or kitchen in a high-rise!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The rate hikes from the RBA and BOC are important indicators for the FED decision next week. In short, rates are going higher for longer, suggesting a recession, and further pressure on banks. Are markets finally getting the message?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is a summary of the latest from our surveys, as we track rising financial stress across the country.
ASIC’s MoneySmart has some useful tool: https://moneysmart.gov.au/
The National Debt Help Line: https://ndh.org.au/
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
U.S. stocks closed higher on Friday after a labor market report showing moderating wage growth in May indicated the Federal Reserve may skip a rate hike in two weeks, while investors welcomed a Washington deal that avoided a catastrophic debt default with the Senate passing a bill late on Thursday to lift the government’s $31.4 trillion debt ceiling avoided what would have been a catastrophic, first-ever default.
As an old TV show “Soap” used to say – confused? You will be… and this is certainly appropriate for the current complex market dynamics. The market has been rallying since October last year, hoping the Fed would pause its rate-hiking campaign and start cutting rates in the latter half of this year.
“With this broadening rally, #markets are embracing another upside surprise on the #economy,” Mohamed El-Erian said in a tweet. “Underlying this is a lower risk of recession. Indeed, and as I’ve argued before, there is no need for the economy to fall into recession unless it is hit with another Fed policy error.”
But the bullish case hinges upon the economy avoiding a recession, Employment remaining strong, and wages supporting consumption, elevated corporate profit margins supporting higher market valuations and the Fed will “pause” the tightening campaign as inflation falls.
Yet if the economy avoids a recession and employment remains strong, the Fed has no reason to cut rates. Sure, the Fed may stop hiking rates, but if the economy is functioning normally and inflation is falling, there is no reason for rate cuts.
And sustained economic growth and low unemployment will keep inflation elevated, leaves the Fed little choice but to become more aggressive in tightening monetary accommodation further.
Two other factors to also consider are first the narrow base of the current rally, the mirror image of last year when big tech was on the nose, now investors holding shares of the massive tech and growth companies leading the charge are debating whether to cash out or stay on for the ride. And second the lag effect of past rate rises, which typically take 18-24 months to work though to the real economy, and the split performance of goods and services inflation and potential impact.
A record $US8.5 billion flowed into tech stocks in the latest week, data from BofA Global Research showed, as investors piled into a rally that has seen the tech-heavy Nasdaq 100 gain 33 per cent in 2023. The benchmark S&P 500 has risen 11.5 per cent this year and stands at a 10-month-high. Big movers include shares of Nvidia, which are up about 170 per cent this year, while Apple and Microsoft, the top two US companies by market value, have both climbed nearly 40 per cent.
The S&P 500 advanced for a third week in a row, powered to the brink of a bull market by a handful of tech behemoths such as Nvidia, Alphabet and Microsoft. The Nasdaq 100 jumped 1.8 per cent, capping a sixth straight weekly gain. The tech-heavy Nasdaq index surged to a 13-month intraday high and posted its sixth-straight week of gains that marked its best winning streak since January 2020. Underneath the surface, value shares lagged growth in a seventh week of underperformance.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is an edited version of my latest live show, in which Robbie Barwick from the Australian Citizens Party examine the latest in the Senate Inquiry into Regional Banking Closures, the ASIC Inquiry, banks and corporates behaving badly and some of the broader geo-political risks in play.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
We look at the latest monthly CPI figures which were stronger than anticipated, and Phil Lowes’ outing in front of the Senate (maybe his last?).
It is highly likely that further rate increases are on the cards, despite the record high debt burden, acknowledge by the Governor. And whilst there was a focus on productivity improvement, the truth is, the war on wages growth continues.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Higher mortgage rates are starting to catch up on a number of fixed rated holders. Indeed over the next few months, higher home prices and the rate cliff will collide! What may happen? http://www.martinnorth.com/ Go to the Walk The World Universe at https://walktheworld.com.au/
Edwin Almeida our property insider joins me for another discussion about the state of property – it might blow your socks off!!
https://www.ribbonproperty.com.au/
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The bare bones of an agreement was announced late Saturday night in the US, and assuming its passed on the hill , the debt ceiling crisis looks like it has been postponed until 2025. As the US markets are closed on Monday for Memorial Day, we can expect Asian markets to react first! It is also a Bank Holiday in the UK!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
US stocks rose broadly in their last trading day before a long weekend, despite painfully slow progress on debt ceiling negotiations and disappointing inflation data. Chip stocks surged for a second straight day on optimism about artificial intelligence.
Investors were closely watching debt ceiling talks as Biden and McCarthy still seemed at odds over several issues heading into the long weekend, with the U.S. stock market closed on Monday for the Memorial Day holiday. but strategists warned there was still a prospect of a sell-off if debt ceiling negotiations break down. Any agreement would have to pass the Republican-controlled House of Representatives and the Democratic-controlled Senate, with the June 1 deadline fast approaching.
The S&P 500 climbed 1.30% to end at 4,205.45 points. The Nasdaq gained 2.19% at 12,975.69 points, while Dow Jones Industrial Average rose 1.00% to 33,093.34 points. This means the Dow Jones Industrial Average ended a five-day losing streak, while the Nasdaq Composite Index and S&P 500 closed at their highest levels since August 2022, with the S&P 500 above 4,200 points. And for the week, the S&P 500 rose 0.3%, the Dow fell 1.0% and the Nasdaq jumped 2.5%.
But Data showed U.S. consumer spending increased more than expected in April and inflation picked up, which could prompt the Federal Reserve to raise interest rates again next month. A measure of inflation most closely watched by Federal Reserve officials picked up in April, reflecting the difficult path ahead for economic policymakers as they weigh whether to raise interest rates again to bring down stubborn price increases.
0:00 Start
0:15 Introduction
0:30 AI
1:24 Debt Ceiling Issues
3:00 US Markets
3:40 US Retail Sales
4:15 PCE Data Higher
5:00 Rate Hikes Coming?
7:20 Treasuries
7:40 Europe
8:20 UK Retail Sales
9:50 Asia
12:30 Oil
13:45 Gold
16:13 Australia
18:50 RBA To Lift Again
21:20 Crypto
22:05 Summary and Close
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
